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Colorado legislators divided in hospital provider fee debate

February 17, 2016 Updated: February 17, 2016 at 9:14 pm
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photo - DENVER, CO - JANUARY 07: Senate President, Bill Cadman, R-Colorado Springs, speaks on opening day of the 2015 Colorado Legislative session at the State Capitol Wednesday morning, January 07, 2015. (Photo by Andy Cross/The Denver Post)
DENVER, CO - JANUARY 07: Senate President, Bill Cadman, R-Colorado Springs, speaks on opening day of the 2015 Colorado Legislative session at the State Capitol Wednesday morning, January 07, 2015. (Photo by Andy Cross/The Denver Post) 

DENVER - Colorado Senate President Bill Cadman is still opposed to the Democrat's proposed "fix" to the state's budget woes, but two Republicans are backing the governor's proposal, one the former attorney general and the other a member of the Senate where Republicans hold a single-vote majority.

"It seems to me this is by far the easiest, least painful solution for the taxpayers," Colorado Springs Mayor John Suthers said in an interview with The Gazette Tuesday.

Suthers was the attorney general (Colorado's top lawyer) in 2009 when Democrats were considering expanding the federal healthcare program Medicaid so more women, children, disabled individuals and single adults could qualify for the government assistance.

"A lot of the animosity surrounding this goes back to the fact that they are saying look if we didn't participate in the Medicaid expansion we wouldn't need all this money, and the provider fee was basically a means to pay for the expansion," Suthers said. "I understand all of that, but having the provider fee in the TABOR calculation is going to create immense problems going forward. It's just going to get bigger and bigger and bigger and if you don't take it out I don't know what's going to happen."

Gov. John Hickenlooper and Democrats in both the House and Senate have called for the hospital provider fee to be re-labeled as an enterprise fund. That would remove the millions of dollars coming into the state as a fee charged on every overnight stay at a hospital from the general fund.

The general fund revenue is subject to a cap put in place by voters who supported the Taxpayer's Bill of Rights. Under TABOR money above that cap must be refunded to voters. About $200 million would have to be refunded during the 2016-17 fiscal year, but Democrats propose moving the provider fee to retain that money.

Cadman had been working with Democrats on the issue before session began, but he shut down the possibility of supporting the issue after receiving a legal opinion from the state's non-partisan Office of Legislative Legal Services that said it would be impossible to turn the hospital provider fee into an enterprise fund under existing definitions of those funds. The legal opinion went on to say that a law doing so would have a hard time withstanding a legal challenge.

"It would put the state on the hook for the entire amount that was spent under it and an additional 10 percent penalty," Cadman said Wednesday. "That's a pretty big gamble with the people's money. Obviously some are willing to take that risk."

Attorneys from the Denver law firms Holland &Hart, and Lewis Roca Rothgerber Christie, put out a memo last week outlining a legal argument for making the hospital provider fee an enterprise fund like the University of Colorado.

"If I had to weigh two opinions in the position I serve I would be more inclined to hold out one that I believe is objective over one that I believe is subjective," Cadman said, noting it's unclear who paid for the legal memo. "A legal opinion provided by the staff in this building I believe is objective. I don't get the same impression from something hired by people who have a direct interest in changing the outcome."

But state Sen. Larry Crowder, R-Alamosa, is mulling the legal opinion and what Suthers has to say.

"He is one of the great legal minds in the state," Crowder said.

The Republican from rural southern Colorado has the distinction of being the only Republican in the state to vote for the Medicaid expansion in 2014. Now he could be the only Republican under the Gold Dome who supports moving the hospital provider fee.

He said that if there is a way to do it constitutionally, he would have to support it.

"We need to let this thing percolate a little bit," he said.

Crowder said that seven of the nine hospitals in his district are "critical care" facilities that rely on federal dollars to operate. He said the hospital provider fee fix would help his district.

"I'm up for re-election this year," he said. "But that's not why I'm here. It's bigger than me."

Crowder's potential support of the bill could in theory give Democrats the votes they need to get a hospital provider fee bill through the Republican dominated Senate.

But without Cadman's support the bill will never make it through committee for a full vote of the Senate.

Sen. Kent Lambert, R-Colorado Springs, said that increasingly it looks like there is not going to be a budget crisis in the 2016-17 fiscal year.

Lambert said there will be a clearer picture after the March economic forecast is released, but that the Joint Budget Committee hasn't seen necessary cuts despite tax returns mandated under TABOR.

"Things are not looking dire at all," Lambert said.

He said that even without a fix, it looks like lawmakers will be able to avoid cuts to higher education and keep pace with Constitutionally required spending on K-12 education.

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Contact Megan Schrader

719-286-0644

Twitter: @CapitolSchrader

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