DENVER – Financial relief for Colorado’s hospitals and promotion of rural areas is one step closer to becoming a reality after the Senate gave preliminary approval to a Christmas tree bill that tries to do a bit of everything.
Senate Bill 267, which would leverage state buildings for a $2 billion bond for transportation and construction funding, provide tax credits for small businesses, raise Medicaid copays, and prevent hospitals from losing $264 million in federal matching money, was adopted Friday by the Senate on second reading after limited debate.
The bill was moved up after it was approved on a 5-2 vote by the Senate Appropriations Committee earlier in the day.
What debate did occur on SB 267 was centered around the constitutionality of the measure, which reclassifies the Hospital Provider Fee as an enterprise and makes the funds it generates not count towards the revenue limit allowed under the Taxpayer’s Bill of Rights (TABOR).
The fee is collected from hospitals to unlock a federal match before it is redistributed to healthcare providers using a formula that favors rural hospitals.
The fee is designed to subsidize treatment of individuals on Medicaid or without insurance coverage but under the current classification has the unfortunate distinction of being a program that is most likely to be reduced to balance the state’s budget, as it was this year.
Constitutionality questions hinge not on whether or not the fee can be reclassified, but on how much the TABOR limit must be lowered.
Sen. Kevin Lundberg, R-Berthoud, was the most vocal critic of SB 267 Friday, and he believes the revenue cap must be lowered by the full amount of the fee or it opens up an opportunity for the government to take more taxpayer dollars then they are entitled too.
“When you take any program and take it from the general fund to an enterprise status, you also adjust the spending base for the general fund,” Lundberg said.
The bill lowers the TABOR cap by $200 million, which is well short of the more than $800 million dollars the fee generates.
The previous two attorneys general of Colorado have said the enterprise action would meet constitutional muster.
Sen. Jerry Sonnenberg, R-Sterling, said if the bill is unconstitutional it will receive a legal inquiry and be cast out, which he does not oppose.
“I’m good with that because if it is violating the constitution, I’ll be the first one to tell you that I don’t want it to pass,” Sonnenberg said.
Leveraging state buildings for transportation money also was questioned.
Sen. Tim Neville, R-Littleton, said it was “like hanging a for sale sign out on almost everything we own in the state of Colorado.”
Despite the misgivings, SB 267 moved ahead. It will receive a third reading and final vote Monday before being sent to the House.