The name of the game: getting a bill that could make or break some rural hospitals and could free up millions for education and transportation out of the Senate and into the House.
It’s the play Senate Democrats are making this week, as the hospital provider fee bill comes up for its first and possibly most crucial review by the Senate Finance Committee on Tuesday.
The provider fee is all that stands between about a dozen rural hospitals and severe cutbacks in services— or even closure.
The fee works like this: hospitals pay in based on the number of overnight patient stays and outpatients services. That money is pooled among all hospitals in the state, matched with federal dollars and then redistributed back to the hospitals to pay for health care (mostly Medicaid) for low-income Coloradans.
For the past several years, Democrats have wanted to change the program, reclassifying it into an enterprise, also known as a government-owned business, because the fee has a specific purpose. The state has already done that for college tuition and parks and wildlife fees.
If that reclassification were to happen, about $350 million per year would be freed up and Democrats have proposed using it for health care, transportation and K-12 education.
That solution has been a nonstarter with Republicans, especially in the Republican-led state Senate, which has killed those proposals for the past two years.
Then came 2017, and a bipartisan bill sponsored by Senate President Pro tem Jerry Sonnenberg of Sterling, and Democratic Senate Minority Leader Lucia Guzman of Denver. Their proposal deals with far more than just the provider fee; it also includes about $1.35 billion for rural transportation projects, about $400 million over three years for rural schools, an across-the-board 2 percent cut in state agency budgets (Guzman says it’s voluntary, not mandatory) and a reduction in the state’s revenue limits. In other words, a little bit of something for everyone.
That last part, reducing how much money the state can bring in, has been the toughest for Democrats to swallow.
The state has a limit, which is increased by population and cost of living every year, on how much it can collect, under the 1992 Taxpayer’s Bill of Rights, or TABOR, amendment. Right now, the provider fee pulls in just under $700 million per year, and that pushes the state over its revenue limits by about $287 million. That excess money turns into taxpayer refunds. Democrats and Gov. John Hickenlooper would like to take the provider fee out the stream of money that counts toward TABOR limits. Republicans have balked, seeing it as an end run around voter wishes to tamp down on state spending. But, some have indicated they would consider the reclassification if the state’s revenue limit were, in turn, lowered by nearly the same amount as would be reclassified — or about $670 million per year.
That brings us to tomorrow’s critical hearing in Senate Finance.
The committee is made up of three Republicans and two Democrats. The two Democrats, Sens. Lois Court of Denver and Andy Kerr of Lakewood, are both expected to be “yes” votes. “It’s most important to keep the conversation going,” said Court. She doesn’t favor the revenue cap reduction but is open to the discussion.
Kerr said today the bill “has challenges to it,” but that he backs reclassifying the provider fee.
That leaves the committee’s three Republicans. Committee Chair Sen. Tim Neville, who voted against a 2016 version of the bill, is expected to vote against it again.
The bill’s fate then lies with the committee’s other two Republicans, Sens. Owen Hill of Colorado Springs and Jack Tate of Centennial. Neither will say how they will vote, but Hill is putting out interesting signals.
Hill was at first expected to be a “no” vote as well. But, two weeks ago, he became the lone Republican to vote against the 2017-18 budget bill, along with a handful of Democrats. His explanation then raises questions about where he stands now.
“A toxic combination of partisan politics and lackadaisical judgments took millions away from rural hospitals,” he says. “…Those of us who claim to speak for rural Coloradans ought to be a little embarrassed when we go home this weekend.”
Hill’s claim that he speaks for rural Coloradans has taken a few Capitol observers by surprise. Hill’s Senate district starts at the north end of Colorado Springs, just east of I-25, and runs south through the city for about 11 miles. A rural district, it is not. And it doesn’t have a single hospital within its borders considered rural by the Colorado Hospital Association.
Nor does Hill have a reputation for sponsoring legislation that specifically targets rural Colorado. His interests (and legislation) have focused more on helping charter schools, not exactly a growth market for rural school districts.
But two days after making that statement, Hill announced he was running for Congress, to challenge incumbent Republican U.S. Rep. Doug Lamborn. And that congressional district does have a rural component, west and south of Colorado Springs. Included in that district are three rural hospitals, in Woodland Park, Salida and Cañon City.
Hill told The Colorado Independent last month that the hospital funding problem is a creation of the federal government and Obamacare, and that he hadn’t yet seen a solution he could support. But he also acknowledged that without a solution from Washington, it would be up to Colorado lawmakers to deal with the problem of hospital funding, and in pretty short order, with just a month left in the 2017 session.
Tate told The Independent today he’s still undecided about the bill. But he did say he has a problem with the portion of the bill that raises money for rural transportation projects. He objects to the mechanism, which is to require the state to sell off some of its buildings and lease them back, and use the sale proceeds to pay for roads and bridges in rural communities. Tate said he would prefer to see the state bond against its federal cash, likely through the gas tax, to pay for those projects.
Among the other moving parts:
On Monday, House leaders announced they would delay working on a separate hospital provider fee bill tied to the 2017-18 budget until after the Senate Finance Committee acts on the main provider fee bill.
That separate measure tells hospitals to reduce the amount of money they send in for the provider fee program by $264 million. That’s what’s putting hospitals into risk, since that money is matched by federal dollars and translates into a $528 million cut.
At almost the same time, Senate Republicans announced that the Senate Transportation Committee on Tuesday will be taking its first look at a bill that would raise the state’s sales tax by 6 cents on a $10 dollar purchase in order to fund $3.5 billion in transportation projects. That hearing is scheduled to start at the same time as the provider fee bill hearing.
Some of the same groups and people are backing both the provider fee and transportation tax bills. The conflicting hearings are expected to force at least some of them to choose which bill hearing is more important to attend— and which bill is more important for their testimony.
photo by Jasleen Kaur via Flickr:Creative Commons
