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A Bold (Or Brash?) Eleventh Hour Effort to Address TABOR

Tense discussions on the budget have marked the 2015 legislative session from Day One, when Senate President Bill Cadman (R) chose to focus his chamber’s first introduced bill on TABOR refunds. The ideas and arguments about how to fix the refund situation Colorado finds itself in – indeed, if the situation even needs “fixing” – have only increased in frequency and intensity since January.

House Speaker Dickey Lee Hullinghorst (D) fired a loud shot this week. Following a surprise letter from Governor John Hickenlooper (D) imploring legislators to act, she introduced a bill with big implications in the waning days of the session.

House Bill 1389, introduced on Wednesday evening (April 29), seeks to move the Hospital Provider Fee from the General Fund revenue category – which is subject to TABOR limits – by reclassifying it as a separate “enterprise fund,” which does not count toward the limits. Other enterprise funds include the Colorado Lottery and a number of parks and recreation services. HB 1389 would create a new entity called the Health Care Affordability Enterprise by July 1, 2016. Bill sponsors and advocates say it would be identical to the existing Hospital Provider Fee Program.

If successful, the change would exempt more than $600 million per year from the state’s revenue total, preventing TABOR rebates to taxpayers from being triggered. Some analyses show that the state would likely avoid rebates for decades with no additional changes. The funds that would have been returned to taxpayers, say bill proponents, could be used instead for important areas such as transportation, education and health care. A more detailed explanation of the issue from CHI can be found here.

Few observers expected to see legislation to enact the change introduced this term. The final day for bill decisions is next Wednesday, May 6 – which means HB 1389 has a great deal of ground to cover if it hopes to make it to the governor’s desk in time. And standing between it and the finish line is Republican opposition, which so far seems absolute.

The bill is sponsored by three Democrats: Reps. Hullinghorst and Lois Court (D) and Sen. Pat Steadman (D). No Republican has signed on as a backer, and in two House committee meetings, no Republican has voted in favor of it.

HB 1389 cleared both the Health, Insurance and Environment Committee and Appropriations Committee by a single vote (7-6). It now goes to the House floor, where it remains to be seen if it can gain a trace of bipartisan support. If not, the bill’s chances in the Republican-controlled Senate look doubtful.

Still, in the bill’s first hearing on April 30, some Republican committee members seemed torn.

Reps. Lois Landgraf (R) and J. Paul Brown (R) both hinted that the decision was difficult, with Landgraf saying that she “unfortunately” agreed with the dark picture Hullinghorst painted of an impending budget crisis.

Multiple legislators said they couldn’t support the bill because it had been introduced too late and was being rushed through too quickly, with few opportunities for discussion. Hullinghorst responded strongly, saying that she did not apologize for the late introduction. She said the Hospital Provider Fee had been a topic of discussion all session and that her fellow lawmakers had possessed ample opportunity to study the issue and ask any questions. She framed the bill as a common sense move to correct an “accounting error.”

Only one person arrived to testify in opposition to the bill in the Health Committee, saying he had learned about it that morning in The Denver Post. Supporters representing K-12 education, higher education, hospitals and more were present to support the bill. The hearing in House Appropriations went much more quickly because the bill was one of 15 requiring action.

CHI will track HB 1389’s progress closely and provide updates on its fate in the House and, if applicable, the Senate. If the bill is not successful, expect a similar proposal to resurface next year.