Effort to save rural hospitals and fund roads and schools poised for success

Author: Peter Marcus - May 9, 2017 - Updated: May 9, 2017

Pegged as one of the most important bills of the legislative session, a last-ditch effort to fund transportation, schools and hospitals appears poised to cross the finish line.

After hours of debate on Monday, which continued into early Tuesday morning, the House backed an effort to create a 20-year bond program to direct $1.8 billion towards critical infrastructure.

A host of amendments were offered during the hours-long debate, as attempts were made to find existing funding. Democrats, who control the House, shot down those amendments, suggesting that the $26.8 billion proposed budget is already stretched.

“We made a very tight state budget more responsive to the needs of our state and its people without taking any Coloradans for granted or leaving any Coloradans behind,” House Speaker Crisanta Duran, D-Denver, said in a statement. “This is not the long-term solution to our structural budget problems, but it buys us some time.”

Senate Bill 267 still faces a final vote in the legislature on Wednesday – the last day of the legislative session – before it can go to Gov. John Hickenlooper, a Democrat, for his signature.

The bill would reverse a budget move this year that reduced the Hospital Provider Fee by $264 million in an effort to balance the budget. The fee is assessed on hospitals to force a match of larger federal health care dollars. With the federal match, hospitals in Colorado stand to lose about $528 million. Some rural hospitals said they would close.

It would reclassify the fee on hospital-bed occupancy as an enterprise fund to get out from under the state spending cap, while also lowering the spending cap base by $200 million to protect taxpayer rebates.

Senate Bill 267 would require that at least 25 percent of the money from bonding go toward projects in rural Colorado, with county populations of 50,000 or less.

The legislation is the result of the legislature’s failure to advance more significant transportation funding. One measure would have raised the state sales tax in an effort to address a $9 billion shortfall in transportation funding. Another measure would have used existing taxes and a $3.5 billion bond program to pay for roads and highways.

With lawmakers ready to cross the finish line on Senate Bill 267, legislative leaders can point to an example of compromise that took a leap of faith for both Republicans and Democrats.

In a sign of the bill’s urgency, the measure passed the Senate Monday morning and two House committees Monday afternoon before receiving initial approval from the House on Tuesday.

Republicans have been skeptical of restructuring the Hospital Provider Fee for years, arguing that the issue should have gone to voters. But by lowering the state spending cap to protect taxpayer rebates and by addressing Medicaid reform by increasing co-pays for Medicaid patients, enough GOP lawmakers were able to come around.

The measure also would address schools, with $30 million allocated to rural districts over three years. Lawmakers have proposed paying for the school funding by raising marijuana taxes from 13 percent to 15 percent.

It also would aim at avoiding a cut to the Senior Homestead Exemption, while also including a credit for businesses paying taxes on business equipment. Marijuana money would also help with that.

“This bill is entitled ‘Sustainability of Rural Colorado,’ and we certainly focused on rural hospitals and rural schools,” Majority Leader KC Becker, D-Boulder, told the House. “But Coloradans across this state will benefit.”

Peter Marcus

Peter Marcus

Peter Marcus is senior statehouse reporter for Colorado Politics. He covers the legislature and previously covered politics, the governor’s office, the legislature and Congress for The Durango Herald. He joined The Herald in 2014 from The Colorado Statesman, a Denver-based political weekly. The Washington Post twice named Marcus one of the nation’s top state-based political and legislative reporters.