DENVER – Gov. John Hickenlooper on Tuesday defended his proposal to restructure a hospital fee to balance the state budget.
Hickenlooper’s comments came after Republicans raised concerns with the governor’s plan ahead of the legislative session, which begins Wednesday.
The governor’s proposal – his leading agenda item for the upcoming session – would restructure the fee paid to hospitals to exempt it from the Taxpayer’s Bill of Rights.
The fee counts as revenue subject to taxpayer refunds. It was established to force larger contributions by the federal government to compensate health care costs.
“I don’t think anyone anticipated how rapidly the state’s economy would bounce back,” Hickenlooper, a Democrat, told reporters on Tuesday.
The governor’s proposal calls for turning the hospital provider fund into an enterprise fund, or government-owned business. The move would take the revenue out of the TABOR calculation and lower refunds set aside in the general fund, thereby freeing up the general fund for spending.
Hickenlooper’s budget writers have proposed $373 million in balancing measures.
Republicans last week pointed to a legal memo from nonpartisan legislative counsel, which stated that the fee restructuring would violate the state constitution.
Much of the opinion revolves around whether the state could successfully restructure the fund as an enterprise. The nonbinding memo states that lawmakers must ask voters for permission or enact legislation allowing the Legislature to create a new TABOR-exempt enterprise.
Republicans, who control the Senate, have led attacks against the governor and other Democrats who support the proposal. The GOP has suggested that Democrats ignored legal guidances when the same issue came up during the legislative session last year.
“To disregard this red flag is reckless in the extreme,” said Senate President Bill Cadman of Colorado Springs.
But the governor believes the legal opinion missed key facts. His office is seeking an official written opinion from Republican Attorney General Cynthia Coffman, whose office previously gave verbal approval, according to Hickenlooper.
“Our hope is that when we go back to the legislative legal affairs office and say, ‘here’s some other facts you didn’t know,’ they might reconsider,” the governor said, adding that he is confident that the fund fits the enterprise definition.
Republicans counter that the governor should instead be focused on cutting spending, pointing to rising Medicaid costs. But Hickenlooper pointed out that Medicaid expansions have covered many children.
“It’s hard for me to justify taking hospital care away from kids. It’s not their fault that they’re in a family that doesn’t have the resources,” Hickenlooper said.
Drawing upon his background as a geologist, Hickenlooper underscored that the hospital-provider fee proposal is only one “hypothesis,” or possible solution.
“We’re going to have to be looking at the budget and say, ‘well, we might have the hospital-provider fee, and we might not ...” the governor added. “It’s the second hypothesis that we might have it, and we have to be discussing what our priorities are if that is in fact the case.”
pmarcus@durangoherald.com