Colorado's hospital provider fee can't become an enterprise fund, says legal memo - Denver Business Journal

Colorado's hospital provider fee can't become an enterprise fund, says legal memo 

State hospital provider fee can't become an enterprise fund, says legal memo

Jan 6, 2016, 5:58pm MST Updated Jan 6, 2016, 10:14pm MST

Ed Sealover Reporter Denver Business Journal

Colorado’s Office of Legislative Legal Services has told state Senate President Bill Cadman that the Legislature cannot convert the hospital provider fee into an enterprise fund as a way to boost money for road improvements — an opinion that Cadman said should end the debate over whether such a move should be undertaken.

Democrats and business leaders have ramped up a campaign over the past month to convince reluctant Republicans to pull the seven-year-old hospital provider fee out from under the state’s Taxpayer Bill of Rights revenue cap and make it into an enterprise, which would significantly increase the chances of the state general fund transferring $800 million to transportation over the next four years.

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Colorado Senate President Bill Cadman points on Jan. 6, 2015 to an oversized copy of a… more

Ed Sealover | Denver Business Journal

Road funding is tied to the fee — which hospitals charge upon themselves and leverage the revenues to get more federal funding — because road funding falls when revenues exceed the TABOR cap, and exceeding the cap is far more likely if the roughly $700 million a year coming in from the fee counts against the cap.

Cadman, R-Colorado Springs, said he had been working through the off-season to come up with some legislative solution to the fee/road funding issue when he decided to ask the Office of Legislative Legal Services (OLLS) on Dec. 31 for its opinion on the legality of enterprising the fee.

He said he received the opinion back within 40 minutes, leaving him assured of the definitiveness of the answer and of the belief that someone had sought the opinion before.

“There is no 'maybe' in this opinion. Our attorneys say it shall not stand,” Cadman said at a news conference in his Capitol office one week before the Jan. 13 start of the four-month legislative session. “And we’re going to honor it just like we honor the constitution.”

But Henry Sobanet, director of the governor’s Office of State Planning and Budgeting, issued a statement in reaction to Cadman’s release of the memo saying that Hickenlooper’s office worked with office of state Attorney General Cynthia Coffman in 2015 before it first proposed the idea of converting the hospital fee, which then became a bill that passed the House but died in the Senate. It was assured that turning the fee into an enterprise is legal, he said.