A Republican-controlled state Senate committee has rejected a bill to reclassify a fee paid by hospitals in order to use future budget surpluses on education and transportation.

Democrats sponsored the plan and say the change is needed because the fee is prompting taxpayer refunds, even though the money is not in Colorado's general fund. That fund is made of taxes.

Colorado requires taxpayer rebates when tax collections exceed the rate of inflation and population growth.

Reclassifying the hospital fee so it doesn't count toward the spending limit would have stopped about $435 million in refunds in three years. Democrats warned of tough budget years if the change isn't made.

But Republicans on a Senate committee killed the bill on a 3-2 vote on Tuesday. They say taxpayers should get the refunds.