With just days left to work, state lawmakers say they’re finally ready to move ahead with perhaps the biggest bill of the year.
Lawmakers announced a deal Thursday on bipartisan legislation that would make big changes to how Colorado manages its finances.
The deal, centered on something called the hospital provider fee, is a sweeping measure that touches nearly every aspect of state government spending — including health care, transportation, and taxes. The grand compromise comes after a dramatic public dust-up earlier this week, when Democrats and Republicans both charged each other with trying to scuttle the deal.
In the end, party leaders made key concessions that got them to an agreement.
The legislation’s major drivers are proposed cuts to hospitals in the 2017-2018 state budget. Without this bill, hospitals stand to lose $528 million, including federal matching dollars.
“Each side had different asks going into this, and I think because we're both not smiling really big, we both love and hate pieces of this - which is exactly where it should have ended up,” said Republican Rep. Jon Becker, R-Fort Morgan, who was part of a small group of lawmakers who worked on the deal.
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The bill would also pump $1.8 billion in funding for roads and transportation projects. And about $120 million would be used to pay for the upkeep of state buildings, which is facing a backlog of deference maintenance. The state will use money from the sale and leasing of state buildings to pay for that.
Additionally, the bill includes relief for many small businesses that pay taxes on things like office equipment and supplies, through the business personal property tax.
“There was a lot of bipartisan support for that.” said Democratic House Majority Leader KC Becker. “Small businesses hate (the tax) because there’s a lot of paperwork and annual hassle on property taxes on different equipment.”
The two sides were able to reach an agreement after compromising on a key point of division: hikes to Medicaid copays. Democrats scoffed at an original Republican proposal, which would have required the state to set Medicaid copays at the federal maximum. Instead, the two sides reached a compromise that would increase prescription copays from an average of $1.25 to $2.50. It also hikes copays on some outpatient services.
Rep. KC Becker insists that “no Medicaid patient can be turned away for not having money for prescriptions or outpatient services,” and that some of the financial impact would fall on providers.
“The idea of raising copays is a really hard one for us because it impacts the poorest people,” she said. “But I think we really did limit it and tighten it up.”
Republicans also had to give up some things they wanted. The bill — through the reclassification of a fund to pay for health care for low-income Coloradans — would allow the state to keep more of its revenue, in theory. That’s because the move allows the state to move hundreds of millions of dollars out from underneath the spending cap set forth by the Taxpayer Bill of Rights, which mandates tax refunds when revenues exceed the rate of inflation and population growth.
The Republicans’ original offer sought to reign in state spending by significantly lowering the TABOR cap that triggers refunds. Democrats wanted more money freed up to spend on K-12 and higher education. The two sides compromised on a $200 million reduction in the revenue limit, down from a much higher cap originally proposed by Republicans.
Overall, it’s a boost for rural Colorado. In addition to preventing potential hospital closures, the deal mandates some money for rural schools and roads.
The bill was stalled in a Senate committee for weeks as the two sides wrangled over a deal. Negotiations seemed to have reached an impasse as recently as Monday, when Democrats and Republicans were pointing fingers over a deal that seemed lost.
“It’s not always easy to stay at the table, especially when the parties aren’t exactly happy at the time of what's going on,” said Rep. Jon Becker. “But we knew we needed to keep going forward and find common ground, and we did that. No matter what was reported, everyone was respectful in how these negotiations moved forward.”