Memo mud­dles hos­pi­tal fee e≠ ort

Cad­man says a TA­BOR ex­emp­tion is un­con­sti­tu­tional.

The Denver Post - - FRONT PAGE - By John Frank

Colorado’s top Repub­li­can law­maker on Wed­nes­day re­vealed a le­gal mem­o­ran­dum ar­gu­ing that it is un­con­sti­tu­tional to ex­empt the cur­rent hos­pi­tal provider fee pro­gram from the TA­BOR rev­enue cap — a smok­ing gun, he con­tends, that snuffs the gov­er­nor’s top leg­isla­tive pri­or­ity.

The non­bind­ing opin­ion, from the non­par­ti­san Leg­isla­tive Le­gal Ser­vices, cited a state Supreme Court case to as­sert that the cur­rent hos­pi­tal provider fee pro­gram can­not qual­ify as an en­ter­prise fund be­cause it does not meet the re­quire­ments for a gov­ern­men­towned busi­ness.

Se­nate Pres­i­dent Bill Cad­man, who Dec. 31 asked the leg­is­la­ture’s at­tor­neys whether such amea­sure is le­gal, pointed to a line in the memo that states, “Short an­swer: No.”

“I had been work­ing to­ward find­ing a leg­isla­tive so­lu­tion, but there is no leg­isla­tive work­around to the con­sti­tu­tion,” the

Colorado Springs law­maker said, stand­ing in front of the memo en­larged to poster- size for dra­matic ef­fect. “Our at­tor­neys told us that.”

Demo­cratic Gov. John Hick­en­looper be­gan push­ing leg­is­la­tion to con­vert the bil­lion- dol­lar hos­pi­tal provider fee pro­gram to an en­ter­prise fund, mean­ing its rev­enues would be ex­cluded from the rev­enue lim­its in the Tax­payer’s Bill of Rights last leg­isla­tive ses­sion. The fee— es­ti­mated at more than $ 750 mil­lion in the next fis­cal year — is push­ing the state above the rev­enue cap and forc­ing tax­payer re­funds even as other ar­eas of the bud­get face spend­ing cuts.

To make the hos­pi­tal fee con­ver­sion le­gal, leg­isla­tive ser­vices ar­gued, “the Gen­eral As­sem­bly would … have to cre­ate a new TA­BOR-ex­empt en­ter­prise to charge and col­lect” the fee, a move Repub­li­cans ap­pear un­will­ing to con­sider.

Even though the memo is new to Repub­li­cans, it is es­sen­tially iden­ti­cal to a March 16 opin­ion pro­vided to Demo­cratic Sen. Matt Jones, who then shared it with the gov­er­nor’s of­fice.

Hick­en­looper’s bud­get di­rec­tor, Henry Sobanet, called the leg­isla­tive memo “fa­tally flawed and in­com­plete le­gal anal­y­sis,” and sug­gested Repub­li­can At­tor­ney Gen­eral Cyn­thia Coff­man’s of­fice green­lighted the gov­er­nor’s ef­fort in 2015, when it died in the Repub­li­can- led state Se­nate.

“We worked with the AG’s of­fice last year, and they con­firmed that noth­ing in TA­BOR pre­vents the leg­is­la­ture from fol­low­ing this path,” Sobanet said in a state­ment. “TA­BOR ex­plic­itly pro­vides for this struc­ture. To say HPF can’t be an en­ter­prise makes no sense.”

Coff­man spokesman Roger Hud­son said the at­tor­ney gen­eral “has not is­sued a for­mal opin­ion.”

Still, the duel­ing le­gal analy­ses only com­pli­cate a topic ex­pected to dom­i­nate the leg­isla­tive ses­sion.

The hos­pi­tal provider fee con­ver­sion would give state law­mak­ers more money to spend in the next fis­cal year as Hick­en­looper fore­casts about $ 370 mil­lion in cuts. But the move would negate tax­payer re­funds in the fore­see­able fu­ture, and crit­ics sug­gest that it weakens TA­BOR.

Cad­man ar­gued that the state isn’t fac­ing “a bud­get prob­lem — what we have are frankly some pri­or­ity chal­lenges.”

The po­lit­i­cal pres­sure on the is­sue be­gan to es­ca­late in De­cem­ber when Amer­i­cans for Pros­per­ity, an arm of the Koch broth­ers’ pow­er­ful con­ser­va­tive net­work, be­gan ask­ing Colorado law­mak­ers to sign a pledge to pro­tect TA­BOR.

This week, Repub­li­can law­mak­ers es­sen­tially ended ne­go­ti­a­tions on a pos­si­ble deal to ex­empt the fee in ex­change for ded­i­cated spend­ing on roads and schools, be­fore even learn­ing of the memo.

“One of AFP Colorado’s top pri­or­i­ties this year is to help stop this back- door dis­man­tling of TA­BOR,” said Michael Fields, the or­ga­ni­za­tion’s state di­rec­tor.

In an in­ter­view ear­lier Wed­nes­day, be­fore the memo’s release, Hick­en­looper ex­pressed sur­prise at the en­trench­ment and sug­gested there is no vi­able op­tion.

“My in­ten­tion is to reach out to them and say, ‘ What are the al­ter­na­tive plans that are go­ing to gen­er­ate the rev­enue we need to move this state for­ward?’ ” he told re­porters.

One pos­si­ble op­tion is a ballot mea­sure to ask vot­ers’ ap­proval for the ex­emp­tion. But Hick­en­looper sug­gested it wouldn’t suc­ceed.

“If you went and took it to the vot­ers, I think it’s highly pos­si­ble that they would vote it down just be­cause they are so an­gry at all forms of gov­ern­ment,” he said. “I don’t think that nec­es­sar­ily means that’s the best thing for the state.”

Cad­man said le­gal ser­vices sent him the opin­ion in less than an hour and in­sin­u­ated that Democrats asked for the memo months ago and in­ten­tion­ally con­cealed it.

“It kind of feels like ( Hick­en­looper has) been rid­ing around the state in a Tro­jan horse offering peo­ple state vouch­ers and they’ve been lin­ing up here ( at the Capi­tol) to cash them,” Cad­man said of the gov­er­nor’s statewide tour to pro­mote the plan.

The Den­ver Post re­viewed the March 16 copy sent to Jones. In an in­ter­view, Jones con­firmed he re­ceived the opin­ion and dis­missed Cad­man’s sug­ges­tion, say­ing it is com­mon for law­mak­ers to ask for le­gal memos, which are confidential.

“You should ask Sen. Cad­man how many confidential memos he has,” Jones re­torted, call­ing Repub­li­cans’ big re­veal “just a sideshow.”

“I’m hop­ing for a pos­i­tive, bi­par­ti­san ses­sion,” Jones said, “and this isn’t a good foot to start on.”

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