Major overhaul to help rural Colo. could be game changer for legislative session

The rural areas of Colorado, where folks feel left behind by the state’s economic rebound, are the focus of a farreaching bill introduced Monday that’s designed to pump millions of dollars into hospitals, roads and classrooms considered to be near the brink of failure.

The measure comes at a critical point when lawmakers are talking about how to spend a $26.8 billion budget and allocate a potential $3.5 billion pot of money for roads — adding another moving part that is expected to complicate and dominate the remainder of the legislative session.

Senate President Pro Tem Jerry Sonnenberg said the bill is necessary to “sustain the economy in rural Colorado.” “We have hospitals that are closing. We have highways that are crumbling and falling apart. And we have an education system that seems to never have enough money to educate our kids,” said Sonnenberg, a Sterling rancher whose district covers 11 counties in eastern Colorado.

Senate Bill 267 would dedicate $300 million to road projects in counties with populations of 50,000 or less, direct $400 million to rural and small school districts and send millions more to rural hospitals with large populations of Medicaid patients.

But the legislation represents a massive overhaul in how the state spends money — shifting money from a statewide transportation account to rural

education, reclassifying the controversial hospital provider fee, mandating 2 percent across-the-board budget cuts next year, lowering the TABOR spending cap and using state buildings as collateral for a $1.35 billion transportation and construction bond.

The smorgasbord measure, sponsored by top Republicans and Democrats, may compete with another measure endorsed by the House and Senate leaders to ask voters for an increase in the sales tax to generate $3.5 billion for road projects, and it could shatter the carefully crafted state budget bill introduced only hours earlier.

“Is this a tough bill? Yes, it is,” said state Rep. Jon Becker, R-Fort Morgan. “Is it a bill that not everybody’s going to like? Yep. That’s something we’re going to have to work out.”

How the bill works

The cornerstone of the bill is a reclassification of the hospital provider fee to remove it from the state’s constitutional limits on spending under the Taxpayer’s Bill of Rights.

The move would avoid a proposed $264 million cut in the budget bill to the state’s hospitals that, when combined with a matching loss of federal grant dollars, would have slashed hospital funding by $528 million next year.

Unlike prior proposals that have failed to attract Republican support, the bill would lower the TABOR cap, potentially restraining spending on other key priorities.

Becker said the budget bill — which also cuts severance tax distributions and shortchanges schools by about $50 million — only underscores the need for immediate action.

“All of those things hurt rural Colorado,” said Becker, one of four bill sponsors. “Something needs to be done, and it needs to be done now. We don’t have time to talk about different solutions — I wish we did.”

In addition to restoring the hospital funding, the bill would free up about $1.35 billion for roads and construction projects by selling a legal interest in a number of state facilities that the state would then lease back from a private owner for no more than $100 million annually over 20 years.

The bulk of the proceeds, $1.2 billion, would be earmarked for state highways, while a separate source of road money, known as the 228 program, would be redirected to fund rural school districts.

The bill also would seek a 2 percent across-the-board spending cut of state agencies — a provision that will give Democrats significant heartburn.

Senate Democratic leader Lucia Guzman, a Denver lawmaker and co-sponsor, acknowledges the proposal is a tough ask.

“This bill is coming through because we have agreed to work with Republicans,” she said. “And a lot of that means we will compromise.”