JBC Takes First Steps Into ‘Fiscal Thicket’

(Nov. 12) – The process of drafting the 2016-17 state budget got under way this morning when the legislative Joint Budget Committee reconvened to hear Gov. John Hickenlooper testify about the cuts he outlined in his budget proposal last week.

Rep. Millie Hamner, D-Dillon, who was formally installed this morning as chairwoman of the JBC, welcomed Gov. Hickenlooper and Henry Sobanet, the director of the governor’s budget office, by noting that the estimated $373 million budget gap that forced the proposed cuts “could have been avoided” if a bill removing the hospital provider fee from the general fund had passed the legislature in the 2015 session.

The bill would have reclassified the hospital provider fee, a program instituted in 2009 as a vehicle to drive Medicaid reimbursements, as a cash-funded enterprise, preventing the state from hitting the spending limits added to the Colorado constitution by the Taxpayers Bill of Rights.

In the absence of the bill, the governor defended his proposed $100 million reduction in hospital provider fees, which would get doubled to a $200 million loss for hospitals when matching federal funds go away. This would lessen the rebate liability the fees create under the TABOR limits. The budget also cuts most medical provider reimbursement rates by 1 percent, which would equal $52.6 million in total funds.

Rep. Hamner expressed concern that the cuts in healthcare funding would fall most heavily on Western Slope and rural Coloradans, and also took note of the proposal’s $50 million increase in the underfunding of K-12 education.

Transportation funding was another topic of alarm, as many in the room agreed congestion is not only unpleasant but stifles economic opportunity. The proposed budget would not allow for funds to be dedicated to solving the problems of traffic congestion along the Front Range. Gov. Hickenlooper compared the Fort Collins-to-Colorado Springs corridor—which he called a slow-moving parking lot—to states like Utah, which has built eight-lane highways and expanded light rail service to provide transportation for fewer people in transit than across the Front Range.

“All these cuts, if we must make them, will be tough to swallow, especially when Colorado’s overall economy is doing well,” Rep. Hamner said after the governor’s presentation. “I expect the hospital provider fee bill to be presented again in the 2016 session, and I will be a strong supporter of any solution that allows us to provide a level of services that will adequately support our growing state.”

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