The tightrope state legislators have been trying to walk in the attempt to find the billions needed to pay for the state’s transportation needs and the millions needed to beef up public education just grew a little tighter.
House Speaker Crisanta Duran today said that the two needs cannot be tackled separately and cannot be resolved with the Republican leadership’s call for a solution that requires cuts in exchange for increased transportation funding. The search for a solution, she told reporters this morning, must put back into play a money source GOP lawmakers have rejected out of hand: the hospital provider fee.
“We are at a crossroads,” Duran said. “We want to invest in transportation, but that doesn’t mean we put at risk the future of kids in this state…If you start to take general fund dollars for transportation, that will have an impact on education.”
Duran’s comments today took some of the people who have been negotiating the transportation solution by surprise, including Sandra Hagan Solin, the head of Fix Colorado Roads, a coalition of business groups.
The coalition sent a letter to Gov. John Hickenlooper and legislative leaders today, encouraging all parties to continue working on a balanced solution that comes up with long-term, dedicated and sustainable funds for transportation.
“It’s getting harder to explain the state’s insufficient investment in transportation infrastructure to our prospects. It’s time for a balanced compromise plan to restore Colorado’s commitment to transportation investment,” said Rich Werner, president of Upstate Colorado Economic Development.
Less than a month ago, Democratic leaders in the state House said that reclassifying the state’s hospital provider fee was the least likely of options for coming up with dollars to help pay for a $9 billion list of road, bridge and other transportation needs.
The fee, set up by lawmakers in 2009, raises money to pay for uninsured care at hospitals and Medicaid costs. It brings in about $750 million per year, funds that count under the state’s revenue limits under the Taxpayer’s Bill of Rights. Once the state exceeds the limit, those dollars have to go back to taxpayers in the form of refunds.
Democrats have tried unsuccessfully for the last two years to reclassify the fee as an enterprise, also known as a state-owned business, which would remove it from TABOR mandates and provide hundreds of millions per year for other state needs. The governor last month made another pitch to lawmakers to reclassify the fee, and Senate Minority Leader Lucia Guzman of Denver is sponsoring a reclassification bill.
Senate Republicans, most notably then-Senate President Bill Cadman of Colorado Springs, drew a line in the sand on the fee last year, claiming that reclassifying the fee would violate TABOR, and he was backed by a legal opinion from the General Assembly’s attorneys.
New Senate President Kevin Grantham of Cañon City has held firm to the same opinion, stating last month that any discussion of the hospital provider fee was a “non-starter.” Through a spokesman, he said today that he had no comment on Duran’s remarks.
Republicans have been advocating for a “revenue neutral” solution – one that would use existing general fund dollars in part to pay for transportation, and that means reprioritizing other state needs. But some Republicans also support using some of the state’s federal share of gas taxes, which could then be used as collateral for bonds. A solution that involves bonds would have to be approved by voters.
Democrats have indicated they favor going to the voters, too. One Democratic solution is to ask voters to increase the state’s sales tax, which could also be used as collateral for bonds. Democrats also like the idea of a one-third, one-third, one-third proposal. One-third of the funds would be spent on highway projects, such as the widening of I-25 north of Denver or widening I-70 through downtown Denver; another third would go to local governments to deal with transportation needs specific to those communities; and the last third would be spent on transit, or as it’s referred to in Democratic circles, “mobility,” which can be anything from mass transit to transportation needs for seniors or those with disabilities. That last third is a big hang-up for Republicans, who question using so much for those needs.
Duran today said her concern is that the Republicans’ desire to cut the state budget to free up dollars for transportation, means less dollars available to fund K-12 education. And Duran told reporters, the state is at a critical point this year as it relates to education funding. This year, local school districts are facing a cut of $170 million, a consequence of a funding formula viewed by many as outdated. The state will have to find a way to cover that loss. That translates to about $122 per student, Duran said.
The hospital provider fee and the money it frees up could help pay for both transportation and education needs, Duran said.
Solin of the Fix Colorado Roads coalition indicated she doesn’t take Duran’s remarks today as a hiccup in the negotiations.
“Surprising, yes, but not terribly,” she told The Colorado Independent. “This is where Duran has been for two years. How we bridge and find the middle ground is key, and so long as neither side is drawing lines in the sand, there’s still hope for a solution.
For now, Solin said, everyone is putting their ideas on the table and she hopes they can then begin to come to agreement on priorities. At the end of the day, however, “there needs to be a respect on both sides of the aisle for what the other needs to be comfortable with a final solution. Right now, each is suggesting what’s important for them. That’s okay. It’s part of this ugly process.”
“I advise calm.”
Photo credit: _ChrisUK via Flickr:Creative Commons