Colorado bill restoring hospital subsidies advances

DENVER (AP) — Colorado lawmakers formally launched a rescue mission Friday to spare hospitals in the state severe budget cuts by advancing a bill that features a grab bag of fiscal maneuvers, including raising recreational pot taxes.

The Republican-led Senate approved the bill by voice vote after it was hastily passed by the Senate Finance Committee, whose chair called it "one of the worst pieces of legislation" he has seen in his career.

Republican Sen. Kevin Lundberg's comment presaged debate on a bill that began weeks ago as a rural roads, hospitals and schools funding measure. It has since morphed into a plan to save $528 million in hospital subsidies that rural medical centers, in particular, depend upon.

Lawmakers cut those subsidies to balance a $26.8 billion budget for the fiscal year that begins July 1. That budget was sent to the governor. Legislators have until Wednesday, the session's last day, to find a solution for the hospital subsidies.

The Senate also advanced a K-12 schools funding measure that increases per pupil funding by $242, matching the inflation rate. That and the hospital bill require another Senate vote before they're sent to the House.

The hospital proposal, whose co-sponsors include Republican Sen. Jerry Sonnenberg and the Democratic minority leader, Sen. Lucia Guzman, has elements distasteful to both parties:

—It takes payments that hospitals make to the state to get federal matching grants and removes them from revenue limits imposed by the Colorado Taxpayer's Bill of Rights. The 1992 constitutional amendment restricts what government can receive and spend. Most Republicans see this as a run-around the amendment.

—It lowers the state's spending limit under that bill of rights by $200 million. Democrats blame the limits for underfunded roads, schools and other needs. Republicans blame Medicaid expansion for Colorado's budget woes.

—It calls on state agencies to submit budget proposals 2 percent below current levels.

—It mortgages some state buildings and raises the state sales tax on recreational marijuana from 10 percent to 15 percent to pay for $1.8 billion in bonds for highways. Voters legalized recreational pot in 2012 after pro-weed campaigns stressed that taxes would be spent first on public schools.

There are more details, including a $30-million injection for rural schools, expanding a property tax credit for small businesses and increasing Medicaid co-pays in some circumstances.

The deal follows the failure of a high-profile bill, sponsored by the leaders of the Republican-led Senate and Democrat-led House, to ask voters to raise the state sales tax to finance $3.5 billion in roads bonds.

"This is the most important bill of the session," Guzman said Friday.

But it's a bitter pill for some, even after hospitals such as Grand River Health Clinic in rural western Colorado and Lincoln Community Hospital in the eastern plains applauded the bill.

"I believe this is one of the worst pieces of legislation that I've seen in my 15 years in the Legislature that has a pretty strong possibility of becoming law," said Lundberg, a strong bill of rights supporter. "I find it regrettable that we are moving on this."

"I died today," sighed Republican Sen. Bob Gardner, referring to political backlash he faces for voting for the bill. "But I believe we have to deal with the cost of Medicaid and the impact on rural hospitals in Colorado, and if we don't, we'll be back here for a special session."