"Hospital Fee" Shift Unconstitutional, Says Senate President

The best legal minds in the Capitol building, seasoned professional lawyers with the nonpartisan Office of Legislative Legal Services (LLS), definitively determined that the widely sought increase in state spending – by shifting the Hospital Provider Fee off-budget – clearly would violate Colorado’s Constitution. That’s what Senate President Bill Cadman told reporters Wednesday, just a week before the 2016 legislative session begins. 

Cadman uncovered the truth one week ago while researching the intricacies and legalities of Gov. John Hickenlooper’s proposal to exclude hundreds of millions of dollars in annual HPF revenue from the general fund budget, thereby avoiding taxpayer refunds required by the Taxpayer’s Bill of Rights when the budget exceeds a predetermined threshold.

The Governor and other Democrats have for more than a year been promoting the maneuver as a way to avoid paying TABOR refunds and free up millions in “new” revenue that wouldn’t otherwise be available. Legislative Legal Services staff explain why such a move is unconstitutional in a 6-page Legal Memorandum Cadman received from LLS while researching HPF-related legislation. Cadman was surprised when the detailed, thoroughly-researched analysis materialized less than an hour after his information request, strongly suggesting it originally was written at an earlier time, most likely in response to the drafting of the Democrat bill offered during the 2015 session where the HPF Enterprise shift was first formerly proposed.

Who on the Democrat side has seen the memo, or is aware of its findings, is unknown. But Cadman said he is convinced beyond any doubt, based on his nearly 16 years as a lawmaker, that his wasn’t the first set of eyes to see it, raising questions about whether one or more Democrats knew from the beginning that their proposal was fatally flawed. It also raises questions about why this information is just coming to light now – and why it wasn’t publicly disclosed by Democrats in the year that they’ve been touting this idea.

The bottom line, said Cadman, is that the Cash Stash the Democrats want to grab to grow government isn’t available, meaning both parties will have to get back to the hard work of balancing a budget the old-fashioned way, by making tough choices and setting priorities. The state is not in the midst of a budget crisis, Cadman said, contrary to the perception Democrats have been creating in order to promote their supposed “fix.”

“We’ll have the largest budget in Colorado history, which current projections say will grow by nearly 3 percent under current law, even after we’ve given taxpayers refunds the law requires,” Cadman said. “Colorado doesn’t have a funding crisis; it has a spending addiction that Democrats have pushed into unsustainable government programs for over 10 years.”

He highlighted for reporters the nearly quarter of a billion dollar annual increase to state-run health care entitlements Democrats have mandated for nearly a decade. Colorado’s Medicaid program is now consuming nearly 40% of every general fund dollar and is covering nearly 1.3 million people.

“Since today is the 12th Day of Christmas, it marks the end of the holiday season. With that it seems appropriate to reveal why Santa Clause can’t put $700 million of Colorado money in his bag and hide it from the constitution.”

Those who dismiss the memorandum as “just another legal opinion” are discounting the judgment of the best legal minds at the Capitol building – nonpartisan professional staff to whom every legislator from both parties turn for trusted guidance, given the hundreds of years of collective experience the office boasts. Moving forward on a bill judged by staff lawyers to be so fatally flawed -- and spending money the state can’t legally spend -- invites legal challenge, public backlash, and fiscal ruin if some court in the future orders any misspent money paid back.

“To disregard this red flag is reckless in the extreme, like trying to slip past the guard gates before the locomotive comes through, and we’re not prepared to ignore the warning signs and put taxpayers at additional risk,” said Cadman. “Swearing an oath to support our Constitution does not have an escape clause.”

Please contact Sean Paige at 719-337-0355 with media inquiries.

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