Guest column: The real state budget issue
Thanks to the Taxpayer Bill of Rights, it’s likely that Coloradans will receive hundreds of millions of dollars in tax refunds in coming years. That is unless Gov. John Hickenlooper and some legislators at the state Capitol get their way. These elected officials want to hold those refunds hostage to pay for their own mistakes, particularly the irresponsible and costly decision in 2013 to expand Medicaid as part of Obamacare.
Last week, state legislators introduced an obscure budgetary gimmick that spells bad news for every Coloradan. Speaker of the House Dickey Lee Hullinghorst put forward bills to take the fees that Colorado hospitals collect, which are matched with federal funds, and put them into an “enterprise fund” (as opposed to the general fund). Earlier this year, Hickenlooper acknowledged that he is pushing for this change in the Legislature because polling shows that it would be voted down if voters were actually allowed to weigh in.
What does any of this mean? In layman’s terms, lawmakers have mismanaged the state budget, and now they want to claim a bailout from money they owe us.
Reclassifying the nearly $700 million hospital provider fee means the money brought into the budget through the fee no longer counts toward the state revenue limit that triggers our Taxpayer Bill of Rights refunds. Lawmakers now say they need our refund money, ours by state constitutional right, because roads and other services are facing cuts in this year’s budget.
Simply put, our state government has overpromised beyond its financial means, with Obamacare’s Medicaid being the biggest overpromise of all.
The expansion of Medicaid increased the number of people depending on poorly run government health insurance. While Medicaid was intended to be a safety net for the truly neediest, the expansion has transformed it into Colorado’s largest insurer, covering 1.3 million people — nearly one-quarter of our population.
This is far more expansive and costly than the state originally estimated. Starting next fiscal year, the hospital provider fee will cover more than $40 million of the cost of new Medicaid enrollees, according to analysis by the Joint Budget Committee. By 2020, Colorado will cover 10 percent of those new costs, with an estimated $140 million coming from the hospital provider fee, based on current budget predictions.
Yet even relying on the hospital provider fee won’t protect taxpayers and the budget from the expansion’s costly impact. The Colorado Health Institute acknowledges that “households will bear the burden either through a tax increase or a reduction in state services elsewhere.”
That’s what’s playing out now. Medicaid now dominates 24.4 percent of the state’s budget for the current fiscal year, according to the Colorado Health Institute. The ballooning cost of this program is crowding out other items on the state budget, forcing tradeoffs as roads and education compete for a smaller piece of the budget pie. The budget is facing at least $123 million in cuts to keep from triggering our refund for 2016 alone, and still the growing cost of Medicaid means it will become even harder to adequately fund other necessary services in the years to come.
By denying us the refunds we’re owed by constitutional right, lawmakers would be turning our money into a slush fund, double-dipping into our wallets to pay for their unsustainable spending. This would essentially be a tax increase to help budget planners and legislators pay for promises they couldn’t realistically afford to make in the first place.
In the aftermath of this expansion, lawmakers should be honest about the budgetary challenges their out-of-control spending is causing. Accounting gimmicks are not a sustainable way to run Colorado — they just hide the fact that our government can’t balance its books without taking more from hardworking taxpayers.
Michael Fields is the state director for Americans for Prosperity-Colorado, a free-market, grassroots organization with more than 127,000 Colorado activists.
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