Phil Castle, The Business Times

Split control of the Colorado Legislature  stymied the passage of some measures during the latest session.

“It was like a bad soccer game that ends in a 0-0 tie,” said State Sen. Ray Scott, a Republican from Grand Junction.

Whether that was a good or bad thing, though, depends on who you ask and what specific measure was involved. Efforts to shift a hospital provider fee into an enterprise fund, for example, provoked disagreement among Scott and two other state lawmakers from Western Colorado.

State Rep. Dan Thurlow, a Republican from Grand Junction, said shifting the fees would mean money that must be paid back to hospitals would no longer count against constitutional tax and spending limits. That would potentially free up revenue in the general fund above the limit that otherwise must be rebated to taxpayers.

Scott, Thurlow and State Rep. Don Coram, a Republican from Montrose, discussed the hospital provider fee as well as other issues at a legislative wrapup breakfast hosted by the Grand Junction Area Chamber of Commerce a week after the latest session concluded.

While Republican lawmakers constitute the majority in the Colorado Senate, Democrats control the House. That can make it difficult for some measures to make it through the process, Scott said.

A bill that would have prevented severance tax revenues from being used to balance the state budget passed in the Senate, but not the House, Scott said. “We’ll take another run at that again next year.”

Another measure designed to level the playing field for farmers and ranchers appealing groundwater rights rulings passed in the House, but was killed by a Senate committee.

Some measures were enacted, though, Scott said, including one authorizing a study of outsourcing services provided by the Colorado Division of Motor Vehicles — such as renewing driver’s licenses — to reduce waiting times without building new offices. Scott said 22 other states use third-party vendors to provide such services. “It just makes sense.”

Thurlow said he was disappointed by the failure of efforts to shift the hospital provider fee to an enterprise fund and address at least part of what he described as an “irrational” budgeting process.

The hospital provider fee was created in 2009. Hospitals pay the fee based on the size of their operations. That revenue is matched by federal funding and then paid back to hospitals to increase their reimbursements for treating patients enrolled in Medicaid or the state indigent care program.

Thurlow said the hospital provider fee should have been established as an enterprise fund because it involves specific revenue used for a specific purpose — unlike the tax revenues that go into the general fund. Twenty enterprise funds have been set up to handle everything from hunting license fees to lottery proceeds, he said.

Since the hospital provider fee isn’t an enterprise fund, revenues count against the tax and spending limits imposed under the Taxpayers Bill of Rights, Thurlow said.

When revenues exceed the TABOR limit, they must be rebated to Colorado taxpayers. But those rebates come from the general fund, Thurlow said. As increasing hospital provider fees constitute a greater proportion of state revenues and push those revenues over the limit, more money must be taken from the general fund for rebates. That creates what Thurlow called a “barrier” to investing in education and transportation.

Coram said he thought it was a good time to shift hospital provider fees to an enterprise fund because what he expected would be a court challenge would determine the legality of such a move.

Scott said he never voted one way or another on the hospital provider fee because one measure died in a Senate committee and another measure never was considered by the Senate. Nonetheless, he said he would have voted no.

Despite economic growth on the Front Range, other areas of Colorado haven’t fared as well, Scott said. Moreover, the Legislature hasn’t demonstrated fiscal restraint for a number of years. “We’ve got to get our fiscal house in order.”

Instead, Scott said he prefers to put the matter before voters.

Thurlow said he’s concerned that as hospital provider fees grow and less general fund revenues are available for other functions, voters could be prompted to take action in another way in repealing TABOR. “I think TABOR is a good idea. I respect TABOR,” he said.