Thanks to the Taxpayer’s Bill of Rights, it’s likely that Coloradans will receive hundreds of millions of dollars in tax refunds in coming years — unless Gov. John Hickenlooper and some legislators at the 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.
House Speaker Dickey Lee Hullinghorst recently put forward bills to take the fees that Colorado hospitals collect, which are matched with federal funds, and put them into an “enterprise fund” (instead of the general fund). 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.
In layman’s terms, lawmakers have mismanaged the state budget, and now they want to be bailed out by our future tax refunds.
Here’s the reality — Medicaid was expanded 65 percent between 2013 and 2015 in Colorado, increasing the number of able-bodied, childless adults who are depending on this 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 legislature’s Joint Budget Committee. By 2020, that number will jump to $140 million.
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.”
Medicaid now dominates 24.4 percent of the state’s budget for this current fiscal year. 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; still the growing cost of Medicaid means it will become even harder to adequately fund other necessary services in years to come.
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 hard-working taxpayers.
Michael Fields is state director for Americans for Prosperity-Colorado.
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