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Rural aid package, including $400 million for rural schools, advances in Colorado Senate

State Sen. Jerry Sonnenberg, a Republican from Sterling, on the first day of the legislative session. (Photo by Kevin J. Beaty/Denverite)
State Sen. Jerry Sonnenberg, a Republican from Sterling, on the first day of the legislative session. (Photo by Kevin J. Beaty/Denverite)

A bipartisan legislative package that would provide much-needed financial relief to Colorado’s rural schools, roads and hospitals has cleared its first legislative hurdle.

The Senate Finance Committee voted 4-1 Tuesday to advance Senate Bill 267, even as multiple members on the panel voiced frustration with the bill and threatened to withdraw their support if key provisions are meddled with.

The bill, which would send nearly $400 million to rural schools during the next three years, is controversial in part because it depends on the legislature reclassifying a fee paid by hospital patients.

Currently, the hospital fee is sent to the state’s general fund. The money is used to match federal funds to help hospitals pay for services. That general fund is subject to the spending limits in the state’s Taxpayer Bill of Rights, or TABOR. Since 2015, the fee has pushed the state near or above its spending limit and has triggered taxpayer refunds.

If the state moves that fee from the general fund to an enterprise account, the money collected from hospitals wouldn’t be subject to TABOR restrictions.

Changing how the state designates the fee has been a priority for Democrats. But Republican lawmakers have suggested the idea would be unconstitutional.

Republicans are changing their tune this year as some rural hospitals face massive cuts or closure after the state budget committee limited how much the state could collect from the fee.

“Let’s figure out what that fine line is where we can get a compromise to address a number of these problems,” said state Sen. Jerry Sonnenberg, a Sterling Republican and one of the bill’s sponsors.

Even with enough votes to get out of the Republican-controlled Senate — something unimaginable just a few months ago — the bill’s fate remains uncertain.

Democrats in the House want a key provision of the bill changed. The bill, as drafted, requires the state to lower how much money it’s allowed to spend by about $600 million. Democrats in the House want to keep the spending limit where it is to allow more flexibility in the state budget.

Republican state Sen. Owen Hill, a member of the finance committee and a supporter of the bill, said sponsors would lose his support if Democrats overreached.

He called lowering the legislature’s spending limit “the lynchpin” of the bill.

Earlier this week, Sonnenberg said he’d allow the bill to die if Democrats touch that portion of the bill.

State Sen. Tim Neville, the lone Republican who opposed the bill Tuesday, acknowledged the problems facing rural Colorado.

“I wish I could say this is the solution to those problems, or even a good bandage,” he said of the bill. “However, it is not.”

During testimony, rural school superintendents and school board members outlined the financial hardships their schools face.

They said the financial support the state has provided since the Great Recession has not kept up with the costs of operating schools. Perhaps the greatest struggle, they said, is paying teachers a living salary.

“Frustrations are high amongst teachers,” said Rob Sanders, superintendent of the Merino school district. “Many are not only talking about retiring, many are retiring as soon as they can. We’re losing teachers to Target and Walmart.”

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