DENVER – After months of political pressure and behind-the-scenes negotiations, Democrats finally brought a bill to the House floor for debate that would let the state retain millions in taxpayer refunds that otherwise would be required under the Taxpayer’s Bill of Rights.

House Bill 1420 passed the House of Representatives on a preliminary voice vote with the support of at least two Republicans.

The bill has a Republican sponsor in the Senate, too.

But the governor-backed proposal still has an uphill climb.

Most of the rest of the GOP caucus – including the leader of the Republican-dominated Senate – oppose the measure.

Republicans in the House Thursday didn’t hold back on their criticism.

“This is taking their refund away and saying we need it more than you,” said House Republican Leader Brian DelGrosso of Loveland.

It’s undeniable that the result of HB 1420 would be that projected tax refunds wouldn’t come to fruition, but Speaker of the House Dickey Lee Hullinghorst was emphatic it’s not an “end-run around TABOR.”

Voters approved TABOR in 1992 as a way for voters to restrict the growth of government, primarily by requiring voter approval for new taxes or tax increases and by restricting how fast state revenue can grow by requiring tax refunds for revenue over population and inflation growth.

If that “TABOR threshold” is exceeded, the excess revenue must be refunded to voters.

HB 1420 would remove hundreds of millions of dollars generated by a fee on hospital stays, known as the Hospital Provider Fee, out from under the TABOR cap. Doing that would make it unlikely that state revenue would hit the TABOR cap in the foreseeable future.

“This approach honors the TABOR cap approved by voters in 2005 with Referendum C by accurately accounting for a revenue source that isn’t paid for by tax dollars,” Hullinghorst said. “TABOR permits enterprises in exactly this situation.”

Referendum C put a five-year time out in place to allow the state to retain revenue otherwise required to be refunded and also reset the TABOR cap.

The 2015 tax year – tax returns that were filed this April – was the first time that refunds had been required since the 2005 vote. Most taxpayers received around $16.

Democrats have said retaining that money in the future is vital to the state being able to fund education and transportation needs properly.

“No one has given me a strong enough argument yet to say this is a strong enough argument that we should not be investing in our future, investing in transportation, investing in higher education,” Hickenlooper said Thursday, expressing optimism that it might still pass.

“I continue to think we need the Hospital Provider Fee all the more.”

The bill came with a companion piece of legislation, House Bill 1450, that would spend the additional revenue the state would be able to retain with HB 1420.

That bill also passed on second reading Thursday, but not without substantial debate about the priorities it set.

Under the bill, the top priority is transportation funding, which would receive an estimated $50 million in 2016-17. Second in line is restoring severance tax funds that were raided by lawmakers to balance previous budgets. Those funds are paid by oil and gas operators and are meant to go back to local communities to help offset the impact of those operations. It’s estimated the severance tax fund would receive $16.2 million. Third in line is funding for education with an estimate of $40 million and after that if funds are still available almost $50 million could go into a college scholarship fund.

The bill goes so far as to set priority projects for transportation, including things like widening and improving Interstate 70 in Mesa County, Interstate 25 from Castle Rock to Monument, and U.S. 160 from Alamosa to Durango.

Hullinghorst defended those priorities Thursday on the House floor.

Both bills must be considered one more time in the House before going to the Senate. Senate President Bill Cadman, R-Colorado Springs, has final say on what committee the bills will be assigned to and it’s possible he will assign it to a committee that is likely to kill it before it gets to the Senate floor for a debate.

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Contact Megan Schrader: 286-0644

Colorado State Capitol