Taxpayers to Benefit From $67 Million Windfall Due to Fiscal Oversight
Even as Gov. Jared Polis puts the budget package into law, state lawmakers are scrambling to find a way to close a $67 million hole.
The shortage is the result of a significant error by the Health Insurance Affordability Enterprise. An audit revealed that the firm treated the money it received as exempt from state revenue limits under the Taxpayer Bill of Rights, or TABOR.
According to State Budget Director Mark Ferrandino, the law that established the enterprise did not specify whether the funds should be included toward the TABOR limit. He claims the Attorney General’s Office ruled last month that it does. That means the state will owe taxpayers $67 million more in TABOR reimbursements than expected.
Republican State Sen. Barb Kirkmeyer, a member of the Joint Budget Committee, is drafting legislation that would use funds the enterprise would have received this year and next year to assist cover nearly $33 million of the refund.
The remaining $34 million might be funded by the state’s reserve or by increasing health insurance premium levies. The venture is funded by a 2% premium tax levied on all Coloradans with state-regulated insurance plans.
Republican State Sen. Jim Smallwood opposed the levy when it was enacted and believes Coloradans should not be forced to pay for the company’s error.
“For an administration that’s prided itself on trying to do whatever we can ostensibly to lower the cost of health care and health insurance for people, raising a tax on health insurance premiums sounds ludicrous to me so I would certainly hope the governor and governor’s office does not seriously consider that as an option,” he went on to say.
Smallwood claims that increasing the levy on insurance premiums would not generate enough revenue to fill the shortfall.
The Health Insurance Affordability Enterprise helps subsidize insurance in high-cost areas of the state, non-citizen health care, and the state exchange’s education and outreach. Ferrandino claims the company has enough money in reserve to maintain operations.