College enterprise status could tackle TABOR woes

Facing significant reductions in state funding, public

universities across Colorado are scrambling to find new ways to

support higher education.

Lawmakers and university officials have proposed a plan to

designate public higher education as an enterprise. This

designation would free universities from state limits on revenue

and spending. If less than 10 percent of any state entity’s budget

derives from state general funds it is eligible for enterprise

status, which gives it more freedom to set fees and control

services.

Enterprise status for state agencies is a designation under

TABOR, the Taxpayers’ Bill of Rights, passed in 1992.

TABOR sets strict limits on how much a state agency can spend

and collect, said Joan Ringel, spokesperson for the Colorado

Commission on Higher Education. Colorado’s public universities are

considered state agencies, so the Colorado General Assembly must

approve their budgets, including tuition increases. Public

universities that are designated enterprises would have more

freedom to set their own tuition rates and spending levels, Ringel

said.

The University of Colorado-Boulder attempted to get enterprise

status in last year’s legislative session. CU’s bid was passed by

the Colorado General Assembly but was vetoed by Gov. Bill Owens,

who said that such a system needed to encompass all of Colorado’s

higher education, not just its largest university, according to a

Denver Post article Thursday.

“The devil is in the details when it comes to this type of

thing,” said Sen. Peggy Reeves, a Democrat whose constituency

includes Fort Collins. “With enterprise status, universities get

new flexibility and less regulation, but we need to look at how

much flexibility is allowed.”

Reeves said that the state must maintain control over tuition

rates as well as other issues integral to higher education.

Some state agencies that are designated enterprises have total

freedom from state oversight. This is not the goal for a university

enterprise designation, Ringel said. Instead legislators,

university officials and the CCHE would work together to define an

enterprise system that maintained state oversight over tuition,

enrollment and other important issues, she said.

“I don’t know that it’s the right answer,” Reeves said. “We’re

taking a look at where higher education is going in the next five

to 10 years. This is just one option on the table.”

Once a university is designated an enterprise its state general

fund contributions could not increase above 10 percent, Reeves

said.

“The university is always looking for options to provide relief

from TABOR,” said Gerry Bomotti, vice-president of administration

services at CSU. “These are very important issues to look at.”