With the promise of another round of deep state budget cuts
looming, higher education officials are looking to lawmakers for
relief from the Taxpayer’s Bill of Rights. The future of public
higher education in Colorado, university officials and budget
experts said, is at stake.
The Colorado General Assembly starts its next session in early
January, and higher education officials are pressing for changes in
the fiscal policies that govern public universities and
“We are making our budget problems clear to state lawmakers,”
said Peter Nicholls, CSU’s provost and academic vice president. “I
feel the urgency strongly, all the higher university
administrations officials are concerned.”
Two options for CSU to escape TABOR restrictions, Nicholls said,
are a voucher system and enterprise status.
A bill being considered for introduction in the 2004 legislative
session would give each in-state full-time undergraduate student a
$3,000 stipend to be used for tuition. The aim is to find a legal
loophole around TABOR restrictions. The stipends would be
considered payments, not state grants, so they would not be subject
to TABOR restrictions.
A similar bill was killed in the Colorado General Assembly last
State institutions that gain enterprise status are free of TABOR
restrictions. To qualify, CSU would have to get less than 10
percent of its funds form the state. The University of Colorado was
denied enterprise status when it applied last year.
“CSU is exploring ways in which we can get enterprise status,”
Under TABOR restrictions, public universities such as CSU and CU
are strictly limited in setting tuition rates because tuition is
considered state income, just like tax revenue. So when these
universities face big cuts in state funding they are unable to
raise tuition to offset the revenue loss.
Though the economy is rebounding, higher education funding will
likely take another big hit. Joint Budget Committee Staff Director
John Ziegler told lawmakers on the JBC that the 2004-05 state
budget would have to be trimmed by $285 to $330 million.
Since higher education funding is not protected by the state
constitution, it is one of the first places lawmakers look to make
On Nov.17, state legislators on the JBC heard from university
presidents and other higher education officials during a daylong
budget hearing for the Department of Higher Education and the
state’s 28 public colleges and universities. The main topic was
TABOR and how public universities and colleges could find relief
from the law’s strict spending limits.
“We are not seeking to repeal TABOR in any such way or form. We
just want to get the message out that there are unintended
consequences of the law,” Nicholls said.
Higher education funding dropped by $158.6 million between the
fiscal years 2001-02 and 2003-04, and budget analysts predict more
cuts are likely over the next two years. Because of the complicated
mechanisms of TABOR and other state laws, it is almost impossible
for higher education to regain these funding cuts in the future,
legislators and budget experts said.
During the hearing, CU President Betsy Hoffman warned her
university may have to become a “private university” if the state
cannot change the fiscal policies restricting higher education.
“We are preparing for the possibility that we’ll have to be a
private university by 2010,” Hoffman told state lawmakers. Hoffman
predicted that without relief from TABOR restrictions higher
education’s share of General Fund dollars — now at $686 million —
would fall to nearly zero.
After the hearing, Hoffman told reporters that she doesn’t want
CU to become privatized, The Rocky Mountain News reported. “But
people need to wake up,” she said. “It has to be said. We have to
address the limitations imposed by TABOR, the Gallagher Amendment
and Amendment 23, or take higher ed out of TABOR. It’s one or the
Eric Kurtz, a JBC staff member who deals with higher education,
said Hoffman’s prediction was fairly accurate. CU’s prediction that
General Fund support of higher education would disappear is made by
using historical data and projecting it into the future, Kurtz
If no changes are made to the current fiscal restraints on
higher education, then, in 10 years, state general fund support of
higher education would be “virtually eliminated”, Kurtz said.
This is because of the “crowding-out effect” of TABOR.
Constitutionally protected spending items such as K-12, Medicare
and prisons take more and more of the General Fund revenue, leaving
less and less for unprotected spending items like higher
“I’m optimistic 10 years from now CSU will still be a world
class university,” Nicholls said.