The Choice Channel

A “Rocky Mountain News” headline warned earlier this month, “College funding teeters on brink: Officials say huge tuition hikes likely if system isn’t fixed.”

With a recession looming large, University of Colorado President Hank Brown fears that a weakened Colorado economy could result in state funding cuts of up to 50 percent and massive tuition hikes.

Yet the state is awash in cash. Last November, Governor Bill Ritter submitted the largest budget proposal in Colorado history - a whopping $18 billion for fiscal year 2008-09. Much of the additional money courtesy of taxpayers who narrowly approved Referendum C, which lifted the state’s constitutional spending cap for five years and permanently raised baseline spending thereafter.

Referendum C passed in 2005, when lawmakers, business leaders, higher ed officials and special interest groups asked Colorado voters for a “timeout” from the spending restrictions of the Taxpayer’s Bill of Rights (TABOR) in order to allow state government spending to recover from the recession of 2001-2002, which saw higher ed funding slashed while K-12 funding continued to rise.

Ignoring other fiscal complications and constitutional commitments, campaign literature promised that extra money would be split evenly between K-12 education, higher ed and health care. News organizations reiterated the campaign literature promises regarding how surplus TABOR revenue would be spent.

Two days after the 2005 election, Colorado Senate President Joan Fitz-Gerald was quoted in a news article, “We’ve already agreed it would be 33 1/3, 33 1/3 and 33 1/3″ for K-12 education, state colleges and health care.

With the Ref. C tab now at $6 billion and climbing, higher ed should have received nearly $2 billion in additional funding. According to a Joint Budget Committee report, nearly $3.2 billion in Ref C surplus already has been split almost evenly between K-12 education, tuition stipends for college students, and health care subsidies for Medicaid participants.

So how can higher ed in Colorado be so financially strapped that its institutions are looking at massive tuition hikes?

A closer examination of the state budget reveals that Ref. C target areas did not benefit as much as the remainder of the state budget. Spending on programs not associated with Ref C has grown by 28.7 percent, more than twice as fast as spending on education and health care (11.9 percent).

How did that happen? After Ref. C passed, lawmakers approved a fiscal shell game, reducing K-12, higher ed and Medicaid spending from existing sources, then replacing those funds with money from Ref. C. In some instances, education and health care actually received less money immediately after Ref. C passed.

The Joint Budget Committee’s 2006-07 Appropriations Report details what happened. After Ref. C passed in November 2005, higher ed initially absorbed a $271 million general fund cut, mostly offset by a $253 million Ref. C appropriation.

The first “Excess State Revenue Report,” mandated by Ref. C explains how the shell game technically complied with Ref. C’s language, while breaking the promises made to the voters: although programs not identified in Ref. C “may have received funds that would not have otherwise been available, they did not receive funding directly from Referendum C.”

The fiscal maneuvering gave lawmakers the opportunity to divert financial resources to programs not mentioned in the Ref. C language or campaign literature. In the first year alone, lawmakers diverted more than $800 million away from Ref. C priorities and into other spending areas.

Voters were told that without Ref. C dollars, Colorado’s public institutions of higher education would be privatized and lower-income students could kiss their college dreams goodbye. Three years later, we hear the same type of doomsday rhetoric.

Voters have cause to feel double-crossed. Prior to Ref. C, the state’s annual subsidy to colleges and universities was cut from $750 million to $498 million with students and parents picking up the slack by paying higher tuition. For 2007-08, general fund spending on higher ed is $746 million - still below pre-recession levels.

Based on promises made during the 2005 Ref. C campaign, it’s fair to assume that Colorado voters expected that higher education would fare better than those programs not identified with Ref. C.

When lawmakers look to raid taxpayers’ wallets yet again, hopefully voters will remember promises made and broken.

Amy Oliver is the Operations Director for the Independence Institute. She can be reached at amy@i2i.org.