Legislators, state officials and leaders of Colorado’s cash- starved higher-education community are poring over an obscure memo from the Office of Legal Services with the intensity that tabloid television reserves for the moldering remains of Anna Nicole Whatzhername.
The Oct. 12, 1993, memo is headed: “Discussion of aspects of the state general fund appropriations limit … and a ‘significant restructuring’ of the method by which elementary, secondary, or postsecondary education is financed.”
Simply put, this legal analysis may offer Colorado a way out of the fiscal trap that is pouring hundreds of millions of dollars into new highway construction while our battered higher-education system remains mired in mediocrity.
Most voters thought when they approved Referendum C in 2005 that they were allocating enough new revenue to rebuild our crumbling highway network as well as restore some of the brutal cuts made in higher education during the state budget crisis.
But in fact, Ref C only lifted the revenue ceilings imposed by the 1992 Taxpayer’s Bill of Rights for a five-year period that ends in 2010. The measure did nothing to change an earlier budget rule adopted in 1991 and known as the Bird-Arveschoug amendment.
Bird-Arveschoug limits the increase in the state general fund, which provides the operating budget to most state programs, including higher education, to no more than 6 percent a year. Any general fund revenue above that limit flows first into reserve accounts and then into capital construction programs. Combined with other laws, the result has been to pour an extra $272 million this year into transportation. Higher education had to settle for a $52 million increase because it had to compete with K-12, Medicaid, prisons and other programs within the 6 percent limit, which amounted to $401 million in this year’s $7.1 billion general fund. (For a fine analysis of the budget, read Rich Jones’ Budget Watch report for The Bell Policy Center at thebell.org.)
Ever since TABOR’s passage in 1992, most legislators have assumed Bird-Arveschoug could not be changed because a clause of TABOR forbids weakening tax or spending limits without a vote of the people. I doubt the Colorado Supreme Court would uphold that contention, since Bird-Arveschoug is not a spending limit, only a mechanism to direct money from one purpose to another. But the Oct. 12, 1993, memo, which State Treasurer Cary Kennedy sent me, is creating a stir because it outlines the terms within Bird-Arveschoug itself under which the legislature can indisputably modify the limit: “If the General Assembly significantly restructures the method by which elementary, secondary or postsecondary education in this state is financed, the General Assembly shall examine the limitation on the level of state general fund appropriations set forth in this section and shall determine whether said limitation should be modified in light of such restructuring.”
The point is that Colorado has already made two major changes in education finance. The 2000 voter-approved Amendment 23 recast K-12 funding and the 2003 legislature repackaged the state’s support for colleges as individual vouchers to students, known as the College Opportunity Fund.
The legislature clearly has the power to use either of those changes in education funding to either raise the 6 percent Bird-Arveschoug limit or declare that the student vouchers are not subject to that limit. Neither course would change the overall state revenue or budget limits by a dime, even after TABOR rules return in 2010. But within those overall spending limits, money now going to highways could clearly be redirected to higher education. Only the political will to redirect state dollars from asphalt to ivy is lacking.
Bob Ewegen (bewegen@denverpost.com) is The Denver Post’s deputy editorial page editor.
