Colorado Votes to Roll Back Budget Cap That Has Crimped Higher-Education Spending for Years

By KARIN FISCHER

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In a closely watched election with national implications on Tuesday, Coloradans voted to temporarily roll back the state's strict budget limits, permitting lawmakers to spend an estimated $3.7-billion on state services, including higher education. With 97 percent of the ballots counted by early this morning, the referendum was passing, 52 percent to 48 percent, a margin of some 50,000 votes.

The vote was a victory for Colorado's public colleges, which among state agencies have borne the brunt of cuts required by the Taxpayer Bill of Rights, the state's constitutionally imposed spending cap. The state's financial support for higher education has declined 20 percent since 2000.

Referendum C's failure could have led some Colorado colleges to close or to consolidate, higher-education officials warned, while others could have been forced to rely almost solely on higher tuition or private fund raising for revenue increases.

"This vote is pivotal," said Pamela S. Shockley-Zalabak, chancellor of the University of Colorado at Colorado Springs. "It's a fork in the road."

The repercussions of the vote are likely to be felt far beyond Colorado. The state's Taxpayer Bill of Rights is considered a model by national antitax organizations. With at least a half-dozen states, including Arizona, Maine, Nevada, and Ohio, likely to consider ballot measures next fall to impose similar revenue caps, conservative activists have worried that any move to amend Colorado's law could undermine their efforts.

The passage of Referendum C could be seen as a "vote of no confidence" in the Taxpayer Bill of Rights, said John Andrews, a former president of the Colorado Senate and a fellow at the Claremont Institute, a conservative research organization in Claremont, Calif.

College leaders in other states also had been watching the vote closely, concerned that approval of strict spending limits in their states could squeeze the budgets of public colleges. Higher education is often one of the areas lawmakers look to trim first when closing budget gaps.

Under the Colorado law, which was passed in 1992, if state revenue does not meet expectations, then spending is capped at a lower level, and the base used for calculating the next year's spending limit is likewise reduced. Some observers say that mechanism exacerbates the impact of economic downturns because spending is limited by the previous year's cap, preventing policy makers from restoring cuts made to services during hard times. The spending cap has dropped in at least three years.

The referendum suspends the spending limits for five years, permitting the state to keep a projected total of $3.7-billion that otherwise would have had to be refunded to taxpayers. The additional revenue will be used for education, health care, and transportation needs, as well as for pensions for firefighters and police officers.

While Referendum C does not change the formula for calculating the spending limit, it would set a new cap based on the largest amount of revenue collected in any one year from 2006 to 2010.

Also at the polls on Tuesday, Colorado voters appeared to reject a companion measure, Referendum D, to allow the state to issue $2.1-billion in bonds to repair highways and bridges and to renovate and replace aging facilities at colleges and public schools. That vote was much closer than the balloting on Referendum C, however, with a margin of only 8,000 ballots between the no and yes votes. The closeness of the vote could trigger an automatic recount.

• In Colorado, Colleges Fight Anti-Tax Lobby (10/21/2005)

• Panel Calls for Probe of Ward Churchill (9/23/2005)

• Colorado's 'Noble Experiment' (7/15/2005)

• Under Fire on 2 Fronts, U. of Colorado Chief Resigns (3/18/2005)

• Inside a Free-Speech Firestorm (2/18/2005)

• Nobody Walks (6/4/2004)

• Led by Colorado, States Weigh New Approaches to Financing Colleges (3/26/2004)