Amendment 58: Help colleges by helping students

(09-08-2008)

Opinion by Dr. David Svaldi, president of Adams State College

Colorado has heard its wake-up call. Budget cuts earlier this decade, exacerbated by TABOR restrictions, took a particular toll on higher education. A 2006 study found Colorado's colleges were short $800 million, on average, compared to their peers in other states. Last year Colorado slipped to 49th place in the nation for per capita higher ed funding. It's been a struggle to repair that damage, but Colorado is seeking solutions.

Finally this year, Colorado's higher ed budget increased 9 percent. The legislature also passed measures to shore up deficiencies in capital construction funds for Colorado's campuses. But we still haven't regained ground lost in the early 2000s.

In November the state's voters will consider another proposal to aid its colleges and universities: Amendment 58. If passed, the measure will eliminate a tax credit for large oil and gas companies and use 60 percent of the proceeds to create the Colorado Promise Scholarship. The remaining funds would support renewable energy projects, wildlife habitat, and water quality and transportation projects in communities where oil and gas producers operate.

The Colorado Promise Scholarship aims to roughly double need-based aid for low and middle-income students. It would benefit about two-thirds of Colorado families, those earning up to $100,000 annual adjusted gross income. If the amendment is passed, the new scholarships would be available next fall to resident students attending Colorado's public colleges and universities.

The tax credit in question was enacted in the late 1970s to foster the state's energy industry. The credit allows energy companies to subtract 87.5 percent - roughly $300 million a year - of their property tax bills from the severance taxes they owe on oil and gas extracted in the state.

Amendment 58 supporters say the tax credit is no longer necessary, and the state must make investments to assure a competitive economy and livable environment once the current rush on oil and gas dissipates. The measure would also exempt all of the oil and gas severance tax revenue from TABOR restrictions.

The measure was introduced by A Smarter Colorado, whose spokesman, George Merritt, said, "They (Big Oil) just had the most profitable quarter in the history of the world ... Colorado taxpayers don't need to be subsidizing this industry that made $50 billion in the last three months."

Colorado produced $6.63 billion of oil and gas last year, according to the Consumer Federation of America, or about 6.2 percent of total U.S. production. Coloradans for a Stable Economy, heavily funded by oil and gas, opposes the measure. They are joined by regional organizations Club 20 on the Western Slope, Action 22 in southern Colorado, and the Denver Metro Club, as well as the Denver Chamber of Commerce. Commissioners in Weld County, home to most of the state's oil and gas wells, also oppose the measure, fearing loss of jobs and revenue.

These opponents say eliminating the tax credit would hurt the Colorado economy and increase gas prices. Both the Consumer Federation of America and the Sonoran Institute dispute this claim, saying Colorado produces too little oil to impact the worldwide price. America produces only about 10 percent of the total world oil supply; Colorado accounts for about 0.13 percent. Amendment 58 supporters say even without the subsidy, the oil and gas industry will still pay lower taxes in Colorado than in some neighboring states.

In fact, Colorado's economy is doing very well these days. The Milken Institute, an independent think tank, recently ranked Colorado No. 3 in the country for its strong technology sector, citing a highly educated workforce.

Ironically, most of the state's highly educated residents are transplants, while relatively few of its own high school graduates finish college. Called the Colorado Paradox, this is a pattern we're working to change. We especially need to do a better job of educating Colorado's growing Hispanic population, of which only slightly more than 12 percent has completed college.

Amendment opponents also argue tuition increases would negate the scholarship, but that's not occurred in other states with similar scholarships.

Coloradans for a Stable Economy spokesman, Dan Hopkins, makes the point that "None of the money goes toward operating expenses at the universities."

While this is true - state trends focus on helping students, rather than the institutions directly - more scholarships can only be a good thing. Making college more affordable allows more students to attend, which is good for a college's bottom line and, ultimately for Colorado's economy.