The Long-Term Fiscal Stability Commission Wednesday came up with some additions to the 2010 legislature’s already heavy burden of financial issues.

Sen. Rollie Heath, D-Boulder, (left) and Rep. Mark Ferrandino, D-Denver, at the final meeting of Longterm Fiscal Stability Commission on Nov. 4, 2009.
Sen. Rollie Heath, D-Boulder, (left) and Rep. Mark Ferrandino, D-Denver, at the final meeting of Longterm Fiscal Stability Commission on Nov. 4, 2009.

The commission recommended measures to give state colleges and universities more financial flexibility (but not power to set tuition), create a commission to study the fiscal provisions of the state constitution, establish a state rainy day fund and launch an outside examination of state and local taxes.

The 16-member, ideologically diverse panel was created by the 2009 legislature to examine the state’s long-term fiscal condition. The bills and resolutions it recommended at its final meeting Wednesday are subject to review by the Legislative Council, which meets next week.

Given the budget crisis facing higher education, the issue of financial flexibility for colleges and universities has been expected to be on lawmakers’ 2010 agenda.

The bill proposed by the commission may provide an initial frame for that discussion, but it’s impossible to discern now the direction the debate will take. Legislation to give institutions more flexibility failed during the 2009 session.

The original draft of the bill recommended Wednesday was developed by Sen. John Morse, D-Colorado Springs, and a group of college presidents he met with recently.

“Obviously there are many other perspectives” to be heard on the issue, Morse said. “This is really the first cut at it.” He predicted that the text of the bill would be changed completely once it starts through the legislative process next year.

“The one section you will not see in the bill is tuition flexibility … the governor at this point would not permit a bill to become law that had tuition flexibility in it,” Morse explained.

Annual tuition increases now are controlled by ceilings the legislature sets. Given the steady decline in tax support for colleges and universities, many college presidents have argued that individual colleges should be able to control their own charges and financial aid, which would allow them to raise more revenue through tuition hikes and then offset the higher costs for needy students with financial aid.

Gov. Bill Ritter has said no major changes should be made in tuition policy until participants in a higher ed strategic plan have studied the issue. That process is due to kick off shortly.

After some occasionally snippy back and forth between Morse and Rep. Cheri Gerou, R-Evergreen, about what should be in the recommended bill, the panel unanimously approved a version that would:

  • Require the higher ed system to come up with common requirements for five degree programs by 2011, with additional coordination of degrees after that.
  • Allow some institutions to enroll unlimited numbers of foreign students separate from their ratios of in-state and out-of-state students.
  • Give schools the power to set their own financial aid eligibility policies.
  • Exempt colleges from state financial and information-technology rules.
  • Reduce the amount of financial data colleges have to report to the state and give colleges greater control over their own construction projects.

Dropped from the bill were provisions allowing universities to exempt new employees from state personnel rules, make it easier for retired college and university staff to return to work without affecting their PERA pensions and that would ease the rules on colleges hiring their own lawyers rather than using the attorney general’s office. Those were the subject of the Morse-Gerou debate.

Text of the proposed bill (sections 8-10, 12 and 14-16 were dropped).

After all the back and forth, commission member Cris White, COO of the Colorado Housing and Finance Authority, quipped, “Politics in action is a fascinating thing to watch.”

Several members, both legislators and citizens, expressed disappointment that tuition policy was off the table.

The commission had an equally lively debate over the proposal by panel chair Sen. Rollie Heath, D-Boulder, to create a special commission that would study and possibly propose changes in the financial provisions of the state constitution.

The complex process first would require the 2010 legislature, by a two-thirds vote, to propose the plan to voters in November 2010. The ballot proposal would create a 19-member commission with the power to study and recommend changes in financial constitutional requirements. The body would be exempt from the single-subject rule that limits the scope of ballot measures.

If the voters approve the idea, the 19-member bipartisan panel would be appointed by legislative leaders, the governor and the chief justice of the Supreme Court.

The commission’s proposal would be subject to legislative review in 2012 and go to the voters in November 2012. Lawmakers would make a recommendation on the plan but couldn’t prevent it from being placed on the ballot, nor would the commission be obligated to accept the legislature’s recommendations.

After a lengthy discussion of constitutional issues – conservative members opposed creating a third way to place amendments on the ballot – the panel passed the proposal 4-2, with majority Democrats supporting and Republicans voting no. (Text)

The third major proposal made by the committee would create a state rainy day fund equaling 15 percent of the general fund. The panel voted 5-1 to approve a version by Rep. Lois Court, D-Denver, that would take considerably longer to reach 15 percent than would have an alternative proposal by Sen. Greg Brophy, R-Wray. That was rejected 2-4.

The committee also unanimously proposed conducting a study of the state and local tax system. Also a Heath idea, the privately funded study would be done by University of Denver experts.

Otherwise, the four commission Democratic legislators killed a Gerou proposal to extend for another five years a five-year funding program for highways and state buildings that was established by the 2009 legislature.

And the committee approved a proposed bill that would make it easier for state agencies to contract with non-profit groups as a way to provide less-expensive state services.

Before the formal vote on each measure, the non-legislator members of the panel were asked informally how they would vote on each bill. (Only the six legislative members were allowed to vote formally.) In most cases the majority sentiment of the non-legislators agreed with the formal vote tallies, although it did make for a long, talky day.

The Legislative Council, the administrative panel composed of legislative leaders and some other lawmakers, meets next Tuesday to consider the bills proposed by all 2009 interim committees. The council can reject a bill if it concludes the proposal went beyond a particular interim committee’s assignment.

The commission’s proposal are expected to become part of the larger – and difficult – debates the 2010 legislature will face over cutting the state budget to meet revenue shortfalls, protecting higher education from further cuts, reducing state K-12 aid and shoring up the Public Employees’ Retirement Association.

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