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Time to cut dear old CU loose?

Denver lawyer Herbert Fenster had a surefire way to get the attention of the Long-Term Fiscal Stability Commission Wednesday – he suggested privatizing the University of Colorado’s Boulder campus and said he’s planning to file a federal lawsuit challenging the Taxpayer’s Bill of Rights.

The commission, which includes six legislators and 10 citizen members, is working to develop proposals for modernizing Colorado’s tangled financial system. Wednesday was kind of “open mike” day for the panel, as it took testimony from more than 40 witnesses about Colorado’s fiscal structure and history, programs to cut and programs to save and lots of other issues.

Much of the testimony was predictable, based on the affiliations of witnesses, and some of it wasn’t particularly relevant to the commission’s task.

Fenster’s turn at the witness table didn’t come until after 4 p.m., and he got the commission’s attention immediately when he said, “I’m here to advocate today for the privatization of the University of Colorado’s campus at Boulder.”

After explaining his reasons for putting CU out of state government, he popped another surprise by announcing that this fall he plans to file a federal lawsuit challenging TABOR on the grounds that it violates the U.S. Constitution’s guarantee that states have a republican (meaning representative) form of government and that various legislature fund transfers forced by TABOR violate a federal false claims law.

Asked by Sen. John Morse, D-Colorado Springs, whom he’s representing, Fenster said, “I cannot name for you at this time the plaintiffs. There will be several, including some state legislators.”

Most the discussion, though, focused on his plan for CU.

Fenster argued the campus is underdeveloped, can’t successfully compete for students and is undersized by 10,000 students, especially in its graduate schools.

“The University of Colorado is one of the least performing, most archaic, most dysfunctional” public universities outside the Deep South, he said.

“There is no better candidate in the U.S. than that campus … it would gain enormously from privatization.”

Fenster suggested that the campus could be privatized in phases, starting with conversion into a public authority, as already has been done with CU’s University Hospital in Aurora. The university could end up as a state-chartered institution (like Cornell University in New York, he said) with guarantees of access and cost built in for Colorado residents.

Commission members asked about how the university would be governed. (CU and its board of regents were established by the state constitution.) Saying he’s not a supporter of elected university boards, Fenster said, “Ideally you would not have an elected board of regents.”

“There’s got to be some mechanism that protects accessibility and affordability,” said panel member Shawn Conway, a Weld County commissioner.

(Only about 7 percent of CU’s budget comes from state tax revenues now, perhaps meaning few savings if the state did privatize Boulder. Some higher ed leaders, including CU’s Bruce Benson, pushed a bill last spring that would have allowed colleges to set their own tuition rates and control financial aid. But legislators had no stomach for that, and the idea quickly died after virtually no public debate.)

(Fenster is senior counsel at McKenna, Long and Aldridge, a Denver and Washington, D.C., law firm.)

(According to his biography on the firm website, Fenster has various connections with CU. According to past news reports, Fenster represented then-Interior Secretary Gale Norton for a time in the long-running Indian royalty claims lawsuit and in 1998 won a $3.8 billion judgment against the federal government on behalf of General Dynamics and McDonnell Douglas.)

“I thank you very much for your interesting testimony,” deadpanned Rep. Mark Ferrandino, D-Denver, vice chair of the commission, moving on to yet another speaker.

The rest of the day, quite frankly, wasn’t quite as interesting. Here are some snippets:

Former CU President Hank Brown: “Colorado is in a huge state of financial crisis of enormous proportions.” But, Brown suggested an oddly small-change group of possible savings, like putting more students on work-study so universities wouldn’t need so many employees, eliminating the unpaid Colorado Commission on Higher Education and having the lieutenant governor also head a state agency, saving one executive’s salary.

Former state Sen. Norma Anderson: Always good for a snappy line, the tax and finance expert said, “You have so many exemptions from sales taxes it’s a crime.” Referring to the defeat last fall of Referendum O, which would have made it harder to put proposed constitutional amendments on the ballot, she advised, “I would put the same thing on the ballot every year just like Doug Bruce put TABOR on the ballot every year” until it passed.

Former Winter Park CEO Jerry Groswald: Colorado’s constitution has taken “the law of unintended consequences beyond what anybody could image,” said Groswald, who has been active in recent University of Denver government reform studies. “In Colorado we have fallen prey to bumper-sticker politics,” adding that voters “are largely uninformed or misinformed when they go to the ballot box on any fiscal issue.”

Mike Krause, criminal justice expert at the Independence Institute: Growing prison budgets are “an irresponsible spending spree.”

Jeffrey Zax, CU economics professor: Noting that even squirrels store up food but that Colorado has inadequate state reserves, he quipped, “The idea that the state of Colorado can’t do what a squirrel can do is kind of disturbing.” (Zax gave the commission a mini-econ lecture, and commissioner Jeff Coors if he could take one of the professor’s classes.)

After four meetings filled with testimony, the commission next month is supposed to start proposing ideas and discussing them.

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