Parties debate how to save higher ed

Though Senate Republicans and Democrats are headed in distinctly different directions, they managed to find some common ground Wednesday afternoon on a few budget cut possibilities.

Republicans and Democrats said the current 2009-10 budget was unacceptable because it would cut $300 million from higher education. Protecting that money was priority No. 1 because the cuts would likely result in the closing of several colleges in the state.

Just how to fill a $300 million hole is the question.

"I don't think the people of the state of Colorado get that we're in a crisis," said Sen. John Morse, D-Colorado Springs. "I hope they do now."

During a leadership meeting late Wednesday afternoon, Republicans suggested across-the-board cuts in every state department, many of which had been spared under the current budget. Democrats seemingly took the suggestion under advisement, then said they're looking at repealing various tax exemptions.

That's just one illustration of how the two parties took distinctly different approaches in how to come up with $300 million.

Republicans scoured the state budget, looking for programs that could be reduced or eliminated, and finally came up with about $240 million in cuts.

One suggestion that Senate President Peter Groff, D-Denver, said he would consider was funneling money from K-12 into higher education, which would save $100 million, a third of what the Legislature needs to find.

But then the Democrats suggested altering the tax code, and Republicans balked. For instance, Sen. Chris Romer, D-Denver, said Democrats are intent on repealing the capital gains tax exemption, which would raise $32 million. And that's just one tax increase Democrats said they are considering.

Other exemptions the Democrats pondered during their daylong caucus meeting ranged from taxes on nuclear fuel to taxes on bull semen. The approach they settled on would raise $122 million, which includes the capital gains tax exemption. The Democratic plan also would raid $60 million from a loan program run by the Colorado Water Conservation Board and raise $30 million by eliminating the state tobacco tax exemption.
The Democratic caucus agreed unanimously that any budget plan needed to rely heavily on such an approach in order to preserve as many state programs as possible and decided that the rest of the hole will likely need to be filled by tax increases.

Sen. Majority Leader Brandon Shaffer, D-Longmont, said he's reluctantly still pushing a bill that would transfer up to a half- billion dollars to the state from Pinnacol Insurance, a hybrid government-private company that was begun by the state but privatized in 2002.

Republicans claim the move would be illegal and would face an immediate lawsuit. They warned that the funds may never see the light of day if a judge freezes the cash until the case is decided. Democrats countered that there may be no other way to fill the budget hole and protect higher education, and they emphasized that the transfer could be much lower than $500 million.

Yet another difficult choice facing the Legislature is whether to institute furloughs on state workers, which members of both parties said would be hard but could be necessary.

Democrats discussed furloughs of a few days a year, while Republicans were talking about forcing state workers to take a month off, saying it would save $75 million.

"Nobody wants to talk about furloughs, but faced with the specter of closing, once and for all, these colleges that are long-standing institutions, we've got to make some tough choices," said Senate Minority Leader Josh Penry, R-Grand Junction.

While Democrats considered a "more aggressive" tax policy, in the words of Romer, the Republicans focused on slashing the current budget. Penry said the difference was "emblematic" of how the parties approach governing.

Republicans focused on smaller, less-expensive programs. Most of their proposed cuts were less than $1 million.

And members of both parties considered taking pay cuts themselves. Lawmakers are paid $30,000, plus $99 per day if they work when the Legislature is not in session.

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Contact the writer at 303-837-0697.

Gazette writer Dean Toda contributed to this report.