TABOR’s effect on college tuition

By Mahala Proch in Front Page, News on Nov 9, 2011 3:47 / comments

Currently, Colorado is ranked 48^th in the nation by the National Center for Higher Education Management Systems in state funding for higher education. The U.S. Census has consistently reported Colorado as one of the least-funded states for education.

Colorado receives its spending budget primarily from income taxes. The Taxpayer Bill of Rights (TABOR), passed in 1992, limits increase in state spending. In a given year, if a state collects more in income taxes than it did the previous year, the difference in money is returned to the taxpayers rather than put toward the funding of other state projects. TABOR also requires voters to vote on any tax changes, a process that delays any tax change.

Jay Kaplan, a CU economics professor, explained TABOR as a formula.

“Imagine the state collects $1 billion in income taxes, and the spending limit for the next year is $1 billion,” Kaplan said. “If tax revenue falls to $900 million, then the state can’t collect over that amount the next year.”

(CU Independent file/James Bradbury)

Kaplan said TABOR is meant to regulate spending and balance the state budget. With the current economy, TABOR hasn’t had this effect because tax revenues are declining. Due to this issue, one of the areas in which Colorado could use additional funding is higher education.

CU is a publicly funded university. The university collects revenue from the state and the state receives revenue through taxes. Taxpayers pay taxes based on their income. When the economy struggles, people make less money, and therefore pay less in taxes to the state. In turn, the university receives less revenue from the state. At present, CU receives 11 percent of its budget from the state of Colorado.

If the economy and income improves, tax revenue will not rise above the amount of the previous year, and there would be leftover funds to be put toward higher education. Then, tuition rates would decline.

Until this happens, tuition rates will continue to climb. CU tuition for the 2011-2012 school year for full-time, in-state students rose from $3,509 to $3,836. Many first year students were unaware of the $327 difference.

Chelsea Russell, an 18-year-old freshman sociology major from Florence, Colo., said she did not see out-of-state schools as an affordable option when she applied for college.

“Personally, I think there’s a big push for college, but it’s not possible to go to a reputable school because there haven’t been significant efforts to fund the schools,” Russell said. “If tuition rates were lower, more people could come to CU.”

Sydney Stanton, an 18-year-old freshman open-option major from Denver, said she wishes public universities were more affordable. Stanton applied for 17 scholarships, none of which she received. Part of her decision to come to CU was based on her eligibility for in-state tuition.

“I wish there was more funding for in-state students,” Stanton said. “Public education should be cheaper. It shouldn’t be such a problem to afford school.”

Kali Harris, an 18-year-old freshman film major, said she was unaware she was paying more for her education than last year’s freshman class was.

“I’ve never even heard of the TABOR bill,” Harris said. “I had no idea that tuition had raised that much since last year. I feel like these are things students should be told.”

Erika Smith, director of CU Planning, Budget and Analysis, said she sees the effects the TABOR bill has on tuition rates. Smith said that the two main ways the university receives funding are through state funding and students paying tuition.

“We are a state institution, and we do receive state funding,” Smith said. “TABOR influences how much revenue the state can get and how it’s distributed.”

Despite rising tuition rates, the admissions office shows that admission rates are rising. This year’s freshman class is the biggest CU has ever seen at 5,600 students.

“TABOR won’t be brought up much until the economy improves,” Kaplan said. “The U.S. economy probably still has a few years until that happens.”

Contact CU Independent writer Mahala Proch at Mahala.proch@colorado.edu