Colorado voters may be asked to expand gambling to aid state colleges
The Denver Post
Coloradans may get a chance to vote this fall on an expansion of limited gambling to help fund the state’s universities.
The proposal, which has bipartisan backing in the legislature but may face opposition, will be considered with a second bill also unveiled Wednesday. That second bill would allow colleges and universities to increase tuition by a larger amount than now allowed, as long as they also provide more financial aid to low-income and middle-income students and meet other goals.
Out of places to turn for revenue and facing $300 million in cuts to colleges starting July 1, 2011, lawmakers pushing both proposals predict drastic changes to the face of Colorado higher education as a result of the state’s multiyear budget crisis.
Sen. Chris Romer, D-Denver, estimated the plan for video keno games in bars and restaurants across the state would generate $20 million in its first year and as much as $100 million a year within a decade if it proved popular.
The estimate is based on results in Oregon and Maryland, states that have keno, similar to a lottery in which players bet on numbers and hope they are selected by a computer.
Romer said the state is backed into a corner when it comes to college funding.
“This is a painful choice, and it’s something we would not do if we had another choice,” Romer said. “We need to think of creative ways to keep higher education affordable.”
The state provides $104 million in aid to higher education mostly through need-based and work-study programs.
Some states fall short
But not every state that’s implemented keno has done so well. Senate majority staffers calculate the earnings in Massachusetts to be about $2 per resident, which would translate to about $10 million in Colorado.
Before the proposal goes to voters, it has a tough road getting through the Capitol, where it will need approval from two- thirds of the legislature.
Sen. Abel Tapia, D-Pueblo, who already sees opponents lining up, said some will argue that gambling burdens the poor disproportionately.
Chris Watney, president of the Colorado Children’s Campaign, hadn’t seen the resolution and declined to voice support or opposition.
“There are implications on poverty and also implications on kids having access to school,” she said. “So it’s something we’ll certainly need to consider.”
Tapia also has heard worries that keno will detract from casino gambling – which helps fund community colleges – or detract from lottery revenues of games already in place.
The Colorado Lottery generated $119.6 million in proceeds for the state in fiscal 2008-09 on sales of $493.4 million, according to the annual report. The biggest chunk goes to parks group Great Outdoors Colorado, which also declined to comment until its staff reviews the legislation.
Tapia pointed out that gambling is voluntary and said he’s confident that keno won’t take away from current lottery games because it appeals to a different market.
“We hope it is another revenue stream for the state,” he said. “The idea of asking for a tax on income or sales tax just isn’t being considered right now. It’s so politically taboo to go there.”
At least 25 states have turned to lottery proceeds to fund their education systems, with at least five dedicating a portion to pay for tuition, a 2006 study by the North American Association of State and Provincial Lotteries shows.
With higher education funding facing cuts in 42 states, only Colorado is considering an expansion of gambling this year, according to information from the National Conference of State Legislatures.
Record tuition hikes
Instead, states are imposing unprecedented tuition hikes across the country, said NCSL education policy specialist Brenda Bautsch, pointing to up to 20 percent increases in both Arizona and California.
In a series of budget reductions in Colorado, lawmakers cut $377 million from higher education’s coffers, floating colleges and universities on federal stimulus money.
But that runs out in fiscal 2011-12, and lawmakers predict the institutions will need to cut costs, raise tuition and possibly benefit from keno-funded scholarships to make up a $300 million shortfall.
Keno alone won’t fill that void – or even come close – but a proposal by Senate Majority Leader John Morse, D-Colorado Springs, and Minority Leader Josh Penry, R-Grand Junction, could help close the gap.
Under their Senate Bill 3, schools would issue five-year plans showing how they would handle anywhere from a 25 percent to a 100 percent cut of their state subsidies. They also would set goals for accessibility, matriculation and graduation, among other benchmarks.
In return for meeting those goals, they could raise tuition beyond the 9 percent limit currently in law.
This legislative session is the last chance lawmakers have to prepare colleges for the loss of federal stimulus money, Morse said, noting that some still hope for an extension of those funds.
“But that’s a hope and a prayer. What we need is a plan,” he said. “This crisis is forcing us to be more strategic with out dollars and make sure we provide access.”
College presidents got their first glimpse at the plan Wednesday but said they weren’t certain how much they would – or could – raise tuition before students and parents began looking elsewhere.
Schools that accept all comers – especially nontraditional students – are among the least likely to take advantage of the expanded ability to inflate their price tags, said Stephen Jordan, president of Metropolitan State College of Denver.
They’re also among the schools that receive the largest chunk of their budgets from the state.
“It’s different for colleges that serve really low-income students,” Jordan said. “(The University of Colorado) might be able to do it, I don’t know.”
Jessica Fender: 303-954-1244 or email@example.com