WESTERN SKIES - October 25, 2005

*** BROWN HOLTZMAN DEBATE ***

STEPHEN RAHER: One of the unique aspects of the debate over Referenda C and D is that it's not a strictly partisan argument. C and D were written in a compromise between statehouse Democrats and the Republican governor. And, since being put on the ballot, the arguments for and against C and D that have generated the most sparks have been within the Republican party.

We'll close our show on C and D with one of those debates. This one, sponsored by the El Paso County Republican Women, pitted former Senator Hank Brown, now president of the University of Colorado, against Marc Holtzman, a venture capitalist who served for five years in Governor Bill Owens' cabinet. Holtzman is currently running for governor himself. Eric Whitney has our coverage.

[sound of lunch at Guiseppie's restaurant in Colorado Springs]

ERIC WHITNEY: Brown and Holtzman faced off in front of a lunchtime crowd in Colorado Springs. Hank Brown argued in favor of C and D.

HANK BROWN: What we're looking at is eliminating support for higher education.

WHITNEY: Describing himself as the most fiscally conservative Senator Colorado has ever sent to Washington, Brown said it felt strange to find himself arguing for more government spending. But, as president of CU, Brown says he has real worries if Referendum C doesn't pass.

BROWN: When I served in the state Senate, we had twenty-six and a half percent of the state budget that went to higher education. By 1990, when you sent me to the U.S. Senate, we were down to twenty percent of the state budget went to higher education. Today, we're at nine-point-six percent for the state budget. If C does not pass, I've said you will see every penny that goes to higher education eliminated within the decade. And I noticed Brad Young, a Republican former chairman of the Joint Budget Committee, indicated he thought I was wrong, that it would be five years.

WHITNEY: Marc Holtzman has some experience in higher education himself, although on the private side, having served as the president of the University of Denver for three years. He says he has a plan that would allow continued state funding of higher education without Referenda C and D.

MARC HOLTZMAN: The state of Colorado has an asset today called the tobacco settlement. It's worth over one-point-four billion dollars at present value calculation. I believe that, as a rainy day fund, that if we did have a budget challenge next year and the year after, and I look at the numbers after year two looking into the future, and we're going to be just fine, then we can securitize that tobacco settlement. And there are a lot of reasons financially why we ought to do it now any way.

The settlement itself is linked to the health of our population. Colorado, thankfully, is leading the nation in people quitting smoking. In a perverse financial sense, this means that as we go forward, even the present value today of that tobacco settlement will become less and less for each year in the future that we don't securitize that asset today. I have a lot of other ideas, such as securitizing non-historic state buildings, and I want to be very careful to say non-historic. Bottom line is this, we can do better, a government that's grown from ten billion to fifteen billion dollars in five short years, has grown enough.

I, more than anyone, am sensitive to higher education. I don't want to see tuition increases, in fact as governor, I would look into freezing tuition increases in Colorado. We can make a difference, we can get by on resources that we have, and we can do it creatively and effectively without having to resort to the five billion dollar tax grab that would be represented by C and D.

WHITNEY: Hank Brown.

BROWN: The problem, I think, with selling off the tobacco settlement, is what you do is reduce future revenue and future income. It's not a gimmie, it's no magic. If you end up selling it, what you do is reduce future revenue to have short-time money. What we need is something that puts us in the reasonable ballpark.

WHITNEY: Brown argued that Referendum C is reasonable because it essentially fixes the so-called ratchet effect of TABOR, and then goes away after five years. The ratchet effect happens when an economic recession pares the state budget back sharply, and then TABOR restrictions won't allow it to recover to match new growth in population and cost of living, which was the measure's original formula for keeping government spending in check.

BROWN: So basically, C is pretty close to what we would have if you hadn't had that drop in revenue. Now, is it exactly there? No, as Marc points out, it's an estimate. But basically, if C passes, it puts us back into the plane where we've maintained cost of living plus growth in numbers. It makes up for the dip that we went through, because the way TABOR is run, it ratchets it down. That's the problem we've got to correct and it sounds like Marc and I agree that that ought to be addressed. C addresses that, but not permanently. Is there a better solution? Sure, but let me just emphasize something: we've got a budget to put together for next year. These long term solutions are wonderful, but somehow we have to deal with a cut of twenty-five percent in state aid that is going to happen if C doesn't pass. And of roughly eight hundred to a thousand dollar tuition increase that students will have on their plate, from the community colleges on up. And that doesn't wait long term solutions, that's on the plate immediately.

HOLTZMAN: I believe very strongly that this is bad public policy, that C and D are bad for Colorado.

WHITNEY: Marc Holtzman countered Hank Brown's argument that selling the tobacco settlement is at best a short term fix by firing back that, long-term, Referenda C and D will make things worse.

HOLTZMAN: It's a blank check. There's no upward limit of what the government can keep of the projected surplus. Now, some people think the surplus is going to be three-point-seven billion. Some people think it could be substantially higher. The point is, if you give government a blank check, you can always be sure that it will be used and it will be used to grow government and to institutionalize bureaucracy.

WHITNEY: Brown addressed the "blank check" fear that many Republicans have when he took questions from the audience at the end of the debate.

BROWN (re-reading question): "Hank, how can you guarantee us that the money that comes in from C is going to be used for the good purposes you've outlined?" And the reality is, I can't guarantee that. The reality is that the legislature will have the ability to decide where the best use of those funds are. The question was, "What do the Democrats have in mind?" I think they spelled out, both publicly and in writing, that they're talking about education and healthcare and you've got several things. But they haven't laid out specifically how it would go. If D passes, some of it would go to highways in those other areas as well that you're borrowing for. A little of that is higher education, but I think your point is whether or not we're absolutely guaranteed where the money would go, that we can't guarantee it. And that's a valid point, we can't guarantee it. My sense is, though, that you're going to have a major portion of it used for good things. And that's partly because some of the cuts have been so dramatic in these other areas, that I think that their cases are very strong, but your other point's sound.

WHITNEY: Although many who came to the GOP-organized debate wore buttons showing support for C and D, it's clear that Republicans in general are uncomfortable with the idea of a Democrat-controlled legislature having more money to spend. Of course, the Democratic majority could be overturned in the 2006 elections, but Marc Holtzman worries Republicans won't win the statehouse back if they come out in favor of C and D.

HOLTZMAN: There is a reason why we are the minority party in the Colorado legislature in both chambers. There is a reason why Ken Salazar is the United State Senator from Colorado, elected last year. And there is a reason why we lost that Congressional seat in Western Colorado. I submit to you that if we as a party, lose touch with our core beliefs, our principles, our values, who we are, why we are different than the other side; then we don't deserve the opportunity to govern Colorado. And I suggest to you that you in this room today, have it within your power to send a powerful message that we are the party of smaller, more efficient government and lower taxes. We are the party of efficiency, and we are the party of George W. Bush, of compassionate conservative, and we do believe that it is the right of every youngster and student in this state to study and to have the option of affordable public higher education, and a whole lot of other things, and we can do it, we can meet these challenges. We can do it without this five billion dollar blank check, and I strongly, again, urge you to defeat C and D.

BROWN: One last point.

WHITNEY: Hank Brown argued that Republicans should back C and D because their party is about giving people opportunity to better their circumstances. The steep tuition increases that he says are sure to come if Referendum C fails, would mean fewer people could afford college.

BROWN: Marc indicates this will be higher taxes, or at least less in the way of rebates of tax revenues. He's right, it will be. The question we've got to decide is if that small amount of money, each year by all of us, is worth it to give young people an opportunity. To me, that's the core of what Republicans are all about, not buying people off, not guaranteeing outcomes, but, by golly, giving somebody who's willing to roll up their sleeves and work hard and commit themselves to make their life better, to give them a chance. And that's what I think is at stake. Thank you.

WHITNEY: Polls suggest that Coloradoans are fairly even split on whether to pass Referenda C and D. Which way Republicans decide to vote could very well be the deciding factor.

For Western Skies, I'm Eric Whitney.

RAHER: And that wraps up this edition of Western Skies. Eric Whitney is the producer, Delaney Utterback is our IT Wrangler, Molly Adams helps with production and Lindsey Patterson assists with our website. I'm Stephen Raher, thanks for listening.