Colorado Higher Ed Funding Unconstitutional

A unanimous three judge panel of the United States Court of Appeals for the 10th Circuit has held that Colorado's refusal to provide scholarships to otherwise eligible students who attend accredited Colorado colleges deemed "pervasively sectarian" is unconstitutional. The decision reverses a prior U.S. District Court ruling.

Colorado shifted a significant share of the money that it provides to higher education from direct institutional support to student based scholarships for students who attend colleges in Colorado, in order to circumvent state constitutional limitations that would otherwise treat tuitition money as a form of tax revenue subject to state constitutional revenue limitations designed to control state funding.

The program allowed students to use the scholarship money at private as well as public institutions, but did not allow it to be used at "prevasively sectarian" institutions.

Employing those criteria, the state defendants have decided to
allow students at Regis University, a Roman Catholic institution run by the
Society of Jesus, and the University of Denver, a Methodist institution, to receive state scholarships, but not students at CCU or Naropa University, a Buddhist institution.

Colorado Christian University cried foul and won, and an "appropriate remedy" will be formulated by the District Court on remand.

Colorado could seek review by an en banc panel of all the judges in the 10th Circuit, or could appeal to the U.S. Supreme Court. Neither option, however, is likely to happen before the 2008-2009 school year begins.

Earlier this year, a state trial court held that another key piece of Colorado's education funding program, for K-12 education, was invalid as a result of state constitutional violations. That program effectively reduced state funding for school districts which had TABOR waivers to allow them to collect property tax revenue increases as a result of valuation changes, which were not being fully utilized by those districts, and used the reduced state funding for other K-12 funding goals. That decision is being appealed at this time to the Colorado Supreme Court and could be rendered before the start of the new school year.

The combination of the two court defeats of TABOR driven education funding programs leaves Colorado's system of funding public education at all levels in limbo. It is still possible that a special session may need to be called to fix the mess.