Colo lawmakers turn to philanthropy for budget

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Stung by declining revenue and facing a state budget cliff over the next few years, Colorado lawmakers are increasingly turning to philanthropists, hoping someone will bail them out.

The practice has become so pervasive, Gov. Bill Ritter signed a law this year that requires gifts, grants and donations be listed as part of the state budget process.

According to records compiled by the state controller and obtained by The Associated Press, state agencies have collected $801 million in gifts, grants and donations over the past five years.

The biggest recipients have been colleges and universities, which have relied on grants and donations for decades. Over the past five years, $637,000 has been doled out to the governor’s office. The state charter school for the deaf and blind got $675,000 for its programs.

Other bills relying on gifts, grants and donations this year include new teacher evaluations, repairing the crumbling state Capitol dome, home health care, a supplemental nutrition program, quality child care incentives, hospice care for people with less than six months to live and a trust fund for military veterans.

Lawmakers are concerned because outside funding dropped substantially last year, from $196 million in the 2007-2008 fiscal year to $183 million in the last fiscal year.

Much of the funding comes from the federal government through grants, but other programs rely on the generosity of philanthropists for gifts and donations.

Lawmakers were concerned this year when Catholic charities volunteered to pay the costs of a task force to study the plight of sheepherders and recommend legislation. The bill was killed, in part over concerns that sponsors might have their own agendas that could influence the study.

Lawmakers say it’s unseemly for the state to rely on philanthropists and ask for handouts to fund state programs, but it’s the only way they can balance the budget at a time when state revenues are still in a tailspin.

They also create potential conflicts of interests with sponsors.

“What if Focus on the Family, a religious group, wants to sponsor a bill? There would be a lot of screaming about that. But who is funding our government programs? We don’t know. If the Children’s Campaign gives money for a committee for children, what kind of bill would the committee be sponsoring? Because of our funding crisis, we have an obligation to ensure we aren’t reverting to special interest state government,” said Rep. Amy Stephens, a Republican from Monument.

The law she sponsored requires the state to track all bills funded by philanthropists and get written guarantees. Any program that fails to get funding after two years would be discontinued. An annual accounting to lawmakers is also required.

Rep. Kent Lambert, a Republican from Colorado Springs, said the state often gets stuck with the tab when well-intentioned programs lose their outside funding and they come back to lawmakers asking taxpayers to take it over. Lawmakers have begun demanding guarantees in bills that rely on outside funding that people won’t come back to the state if they can’t raise the money.

“It’s classic bait and switch,” Lambert said.

University of Colorado economics professor Barry Poulson said increasing reliance on one-time funding for ongoing programs is a mistake. He said such funding often comes with strings attached, especially programs funded by federal grants.

“If it comes with strings, that should be a red flag,” he said.

Former Colorado Gov. Dick Lamm said gifts, grants and donations could be used to supplement the state budget, but they should not be used to provide basic services.

“Those funds should not be a fundamental part of any program. The state should pay for basic programs,” he said.

– Associated Press