OSU trustees vote to oppose TEL amendment
The Ohio State University Board of Trustees today passed a resolution in opposition to the Tax Expenditure Limitation (TEL) amendment to the Ohio Constitution, slated for the Nov. 8 statewide ballot.
The resolution states, "The Board of Trustees opposes the sweeping and inflexible language the TEL amendment proposes to embed in the Ohio Constitution because it would severely undermine the university's abilities to serve the best interests of the people of Ohio."
The TEL amendment seeks to limit state and local government annual spending growth to 3.5 percent or the sum of the rate of inflation plus population growth.
"The amendment's rigid spending formula and controls on spending from most sources of revenue, locked into the state's constitution, would damage Ohio's ability to fund public higher education," said Ohio State President Karen A. Holbrook. "The amendment could severely impair our ability to meet the goals of the university's Academic Plan and to continue rising in the ranks of the nation's premier universities. Ohio State has been making great progress, and we need to maintain the momentum."
The board's Fiscal Affairs Committee was briefed on the TEL's potential consequences by William J. Shkurti, senior vice president for business and finance, and Jack Hershey, assistant vice president for government relations, who both have extensive experience with state budgets. They outlined the proposed amendment's potential impact to Ohio State, including:
- TEL will most likely dramatically cut, if not completely eliminate, the university's state support over the next 10-20 years.
- The university, which is an instrumentality of the state, will be part of the overall state spending cap, meaning that if spending in some areas of the state budget (e.g. Medicaid) must increase, higher education spending may well decrease.
- Areas of the university that receive no taxpayer dollars (such as athletics and residence halls) would be affected by the cap because it applies to "taxes, licenses, permits, fees, or sales."
- Unspent university funds could be raided at the end of each fiscal year, half to be returned to taxpayers, the other half placed in a state budget reserve fund.
- Under the amendment, taxpayers may sue the state to force compliance with TEL if they feel that the university has interpreted it incorrectly, which could put numerous university programs in limbo while waiting for the outcome of potentially lengthy legal battles.
- The amendment does not exempt capital funds, straining the state's ability to provide capital funds and the university's ability to make capital improvements within the limitations of the spending cap.
A similar amendment in Colorado drastically reduced funding over a period of years to the University of Colorado and the state's other public colleges and universities. It subsequently was suspended for five years by popular vote.
###The Ohio State University
May 5, 2006
Board of Trustees
OPPOSITION TO THE TEL AMENDMENT TO THE OHIO CONSTITUTION
WHEREAS the Citizens for Tax Reform are advocating for a proposal to amend the Ohio
Constitution to institute a tax and expenditure limitation (TEL) that would seek to cap public higher education spending; and
WHEREAS State colleges and universities consistently work to keep costs down, and have already cut over $300 million in expenses, as detailed in the Ohio Board of Regents Results Through Productivity Report; and
WHEREAS the Board is aware of the damage inflicted upon vital public services in the State of Colorado, in particular the substantial disinvestment in that state's higher education system, by the tax and expenditure limitation measure in effect since 1992; and
WHEREAS the amendment's arbitrary spending limits, which would be locked into the State's
Constitution, would reduce the State's ability to fund public higher education, as has been the
case in Colorado; and
WHEREAS the amendment would severely impair our ability to meet the goals of the Academic Plan, even with the University's own resources; and
WHEREAS the amendment would directly affect the University's ability to maintain the current student experience by limiting spending in areas such as University housing, campus dining,student financial aid, recreational sports, and campus safety programs, as well as possibly limiting the current number of available course offerings; and
WHEREAS the amendment would be detrimental to our efforts to recruit and retain the highest
quality faculty and staff, especially in competition with out-of-state institutions that don't have to operate under such a stringent spending cap; and
WHEREAS, areas of the University, such as The Ohio State University Medical Center and the Athletic Department, that operate under sound business models and consume very little, if any, state funding would be restricted by the spending cap; and
WHEREAS, the amendment's effects on the State's primary and secondary education system would harm its ability to adequately provide Ohio school children with the skills needed to earn a
post-secondary degree; and
WHEREAS, the amendment's effects on our local counties, cities, and townships would seriously
impair their efforts to deliver quality, basic public services, and thus make it more difficult for the state to attract the businesses and high-paying jobs needed to keep the University's graduates in the State of Ohio:
NOW THEREFORE
BE IT RESOLVED, That the Board of Trustees opposes the sweeping and inflexible language the
TEL amendment proposes to embed in the Ohio Constitution because it would severely
undermine the University's abilities to serve the best interests of the People of Ohio.
BE IT FURTHER RESOLVED, That the Board encourages the University leadership to take the appropriate steps necessary to inform the University community about the effects of the TEL amendment.
