REUTEMAN: Oilman can grease skids for funding of education

By Rob Reuteman, Rocky Mountain News (Contact)

Saturday, February 9, 2008

If the public face of higher education in Colorado becomes that of an oilman, a successful ballot initiative to raise the state's severance tax looks a little less daunting.

State Sen. Chris Romer, D-Denver, hit the nail on the head Tuesday when he said, "As an oil-gas man, who better than Bruce Benson to convince the oil and gas industry to raise their taxes . . . and to invest that $300 million into making Colorado the best state in the nation for math and science and technology?"

If you think in those terms, Benson's presidential candidacy for the University of Colorado makes much more sense. What is the biggest problem facing CU and higher education in Colorado? Is it tenure, which Benson has questioned in the past? Is it academic freedom, which his critics see threatened? No, it's money - hundreds of millions of dollars.

Talking to a Rocky reporter this week, Benson cited a study by the National Center for Higher Education Management Systems that says CU is "$830 million short of our peers. I'm always suspicious of things like that. But let's say it's $700 million. It's a big number."

Benson has been an oil and gas man for more than 40 years, but for more than 30 years he's intertwined his business career with equally successful efforts to raise money for education. This would clearly be his biggest challenge; indeed, Gov. Bill Ritter sees it as Colorado's biggest challenge. As Denver Metro Chamber head Joe Blake told me Thursday: "Bruce is passionate about the issues he cares about. Fortunately, education has been at the top of that list.

"It's a little premature to talk about a severance-tax campaign until we see a definitive proposal," added Blake, who co-chaired the fight for Referendum C and D with Benson in 2005. "But if it comes to pass, Bruce would be the man to help us get it over the finish line."

Much has been made of Benson's fundraising prowess, and, sure, he'll cajole prospective CU donors and twist arms for $500,000 here, even a few million there. But that's small potatoes compared with the permanent solution that might be provided by a 2 percent to 3 percent increase in taxes paid by the companies that extract oil and gas in Colorado.

Last year, the nonpartisan and well-regarded Colorado Legislative Council did a study of oil and gas taxes here and in neighboring states. The overall tax rate on oil and natural gas producers in Colorado, they found, is 5.7 percent of production value. Taking into account the various taxes charged, that compares with 11.2 percent in Wyoming and 9.4 percent in New Mexico. Only Utah, at 4.5 percent, has a lower tax burden for drilling than Colorado.

The Rocky reported Thursday that state Rep. Kathleen Curry, D-Gunnison, is working with Ritter and others on a bill that would raise severance taxes by 2 percent to 3 percent. That seems a modest proposal that still would leave our tax rate on oil and gas lower than that of other Western states. And it's estimated to bring in an additional $160 million to $300 million annually.

In California last year, the oil and gas industry spent $60 million to kill a proposal to raise severance taxes that was backed by Gov. Arnold Schwarzenegger. Something similar would happen here unless the industry bends.

"If he (Ritter) tries to cram it down, it's going to lose," Benson said this week.

Blake said, "Oil and gas is loading up to fight this thing tooth and nail."

It's highly unlikely anyone is going to steamroll the oil and gas industry into doing something it's dead set against. Political consultant Floyd Ciruli told me Thursday: "With Benson heading CU, it would make him a more effective advocate for oil and gas doing the right thing, making an investment that benefits them. His visibility as a person in the industry makes the arguments against such a tax increase much less credible."

I agree. Benson may be the best man to get it done. After all, it takes one to know one.

Business editor Rob Reuteman was awarded a master's degree in journalism from the University of Colorado at Boulder in 1978. He can be reached at reutemanr@RockyMountainNews.com. Add your comments to this column at RockyMountainNews.com/ news/business/.

• February 11, 2008

  9:29 a.m.

  Suggest removal

  rreute writes:

  Institutional Memory is Wonderful! The Only Problem is that One Has to Have Enough of It!
  I'd be the first to admit, "I have a very Low Level of Trust!"
  Secondly, The terms that I think in...include "long-term, geo-political analysis" combined with "psychology of the Gestalt"...in looking both at the past and into the Future. What I come up with is far from where you are and far different from your analysis report in your Saturday's column--I.e, that "Bruce Benson would/could help Colorado get an increase in the state severence tax on oil and gas that would then benefit Higher Education in Colorado if he, Benson, were President of CU. That's a complete bunch of hog wash in my opinion!
  
  "Fool me once shame on You. Fool me twice, shame on Me for letting You!"
  
  Sen. Chris Romer's "loose, brain-storming" with it's Lack of Reality Testing and his forgetfulness of some past major political policy decisions is astounding! He forgets decisions made by former Gov. Bill Owens who on his first day in office took out his pen and with an executive order practically destroyed all of the oil gas severence taxes here in Colorado! Who benefitted from that? Bruce Benson and the oil-gas industry!
  
  George Pramenko

• February 11, 2008

  9:37 a.m.

  Suggest removal

  rreute writes:

  Mr. Reuteman,
  Although both of us have ties to CU, our perspectives on Benson are a little different. Your column is thoughtful and makes sense, as always. However, I know what it does to faculty morale--been there done that--when a president is picked for the wrong reasons and without academic credentials, etc. Nevertheless, I thought your points made good economic sense and maybe more than that.
  Richard Crawford