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Thursday, September 29, 2005

C (and D) The Inefficiency

Through all of the national coverage of Katrina, Rita and DeLay one might hear a still small whisper of the state and local hot topics as related to the November ballot. Perhaps its during your favorite soap opera or during the early edition of the local news, but lately all I've seemed to notice are the nagging commercials about Referendum C & D. Both sides seem to have "broken the bank" in regard to spending the most on their campaign. So in order to put the issue to rest, I decided to look at it from the normative framework of our class.

Please keep in mind that this posting is viewed from the Economics and Government portion of class and will primarily look at the issue of funding regarding the allocation of funds proposed in these referendum.

Strikingly similar to our discussion in class regarding "Euphoria Higher Education," is the underlying theme to Referendum C & D. These referendum, in short, would reallocate funding from TABOR and allow for bonding against said funds. One of the areas proposed to gain in the area of reallocated funds are the "K-12 schools and the Community and State Colleges." (As directly from C & D.) This would amount to a total of 30% each. However, it is not the percentage of, or direct numbers that concern me, but the idea that it is specifically outlined to PUBLIC institutions of higher learning. This sets forth flawed (and most likely partisan) reasoning.

Th0ugh the area may be gray for class purposes, for my bolg contribution I will express my individualistic ethic in suggesting that there is not a positive externality regarding higher education. That said, government should not be subsidising colleges or universities in any respect. We have allowed for the subsidising of a "good" that does not fit with the model.
If we were to say that higher education did specifically contribute in terms of a positive externality, these referendum only speak to the increase of funding regarding the public institutions. Wouldn't the effect of the positive externality be universal to that of higher education? Shouldn't both the Public and Private institutions benefit financially from the perceived positive externality of higher education. And if the positive externality were greater from the private institutions, wouldn't they inherently receive more funding?

Political affiliation set aside it would seem to me that in an attempt to "reallocate" Colorado's taxpayer funding, these referendum do NOT classify as a pareto optimal improvement. If anything the separation of public/private institutional funding seems like a significant step back in the progression to efficiency.

Yes on C&D
No on C&D

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