Ladies and Gentlemen:

I am filing with the Secretary of State Senate Bill 05-139, "Concerning statewide on-line education supplemental programs, and making an appropriation in connection therewith." I vetoed this bill as of 12:18 p.m. today, and this letter sets forth my reasons for doing so.

S.B. 139 appropriates at least $500,000 a year for the next three budget years for the Department of Education to contract with a provider of on-line supplemental courses that meets specific criteria established in the bill. The provider will make available these courses for purchase by public schools statewide.

I have been a strong and consistent supporter of online education in Colorado. As a legislator I sponsored the schools of choice legislation that became the basis for the online school movement. This legislative session I rejected attempts in the school finance act to fund online students at a level below that of bricks and mortar students and successfully fought for funding equity.

This legislation, in reality, provides inappropriately for a sole-source contract. While the criteria specified in S.B. 139 ostensibly ensures that only high quality providers are eligible, because only one provider currently could meet the requirements they really constitute a statutory sole-source contract. As such, S.B. 139 is a subsidy by the General Assembly that is intended to benefit only one provider of on-line supplemental services, to the competitive disadvantage of any other provider who would seek to provide similar on-line services in the future.

A provider that would otherwise be able to succeed in the market does not merit a government subsidy. If the General Assembly should choose to broadly subsidize on- line supplemental services for school districts there are worthwhile methods, such as a grant program directly to districts to enable them to contract with providers that best suit local students' needs. This would not interfere with the competitive marketplace for those services. The sponsor of S.B. 139 rejected such an approach.

The bill also obligates the State Education Fund for at least $1.5 million. Given that the long-term solvency of the State Education Fund is very much in doubt, programs that would unnecessarily weaken the fund must be examined closely. It is ironic that the very members of the General Assembly that have in the past opposed expenditures from the State Education Fund, have chosen during this legislative session to abandon those concerns.

Accordingly, I have vetoed this bill.

Sincerely,

Bill Owens
Governor