– JBC goes for Ritter 2010-11 plan
Updated 9 p.m. Feb. 24, 2010
The Higher Education Strategic Planning Steering Committee Wednesday agreed in concept to a proposal that would allow state colleges and universities to set their own tuition rates – subject to Colorado Commission on Higher Education review.
During a four-hour session, the panel accepted a concept proposed earlier in the week by a subcommittee. The essence of the idea is that for four years, starting in 2011-12, college and system boards would develop financial plans including tuition rates, allocation of financial aid for policies for ensuring access for middle- and lower-middle income students. The plans would have to be approved by CCHE.
Part of the new system could involve reducing direct state aid for some schools, like the University of Colorado and the School of Mines, that have greater ability to raise tuition. That would free more state money for outstate four-year colleges and community colleges, whose students are more sensitive to costs.
Department of Higher Education staff will draft the wording of the proposal by Friday. It will be circulated among steering committee members over the weekend, with their revisions due by Monday. Steering committee co-chairs Jim Lyons and Dick Monfort will approve the final version, which will go to Gov. Bill Ritter next week and to the commission at its March 5 meeting.
If the commission and Ritter approve the plan, it would go to the legislature to consider for inclusion in a higher education financial flexibility bill is being held up in the General Assembly until the executive branch weighs in.
The steering committee isn’t making any recommendations about higher education funding in 2010-11. The Joint Budget Committee already is moving ahead with a plan for next year, having voted Tuesday to accept Ritter’s proposed college-by-college allocations (see story).
See earlier story below for more details about the emerging debate on tuition at state colleges and universities.
Feb. 22 story – Allowing state colleges to set their own tuition rates, long considered off the table for the 2010 legislative session, is gaining momentum as a partial fix to higher education’s immediate financial woes.
For the last several years the legislature has set ceilings on how much state colleges and universities could increase tuition each year. The percentages have varied year to year; the ceiling for this year was about 9 percent, and the same figure is proposed for next year.
Gov. Bill Ritter has been a strong proponent of keeping tuition hikes modest, arguing that doing so was necessary to maintain college access for low- and middle-income families. As recently as last summer Ritter told lawmakers that he wouldn’t sign financial flexibility legislation for colleges if it gave tuition control to college and university boards.
Now the landscape has changed because of the ever-increasing financial pressures on higher ed and because of Ritter’s announcement that he won’t run for reelection in November.
Ritter said last week that he is open to tuition flexibility, and a higher education education advisory panel appointed by the governor is discussing this week whether to give college boards some tuition flexibility starting in the 2011-12 school year.
Tuition flexibility was the main subject of discussion Monday at a meeting of the Sustainability Subcommittee of the Higher Education Strategic Planning Steering Committee.
The subcommittee agreed to the idea of a new system that would allow governing boards to set their own tuition and financial aid policies, subject to state review, with some state tax support redirected to colleges that are less able than others to raise tuition significantly.
That idea is being refined by Department of Higher Education staff and will be discussed by the full steering committee Wednesday.
While Ritter created the steering committee and its advisory panels to develop a long-term plan for the state’s higher ed system, they also are under pressure to suggest some short-term fixes for the higher ed financial crisis.
(The state’s budget woes have forced the legislature to reduce tax support of colleges and universities, which also happened during the last recession. Higher ed overall revenue has been maintained only with tuition increases and federal stimulus funds. The federal money runs out after the 2010-11 budget year, setting higher ed for 2011-12 cuts of perhaps $100 million or more. That’s the immediate crisis state leaders are struggling with.)
Two key Senate leaders told the subcommittee Monday that action needs to be taken now.
“There’s a real desire to act this year … solving this [financial] piece of it,” said Senate Minority Leader Josh Penry, R-Grand Junction, noting the bipartisan political will is in place. “We have a real opportunity to do something … whatever it is.”
Senate Majority Leader John Morse, D-Colorado Springs, said, “We hope in the coming week you will come out with some rocket science” on the financial issue.
Morse is the prime sponsor of Senate Bill 10-003, which in its current form would give colleges and universities more flexibility in various financial procedures but not – for the moment – in tuition. The Senate has delayed hearings on the bill until after the steering committee makes its recommendations, if any.
Morse said he believes tuition flexibility is now on the table, and he supports it. “The real money [for higher ed] is in tuition flexibility” because state tax support “is going to continue to go down.”
Jim Lyons, cochair of the steering committee, said, “The key to this [financial problem] is tuition flexibility that protects access” for low- and middle-income students.
Subcommittee member Kelly Brough, agreed. “We have to provide some tuition flexibility.” Brough is president of the Denver Metro Chamber of Commerce.
Various speakers acknowledged that prospect of dramatic tuition hikes, even if only at some colleges, carries risks.
Flexibility “is fraught with political peril,” Penry said.
“Tuition bothers me more than anything … it scares the hell out of me,” said Dick Monfort, chair of the subcommittee and cochair of the main steering committee.
Subcommittee member Gary Reiff noted higher tuition “is just a hidden tax … you can’t ignore that fact,” But, he added, “It’s progressive, and that’s OK.” Reiff is a corporate and real estate lawyer who’s served on various higher ed boards in the past and currently is a member of the state Transportation Commission.
Rico Munn, director of the Department of Higher Education, gave the subcommittee five options to consider at Monday’s meeting. They were:
- Maintaining the proposed 2010-11 funding system into 2011-12. That basically involves rolling state aid back to 2005-06 levels, which would mean overall cuts.
- Allowing colleges and systems to become self-governing authorities, similar to the Colorado Housing Finance Authority or University Hospital. Under such a structure colleges would be free to set tuition as they like. (This idea is being pushed by some college leaders and Colorado Concern, a business and civic group.)
- Using a system of flat per-student funding to fund all colleges. This would help fast-growing institutions like Metro State and the community colleges and hurt more stable schools, such as rural colleges. The current hold-the-line system doesn’t compensate institutions for enrollment growth.
- Allowing schools with the ability to do so to raise tuition by up to 20 percent in 2011-12 and 2012-13. Some state tax support would shift to other colleges, and tuition increases would be held down for lower-income students. (It’s generally felt that larger, more competitive schools like CU, CSU and the School of Mines have the market power to raise tuition substantially while smaller regional schools like Adams State and Western State don’t. Higher education leaders also believe it’s necessary to keep tuition relatively low at community colleges, with their high percentages of low-income schools.)
- Requiring institutions to present specific plans for tuition increases and financial aid allocation to the Colorado Commission on Higher Education. This option also would include some shifting of tax dollars to smaller schools.
Subcommittee discussion Monday indicated a preference for option 5, with elements of option 3 included.
It seemed fairly clear that people weren’t much interested in the authority model.
“I don’t think the authority model becomes what we do,” said Penry.
“The authority model is not going to be fully discussed here,” Munn said.
The Joint Budget Committee Tuesday voted 4-2 to accept the Ritter administration’s allocation plan for college and university spending in 2010-11, rejecting a staff recommendation that likely would have sparked a nasty political fight.
The Ritter plan basically cuts state and federal stimulus support for each college and university back to the level of state support in 2005-06. (Stimulus rules forbid reducing support to lower than levels in that budget year.)
The problem, at least for some colleges, is that between 2005-06 and 2008-09 some institutions received higher percentage increases in state support than others. That was part of an effort to help those colleges get closer to spending levels at comparable institutions around the country.
The governor’s plan basically wipes out those gains. Metro State takes the biggest hit in the Ritter plan, along with Western and Adams state colleges. The University of Colorado system and the School of Mines would be least affected.
JBC staff analyst Eric Kurtz proposed a plan he called more “equitable.” It would have hit CU and Mines harder while delivering the lightest blows to Metro, Adams and Western.
Kurtz said his plan would give more state and federal money than the governor proposed to every school except Mines and CU.
The briefing paper prepared by Kurtz noted that with expected 9 percent tuition increases, Mines would get “a 5.6 percent boost in total funding and CU a 4.1 percent boost. These increases are more than any other institution.” (The JBC Tuesday also approved the 9 percent ceiling on resident undergraduate tuition increases.)
(Tuition has become the major source of Colorado college and university funding. Because of increased tuition revenue, the state system will have more money next year than in 2009-10.)
Sen. Moe Keller, D-Wheat Ridge and JBC vice chair, praised Kurtz for his work but said she wasn’t up for a fight over a new formula. “We can’t win. … I lean in the direction of the governor’s proposal.”
Kurtz wasn’t surprised by the committee’s reaction. Just before Keller spoke, he quipped, “I’m sure CU and Mines will be the downfall of this staff recommendation.” Various college lobbyists sat in on the hearing, including Tanya Mares Kelly-Bowry, CU vice president for government relations.
Keller; chair Rep. Jack Pommer, D-Boulder; Sen. Abel Tapia, D-Pueblo, and Sen. Al White, R-Hayden, voted for the governor’s allocation plan. Rep. Mark Ferrandino, D-Denver, and Rep. Kent Lambert, R-Colorado Springs, were opposed.