Education leaders know that cuts in state education support will be bad in 2011-12; they just don’t know yet how bad.
They’ll know more after 1:30 p.m. Tuesday when Gov. John Hickenlooper unveils his budget proposals for the upcoming fiscal year to the Joint Budget Committee.
At the very least, statewide school funding is likely to be $165 million less in 2011-12 than it is this year, but the figure is widely expected to be considerably larger, perhaps double that or more, in the range of $300 to $400 million.
“Next year’s budget is going to see huge cuts,” Senate Majority Leader John Morse, D-Colorado Springs, told senators Friday morning as they debated 2010-11 budget balancing bills.
There’s been a buzz of speculation about education cuts in the last several days, with various figures thrown around, but the administration was keeping its plans close to the vest ahead of the announcement.
Administration budget officials this week held meetings with representatives of constituencies that depend on funding from various state departments. There were gatherings for both K-12 and higher education groups, but specific budget figures reportedly weren’t released at the sessions.
After three years of increasing cutbacks in state aid, school districts are sensitive about cuts, and they’re also nervous about timing.
Districts already are well into budget planning for the 2011-12 school year, but officials can only plan so much until they know how much state aid to expect. The timing problem is exacerbated this year because there’s a new governor. The chief executive is required to file a proposed budget each Nov. 1, so in most years there’s a detailed plan of what the executive branch wants before the legislative session convenes in January.
But new governors like Hickenlooper file a revised budget after they take office, reducing the amount of time between when the governor’s proposals are known and when the legislature makes the final budget decision sometime in April.
Hickenlooper has long warned that tough cuts will have to be made in 2011-12. The state needs to close a gap between revenue and spending needs that’s estimated at about $1.1 billion.
The State Board of Education this week was briefed on what “best-case” cuts might look like, and it didn’t look very good.
“School funding becomes the elephant in the room” of the 2011-12 budget,” said interim school finance director Leanne Emm. The tight budget situation “cannot avoid affecting education.”
“There are going to be significant reductions” proposed by the administration, Emm told the board. “We are not at liberty to discuss them right now.”
Emm did walk the board through a spreadsheet that detailed a minimum level of cuts.
Total program funding, the combination of state and local revenue for basic school operating costs, would drop to $5.27 billion next year from this year’s $5.4 billion.
That would mean average per pupil funding statewide would slide to $6,532 next year from this year’s $6,811. That number was $7,075 in 2009-10.
That scenario is based on these assumptions:
- Inflation will be 1 percent. Amendment 23 requires base school support, which is about 75 percent of total program, to increase by inflation annually.
- The state amount of total program funding will be the same as this year, about $3.4 million.
- The state will not backfill a predicted $142 million drop in local revenues.
- The cost of enrollment increases won’t be covered by the state.
Of historic interest, Emm’s spreadsheet notes that full Amendment 23 funding next year would be more than $5.9 billion. The legislature narrowed the use of the A23 system last year because of the budget crunch.
Participants in the K-12 and higher education meetings with officials of the Office of State Planning and Budgeting said specific cut figures weren’t mentioned, although the administration reportedly is trying to keep state funding of higher education at about $500 million.
State support below that amount likely would trigger resident undergraduate tuition increases larger than 9 percent at some campuses.
One specific that OSPB officials mentioned was that they’d like to keep the state general fund reserve at 4 percent instead of the 2 percent that’s repeatedly been used in tight budget times. The Joint Budget Committee is proposing a 2.3 percent reserve in its balancing plan for the current 2010-11 budget, now being considered by the full legislature.
Having a larger reserve, of course, means less money is available for state programs and larger budget cuts are needed.
The state’s general fund is roughly $7 billion, nearly half of which is used for K-12 and higher education. Budget balancing typically has been done with a combination of program cuts and transfers from cash funds to supplement the general fund. Federal stimulus funds also have been used to help balance the last two budgets.
But that federal money no longer is available, contributing to the $1 billion gap between needs and revenues.