College funding teeters on brink

Officials say huge tuition hikes likely if system isn't fixed

By Berny Morson, Rocky Mountain News (Contact)

Tuesday, January 8, 2008

Barry Gutierrez / The Rocky

First-year medical students Sam Mast, 23, left, and Julian Maendel, 26, chat before class at the University of Colorado Anschutz Medical Campus in Aurora. If faced with big tuition hikes, some med students might be forced to quit.

Colorado's higher education system is on shaky financial ground and students could be clobbered with stiff tuition hikes or program cuts if the system collapses, state leaders say.

The problem is a set of interlocking financial policies - some written into law and the Colorado Constitution - that make the state's 28 college and university campuses uniquely vulnerable to a recession.

And a recession is inevitable, legislators and higher education leaders warn.

"We know there will be an economic downturn at some point," said House Speaker Andrew Romanoff, D-Denver, who has tried to address the issue.

Contributing to the problem are:

* Under Amendment 23, passed in 2000, public schools are guaranteed a share of the budget intended to bring them up to the national average in per-pupil spending - even if the Colorado economy tanks. In a recession, public schools will get a bigger slice - and higher education a smaller slice - of a shrinking budgetary pie.

* Legislators are bound by a law capping the annual overall budget increase at 6 percent. If revenue increases by more than 6 percent, the excess goes to capital construction and transportation - it can't be used for higher education.

* Legislators can't repeal the 6 percent cap because of the Taxpayer's Bill of Rights, a constitutional amendment added by voters in 1992. It requires a referendum on any measure that changes state fiscal policy.

Funding slashed

Higher education funding was slashed by nearly 22 percent between 2002 and 2005, the bottom of the recession that hit Colorado in the early part of this decade, according to the legislature's Joint Budget Committee. Those same years saw tuition rise by more than 30 percent.

State appropriations for some colleges - including the University of Colorado, Colorado State University and the University of Northern Colorado - are still below pre-recession levels. That's because the 6 percent cap prevented legislators from ramping up spending when the recession ended.

CU President Hank Brown said he believes another recession would bring even worse funding cuts - up to 50 percent.

The blow was cushioned in the last recession by the state's cash reserves, Brown said. That won't happen next time.

"Most of those reserves are gone," he said.

Just to maintain present funding levels, schools will need massive tuition increases - maybe 40 percent, Brown warns.

The biggest problem will occur in the health professions, where tuition is already high - and where CU is dead last in funding among the nation's 74 medical schools, Brown said.

CU medical students who are state residents pay $23,373 per year. Nonresidents pay $76,691.

Many students are already maxed out on the amount they can borrow, Brown said. They would have to leave.

"On health sciences, I just don't know what to do," he said.

Colorado colleges and universities are close to the bottom among the 50 states in public funding, partly as a result of the cuts earlier in this decade.

Funding would have to rise by $750 million a year just to reach the national average, higher education director David Skaggs estimates.

Balancing needs

Business leaders have spoken out in favor of boosting the amount of money that goes to higher education. They believe good colleges attract business.

But lawmakers and Gov. Bill Ritter must balance the needs of higher education against other, equally pressing problems in health care and transportation.

A ballot item to raise taxes for higher education - discussed last spring by some college and legislative leaders - is not likely to materialize this year, several lawmakers said.

Brown said he's interested in taking a package to voters that would tie higher funding to improved efficiency and graduation rates.

"I've not found anyone in higher education who agrees," Brown said.

Consensus is gathering around a plan to raise college and university funding to the national average by incremental increases over the next 10 years.

Ritter has recommended an increase of more than $50 million for the fiscal year that begins July 1, about the same amount the legislature approved last spring, also at Ritter's request.

Coupled with tuition increases, Colorado schools could reach the national average in a decade, Skaggs said - assuming no recession and assuming the tuition increases are practical.

"You don't want tuition to get in the way of access," Skaggs said.

But a recession would roll back any progress, said Rep. Bernie Buescher, D-Grand Junction, chairman of the Joint Budget Committee.

"They get hurt. They get cut real dollars," Buescher said.

Families would balk

Even without a recession, annual increases of $50 million won't bring Colorado higher education to the national average in 10 years, Buescher said.

That would take tuition increases of 4 percent or 5 percent a year on top of the additional state funds, Buescher said.

Families won't sit still for that, he warned.

Blake Gibson, chairman of the Associated Students of Colorado, a statewide student government group, said major tuition hikes year after year would meet opposition on campus.

"Obviously, students don't feel that's the answer," said Gibson, a 20-year-old Colorado State University sophomore majoring in biomedical sciences and Spanish.

Under state law, 18 percent of tuition revenue must go to scholarships to poor students. That leaves middle-class students vulnerable, Gibson said.

He refers to the even worse possibility of a recession as "the doomsday scenario."

Tuition hikes would force some students out of school, while some programs might be chopped, he said.

More part-time faculty

Metropolitan State College of Denver President Stephen Jordan said big cuts would curtail efforts to increase the number of courses taught by full-time faculty members, as opposed to part-timers.

Because full-time professors develop closer bonds with students, Jordan said, they can serve as mentors and help boost Metro's graduation rate, now just 29 percent.

Metro has increased the number of full-time professors by more than 100 over the past two years and plans to hire 300 more over the next five years.

"We'd most likely end up living with the retention rates and graduation rates we have now," Jordan said of a massive budget cut.

Some key lawmakers, including Buescher, the JBC chairman, are eyeing funds the state receives from mineral leases on federal land in Colorado as a possible source of money for higher education. Some of the money would also help mitigate the effects of the gas boom on local communities.

How much the state will receive is still unclear, Buescher said. And the amount will be affected by how long gas drilling lasts.

In one variant, the mineral lease money would be invested, creating an endowment, and only the interest used for higher education.

Also in the talking stage is a proposal by Romanoff, the House speaker, to address the root cause of the problem - the various pieces of law and the state constitution that put higher education at risk.

Those plans are on hold while state leaders, including Ritter, look at what - if anything - should go to voters in the 2008 general election, Romanoff said.

Meanwhile, Romanoff has asked the legislative staff to work with CU economists to pin down the numbers on how badly the state budget, including higher education, could be hurt in the next recession.

He said he hopes the report will be finished during the first half of the legislative session.

morsonb@RockyMountainNews.com or 303 954-5209

The series

Gov. Bill Ritter has identified health care reform, transportation and funding higher education as the biggest challenges facing Colorado. The Rocky looks at each of those issues and how the governor and lawmakers plan to address them during the legislative session that opens Wednesday.

* Saturday: Ritter's challenges

* Monday: Transportation

* Today: Higher education

* Wednesday: Health care

Galloping tuition

As state funding for higher education declined, tuition rose dramatically to make up the difference. In 2002-03, state funding for higher education was chopped by 8.3 percent. Tuition rose that year by 12 percent. The following year, a double-digit budget cut was accompanied by a double-digit tuition increase.

State Percent Tuition Percent Year funds* of change revenue* increase

'00-01 $612.9 NA $552.0 NA

'01-02 $617.8 0.8 $602.4 9.1

'02-03 $566.4 -8.3 $678.2 12.6

'03-04 $495.8 -12.5 $755.3 11.4

'04-05 $491.3 -0.9 $799.7 5.9

'05-06 $534.2 8.7 $881.4 10.2

'06-07 $579.0 8.4 $928.6 5.3

'07-08 $627.6 8.4 $985.3 6.1

• January 8, 2008

  4:24 a.m.

  Suggest removal

  Jim_in_Erie writes:

  Deja vu all over again, again.
  Isn't this pretty much what we heard just before the vote on Referendums C and D???
  Only to find out that, while the financial conditions were pretty crappy, the spending practices of the University system were more at fault then anything else?
  Has that truly been fixed, before we are again strong armed into another tax payer funded bail out?
  Just wondering.......

• January 8, 2008

  6:36 a.m.

  Suggest removal

  sampson writes:

  How 'bout these BA*#ARDS learn to live withing their means. I'm sick and tired of tax hikes to feed these money grubbing pukes!! Get rid of the ROYALTY that think they need to tax the little people (me) so they can live like Kings and Queens. These people give the human race a bad name!

• January 8, 2008

  9:30 a.m.

  Suggest removal

  phlsierra writes:

  "On the brink" my foot. Universities do not control their costs or spending.

• January 9, 2008

  12:09 p.m.

  Suggest removal

  randyvt writes:

  While one can argue about the details of how higher ed spends (or doesn't) and controls costs (or doesn't), the indisputable plain fact is that Colorado ranks near the bottom of all 50 states in its support for higher education. If that's where Coloradans want their state, then that's where we'll be.

  Me, I personally believe that strong higher ed leads to strong economic development, a better educated workforce, and lower tax burdens on the "little people." I say that as a "little person' myself, as I've never made six figures and I know plumbers and real estate agents and ranchers that make more than I do.

  I'm not a lawyer, a doctor or a engineer, but I value good solid educational opportunities for me and for my children. After all, our children will need to make LOTS of money in their lifetimes to pay back the debt the current irresponsible federal administration has created through waste in Iraq, Afghanistan, and happy deals for Halliburton and other cronies.