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Higher ed budget back in play

Colorado will seek a waiver from federal stimulus rules that require a minimum level of state support for higher education, the Colorado Commission on Higher Education learned Thursday.

Approval of such a waiver would allow the legislature to reduce the amount of state funding that goes to colleges, but the intention is to cover the loss with stimulus dollars that haven’t yet been allocated, said David Skaggs, director of the Department of Higher Education.

“That’s certainly what everyone is intending,” Skaggs said.

Such a reduction of state support would give lawmakers a bit more wiggle room as they try to cover a $384 million shortfall in the 2009-10 budget.

While overall higher ed spending would be held level if the plan works, it would leave colleges and universities with a lower base of state support when the stimulus ends in 2011.

The commission Thursday also unanimously approved a resolution to convene a Sept. 21 higher ed “summit,” a meeting intended to kick off a 15-month project to create a new master plan for the state’s postsecondary system.

Higher education’s financial pinch is a key impetus behind the master plan, which is being pushed by Gov. Bill Ritter and Skaggs despite hesitation by some college presidents.

Recession-driven revenue declines forced the 2009 legislature to cover about $1.4 billion in shortfalls in the 2008-09 and 2009-10 budgets.

Higher education was in the crosshairs during that process, and one proposal called for cutting state support of colleges by $300 million in 2009-10.

That was averted by a plan under which state support of higher ed was cut back to 2005-06 levels (a deeper cut would have made Colorado ineligible for education stimulus funds). Then, $150 million of stimulus money was used to bring college support back to 2008-09 levels. The legislature has intended to use the same formula for 2010-11, meaning higher ed would be frozen at the same level for three budget years.

This year and next, higher is to receive about $555 million in state funds and $150 million from the stimulus. Cutting the $555 million and replacing the cut with stimulus funds would keep higher ed stable, but leave colleges with a big hole to fill when the stimulus ends. (Colleges receive additional funds from tuition and fees, federal grants and private donations.)

That plan (and a lot of other proposed state spending) is threatened by a continued decline in state revenues, highlighted in an updated state forecast released late last month.

State economists now estimate the state will have to cover an additional $384 million shortfall in 2009-10.

The Joint Budget Committee will start tackling the problem next fall and the full legislature in January, but Ritter already has asked state departments to come up with 10 percent cuts.

“We are very optimistic the waiver will be granted,” Skaggs said, adding he believes the federal Department of Education will act quickly. “We’re not going to be the only state in this predicament.”

Earlier, discussing the master plan, Skaggs said, “This is a hugely ambitious undertaking, and a lot of questions have been raised, especially by institution presidents.”

But, Skaggs added, “It is at least the governor’s view … that this is even more necessary than before” because the state will need to show “the people of the state will be getting for their money” if there’s a ballot proposal in 2011 to raises taxes for higher education or other state programs.

The commissioners spent a fair amount of time discussing how college presidents view the idea.

Commissioner Greg Stevinson asked more than once if the college presidents “are all on board on this?”

“It’s fair to say all the CEOs are not on board,” Skaggs said.

Nancy McCallin, president of the community college system, said, “I think there was a great deal of concern on a couple of fronts.” (McCallin hosted the meeting at the system’s Lowry headquarters.)

First, some presidents are concerned that a master plan might come up with new duties for higher ed but no funding, and second, presidents are focused on the current financial crisis.

As currently envisioned, the master plan process would examine student access and success, the role of higher ed in academic growth and innovation, how to improve institutional efficiency and productivity and adequate funding.

The work would be done by a steering committee of educators, policymakers and citizens, assisted by working groups that would focus on the subjects listed above. A final report would be adopted by CCHE in November 2010, with recommendations forwarded to the 2011 legislature.

The department already is doing some planning work with a grant from the Lumina Foundation but hopes to receive a $2 million, four-year continuation grant. Skaggs estimated the master plan could cost “several hundred thousand dollars to do it the right way, which means being out in the state” gathering a broad range of views.

But, the exact shape of the proposal “is still a work in progress” and will be tweaked up to the Sept. 21 summit, Skaggs stressed.

Do your homework

Skaggs memo about the master plan
Detailed draft proposal for the master plan process

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