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Ritter holds the line on education cuts

A revised 2010-11 budget plan announced Thursday by Gov. Bill Ritter includes no additional cuts to K-12 support or to higher education.

Perhaps the most significant education news out of the governor’s announcement was that he’s open to some form of tuition flexibility for next year, if college presidents can come up with a proposal that won’t harm low- and middle-income students.

“We may be able to broaden this conversation about tuition flexibility,” Ritter said during a Capitol news conference.

Asked to elaborate, Ritter only said that if college presidents can develop a tuition proposal that he considers fair, he’ll take a look.

Ritter has proposed a 9 percent ceiling on tuition increases in the 2010-11 school year.

Some college presidents, particularly at larger institutions and systems, want individual colleges boards to have complete freedom to set tuition rates and financial aid. They argue they could manage such a system and still maintain affordability.

Ritter, who frequently refers to the opportunities low tuition gave him at Colorado State University, up to now has been reluctant to take tuition control out of his and the legislature’s hands.

Speaking later to a Colorado Association of School Boards lunch, the governor was applauded when he stressed that he’s proposed no new K-12 cuts. He quipped, “That gives you some idea of the times we’re in [when] that’s the applause line – no new cuts.”

State school funding already has taken a hit of more than 2 percent in the current year, and Ritter earlier proposed an effective cut of more than 6 percent for 2010-11.

The original budget for K-12 spending for 2009-10 was $5.7 billion, including $2 billion in local revenue and $3.7 billion from the state.

Senate Bill 10-065, already passed by the legislature and signed into law, cut the state share by $110 million (and didn’t provide $20 million for increased enrollment), bringing the total to $5.58 billion.

Ritter’s original 2010-11 budget proposal, made last November, called for a 6.1 percent cut from what otherwise would have been expected under the Amendment 23, which would take total school support next year to $5.43 billion.

In order to make those cuts next year, the administration is interpreting Amendment 23 to cover only base state support of schools, about 75 percent of total state aid. The cuts would come from the other 25 percent, money used to equalize spending among districts.

School districts have been hard at work for weeks tweaking their 2009-10 spending (the $110 cutback was expected) and making plans for 2010-11.

Just this week the Durango and Hayden school boards formally declared “fiscal exigency,” a legally required first step toward layoffs; a Pueblo City board member raised the question of closing the district’s administration building; a citizen survey in Mesa County showed support for a four-day week and a shorter school year, and some Douglas County citizens told the school board they’d support tax increases to blunt the impact of a proposed $44 million cut.

Ritter’s 2010-11 higher education plan calls for a cut of about $60 million in state and federal stimulus support. But, overall college revenues, about $1.9 billion, would be about the same as this year if an overall 9 percent tuition increase is implemented.

The governor’s revised plan also includes a $135 million transfer from the state’s main general fund, to the State Education Fund, designed to stave off SEF insolvency for one year, and transfer of $45.2 million from the Early Achievers Scholarship Trust Fund, part of CollegeInvest, to the general fund and need-based scholarships. About $9 million would be left in the fund to support current recipients and current high school juniors and seniors who might became eligible. The program would end in 2016.

The governor’s overall proposal achieves a total $340 million in cuts, savings and fund transfers on top of the $1 billion in reductions proposed when he unveiled the original budget plan last November. The adjustments were made in response to state revenue forecasts that came out in late December.

Ritter’s Thursday announcement won’t be the last word on the 2010-11 budget. Further adjustments may be needed after the next formal state revenue forecasts are issued March 19. And the final decision on the budget rests with the legislature, based on numbers from the Joint Budget Committee.

Asked about the likelihood of additional cuts, to either the 2009-10 or 2010-11 budgets, Ritter said, “We’ll know more about this in April and May,” after 2009 income tax returns come in.

“We are past the worst of it, but we still have budget challenges,” the governor said. He also said there’s “a very real possibility the 2011-12 budget year could involve cutting.”

Take it from Vody

Vody Herrmann, school finance chief at the Department of Education, is highly regarded as a person who knows her numbers down to the last decimal point and who will help any school district with any question.

Herrmann spoke late Thursday afternoon to a Colorado Association of Schools Boards conference, and here are some snippets of what she had to say on key financial questions:

On cuts proposed so far: “We hope there are no further cuts. I can’t guarantee there won’t be.”

What the legislature might do with Ritter’s proposed 2010-11 cuts: “There could be all sorts of other suggestions [but] there isn’t more money.”

On Ritter’s cuts and Amendment 23: “I think this is setting a new base.” Schools won’t get back to 2009-10 funding levels “for four or five years. … Things look even tougher” in 2011-12.

What districts should do: “You need to have a little buffer. They [the state] could come back for $100 million or $50 million or $150 million” in budget pullbacks if state revenues continue to slump next year. “Just please be cautious. I just can’t say that enough.”

Inflation rate set for A23 formula

On Friday, school districts got a piece of good but essentially meaningless news when the federal government announced that the official 2009 Denver/Boulder/Greeley inflation rate was negative .6 percent.

The inflation rate is part of the Amendment 23 formula, which requires state school support to increase each year by inflation in the previous calendar year plus 1 percent, multiplied by enrollment.

State officials had been assuming 2009 inflation would be pegged at negative .9 percent, making the multiplier a measly plus .1 percent. With actual inflation pegged at minus .6 percent, the multiplier inches up to plus .4 percent.

That will mean a slightly larger increase than expected in categorical funds (money earmarked for transportation, special education and some other specific programs), but it won’t affect overall school spending in 2010-11.

That’s because the Ritter administration, pressed by the state’s budget woes, has set an overall target for K-12 aid that’s $260 million below 2009-10 levels.

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