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House endorses tuition flex plan

Update 11 a.m. May 7 – The House Friday gave easy preliminary approval to Senate Bill 10-003, the measure that allows state colleges and universities to raise tuition up to 9 percent a year for each of the next five years.

And, colleges could ask the Colorado Commission on Higher Education for permission to impose larger hikes.

The House Education Committee Thursday took 15 minutes to discuss and vote 12-0 for SB 10-003, a key piece of higher education legislation this year.

The bill also would give colleges greater freedom in allocation of financial aid and in managing their financial affairs.

Legislators and higher education leaders argue that the bill is needed to help institutions weather the continued financial challenges facing the state system, challenges that state government currently has little spare money to cushion.

But, state higher education chief Rico Munn told the committee Thursday, “This by no means fixes the issues that face higher education.”

Rep. Karen Middleton, D-Aurora and a prime sponsor, said, “I am fully committed to seeing us find a sustainable source of funding for P-20 education. I believe the will of the Colorado voters will allow us to do that … probably next year.”

Middleton said the legislature has “no choice” but to pass SB 10-003 in the current fiscal environment.

There was a non-substantive but somewhat wordy discussion on the floor Friday. The House easily turned down a proposed amendment by Majority Leader Paul Weissmann, D-Louisville, to abolish the system of College Opportunity Fund stipends and return to direct state funding of colleges.

The best quote of the discussion came from Rep. Cheri Gerou, R-Evergreen, who praised Middleton and Minority Leader Mike May, R-Parker, for helping corral competing higher ed interests behind the bill. “It’s like trying tro play whack-a-mole to keep everybody happy on this. … What I think we’re going to see is a renaissance in higher education in Colorado.”

The measure had passed the House 34-1 on Wednesday.

Here’s a rundown of the bill’s major provisions:

• Starting in the 2011-12 school year, college boards would have the power to set tuition rates as they chose, but increases above 9 percent for resident undergraduates would have to be approved by CCHE.

• To get CCHE approval, a school would have to provide a multi-year financial and accountability plan detailing the amount of the increase, how access and affordability would be maintained for low- and middle-income students, details on how the school is implementing flexibility in fiscal rules and how the school is ensuring levels of services and academic quality.

(These two provisions pretty much mirror the Ritter administration position as developed by the CCHE and the Higher Education Strategic Planning Steering Committee.)

• No later than next Nov. 10, colleges would have to give the CCHE and the Joint Budget Committee plans for how they would handle a possible 50 percent cut in state support in 2011-12.

• The CCHE would continue to determine the overall amount of state financial aid each institution receives, but individual colleges would have more flexibility to allocate that aid among their students. The state auditor would review access and affordability during its biennial reviews of state colleges and universities. (Supporters of the bill argue that recent increases in federal financial aid cover low-income students but that colleges need more flexibility to provide aid to middle-income students.)

• Colleges and universities would be allowed to set their own financial rules, be exempt from state central purchasing requirements, manage their own debts and contracts, receive additional freedom to manage construction projects and real estate transactions and greater flexibility in rehiring retired employees than is allowed in state government overall. (College presidents have been pushing for these financial flexibility provisions for more than a year, although they repeatedly stress that such flexibility alone won’t solve all of the system’s financial challenges.)

• The higher education strategic plan now being developed by an appointed committee and four advisory panels would have to be submitted by next Dec. 15.

• CU and CSU would be given greater flexibility to enroll more foreign students (who generally are full-pay students). The original bill gave the Colorado School of Mines total freedom to set tuition. An amendment added in the Senate puts Mines under the overall tuition plan but would give it full flexibility after that.

Higher education funding, which unlike some other state programs isn’t protected by any requirements of the state constitution or federal law, has taken major funding hits during both recessions in the last decade.

Total higher education revenue for this school year, last year and for 2010-11 is stable at just under $2 billion a year. For next year the state is providing just under $600 million. College and university budgets have been maintained only with federal stimulus money (which runs out after 2010-11) and tuition increases.

Some legislative leaders have warned that state budget challenges in 2011-12 could force a $300 million cut in aid to higher ed.

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