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CCHE endorses Proposition 103

GREELEY – The Colorado Commission on Higher Education Thursday endorsed Proposition 103 during the same meeting at which members got a hint of college and university budget cuts in 2012-13.

Montage of Colorado colleges
From left, the campuses of Colorado State University in Fort Collins, the University of Colorado-Boulder and the Auraria Higher Education Center.

Those cuts could range up to 16 percent of higher education support and involve deep reductions in state financial aid funds.

The voice vote was unanimous to endorse the ballot measure, which would raise state income and sales tax rates for five years to provide additional funding for education. The motion was made by Commissioner Jim Polsfut, a Democrat from the 7th Congressional District.

Earlier in their meeting at the University of Northern Colorado, Lt. Gov. Joe Garcia gave members some discouraging but unsurprising news about higher education budget prospects in the 2012-13 school year.

“We should anticipate that there will be some pretty significant cuts to higher education,” said Garcia, who also serves as director of the state Department of Higher Education.

While the Hickenlooper administration won’t announce a specific number until its 2012-13 budget plan is issued on Nov. 1, Garcia said higher ed cuts “could be between $50 million and $100 million.”

That’s a cut of between 8 and 16 percent of what the state currently provides to higher ed.

Whatever the cut, it likely will be allocated 50-50 between state aid to institutions, $519 million in the current year, and state financial aid to students, which is about $103 million, including aid to students who don’t attend state colleges. The 2012-13 aid amount “may fall dramatically below that,” Garcia said.

Asked why financial aid might take such a big hit, Garcia indicated that the current thinking is it’s better to preserve institutional flexibility in a time of such significant budget cuts. He noted that in recent years colleges have been good about allocating part of tuition revenues to financial aid.

Garcia called the potential cut in financial aid “significant and regrettable” and noted “the state need-based aid is a relatively small pot.” Colorado students receive nearly three times more in federal aid and almost twice as much in individual institution aid as they do from the state.

State aid has been steadily whittled down in recent years. Merit-based aid has been eliminated, and aid for graduate and proprietary school students steadily cut back. (See this DHE briefing paper for background on current discussions about how to allocate financial aid next school year.)

Reduced state aid, of course, likely means higher tuition rates. Tuition already supplies about 75 percent of college and university revenues.

Under a 2010 state law, college trustees can raise tuition as they see fit – subject to review by the CCHE, which last year approved plans for all but the Colorado School of Mines, which didn’t apply. (See this page for links to college tuition plans.)

Mark Cavanaugh, DHE chief financial officer, told the commission that the budget situation might prompt some colleges to seek revisions in their plans. He gave commissioners a suggested method for dealing with such requests (see memo), but the commission took no action.

Proposition 103 endorsement

The vote to endorse Proposition 103 came at the end of the commission meeting, and discussion took only a few minutes, with no member speaking in opposition. Eight members were present for the unanimous vote, six in person and two on conference call.

Sen. Rollie Heath, D-Boulder and the driving force behind the ballot measure, was at the meeting and thanked the members for their vote.

Other education governing bodies that have endorsed the proposal include the Adams State and Western State boards of trustees and school boards for the Aspen, Boulder Valley, Clear Creek, Denver, Jefferson County, Littleton, Platte Valley, Poudre, St. Vrain, South Routt and Steamboat Springs districts. (See full list of endorsements on proponents’ website.)

State law allows governing boards to take positions on ballot issues but forbids them from spending public funds on political campaigns.

There’s been no expectation in the education community that the elected State Board of Education, with its somewhat conservative 4-3 Republican majority, would support Proposition 103. During a SBE discussion Wednesday on its legislative priorities, which include protection of K-12 revenues, Chair Bob Schaffer, R-4th District, said he couldn’t support any education revenue increases that involve raising taxes.

The 11 CCHE members are appointed by the governor and confirmed by the Senate to staggered four-year terms. The current membership includes six Democrats, four Republicans and one unaffiliated voter. State law requires that no more than six commissioners be members of the same political party. Those voting yes Thursday included four Democrats, three Republicans and the one unaffiliated member.

Gov. John Hickenlooper has repeatedly declined to either endorse or oppose Proposition 103. Garcia has more than once expressed sympathy with what backers of the measure are trying to do but has stopped short of an endorsement. He didn’t participate in the commission’s discussion of the issue Thursday.

PROPOSITION 103

Provisions

  • State income tax rate would rise to 5 percent from 4.63 percent
  • State sales tax rate would go to 3 percent from 2.9 percent
  • New rates are same as those in effect in 1999
  • Higher rates would end in 2017

Revenue use

  • Proposition would raise an estimated $3 billion over five years
  • Additional revenue could be spent only on preschool programs, K-12 schools and state colleges and universities
  • Legislature would decide how to split revenues
  • Spending would have to be in addition to levels of 2011-12

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