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CCHE approves the unavoidable

The Colorado Commission on Higher Education Thursday unanimously approved a 2012-13 allocation of state funding to colleges and universities that’s 5.7 percent below current levels.

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.

While the legislative Joint Budget Committee and the full legislature can change the allocation, the formula may well hold because of one key fact – it was pre-approved by leaders of all the state’s colleges and system.Allocation of state funds by campus is a perennially contentious process because every college president thinks his or her campus needs more money or isn’t treated fairly by a particular formula. In past years the commission has had to forge compromise among competing allocation plans advocated by different groups of state colleges and systems. Occasionally that lobbying has spilled into the legislative session as college leaders tried to influence JBC decisions.

But this year, faced with the inevitability of another round of budget cuts, college leaders and Department of Higher Education staff hammered out an agreement before Gov. John Hickenlooper’s 2012-13 proposed budget was finalized. (The governor unveiled his budget earlier this week, setting up the commission vote.)

That process produced “something that is very unusual – a letter signed by all of them,” noted Lt. Gov. Garcia, who’s also director of DHE.

Matt Gianneschi, Garcia’s deputy, stressed the presidents’ agreement “is not a recommendation of satisfaction” with the amount of support.

Institutions would receive a total of $489.7 million next year, down from the current $519 million and down 30.6 percent from the recent high of $706 million in 2009-10. The totals include funds for Aims Community College and Colorado Mountain College, which aren’t directly controlled by the state, and for vocational schools. (See bottom of article for chart listing allocations by school and system.)

Under the agreement, allocation discussions would reopen “If changes in state revenue levels require substantial additional reductions,” in the words of the presidents’ letter.

State support has dropped to about a quarter of higher education revenue, with the majority of funding now coming from ever-rising tuition. On average statewide, resident undergraduate students probably can expect 9 percent increases in 2012-13, although rates will vary by campus.

The money will be allocated to institutions through a complex formula based on past cuts and on an institution’s ability to raise other revenues. Such a formula was used to award allocations for the current budget. A third element of the formula allocates $7.5 million based on enrollment growth. Some $10 million was used for enrollment compensation this year.

A second key element of Hickenlooper’s proposed higher ed budget is cutting state funding for financial aid to about $70 million from this year’s $100 million.

While that cut has raised concerns in some quarters, Gianneschi pointed out that the state provides only 5 percent of the total aid available to students at state colleges and universities. The federal government and the institutions provide the bulk.The rationale behind the governor’s plan, Gianneschi said, is that imposing the whole budget cut on institutions and sparing financial aid would have threatened colleges’ ability to provide the levels of student support required by their financial accountability plans. (Those so-called FAPs also are the documents that detail individual college plans for future tuition rates. Links to FAPs.)

Commission member Regina Rodriguez asked, “How much does this translate into a decrease for the individual student?”

Gianneschi said, “We don’t yet know because we’ll have to see what enrollments look like,” adding “the reduction may be along the lines … say $300 to $350 per student.”

He also said that allocating a smaller number of dollars among more students might require a “counter-intuitive” allocation of financial aid, like directing a smaller share to low-income students, who are eligible for federal aid, and a larger share to middle-income students, who can’t get federal support.

The commission has the sole power to allocate state financial aid among institutions (including private and for-profit colleges) and will decide in a few months how to divvy up 2012-13 aid.

There’s been no prior agreement among institutions on allocation of aid, and some DHE staffers privately expect sharp-elbow lobbying by college leaders, even though the amount of money involved is relatively small.

All the talk about budget cuts prompted CCHE member David Edwards to ask, “Are we seeing signs yet of diminished quality?”

Gianneschi replied, “We can say that the quality that existed prior to the recession has been maintained, but we’re now starting to face the question” of future decline.

Garcia added, “Colorado is often held up as an example of how to do more with less” in higher education. “It’s not possible to continue that way forever.”

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