clock menu more-arrow no yes

Filed under:

Hick budget plan boosts K-12, colleges

Colorado school districts would get an increase of $201.6 million in 2013-14 while higher education support would increase $30 million under the 2013-14 budget plan unveiled Wednesday by Gov. John Hickenlooper.

In percentage terms, the increases would amount to a 4.8 percent increase in all state K-12 spending and a 2.3 percent boost for state colleges and universities.

The current 2012-13 state budget includes $5.3 billion in state and local funding for K-12 year, with a state share of about $3 billion. Many school districts still had to trim budgets this year because the funding didn’t fully cover rising costs.

State support of colleges and universities is about $513 million this year, plus an additional $100 million earmarked for financial aid. The governor is proposing a $5 million increase for financial aid in 2013-14. The administration assumes resident undergraduate tuition increases will average 9 percent in 2013-14.

Hickenlooper’s overall budget plan proposes a grand total of $21.9 billion in 2013-14 state spending, up 5.5 percent. Spending from the general fund, the state’s main tax-supported account, would be $8.1 billion, a 5 percent increase.

The governor’s plan also proposes to increase the state’s general fund reserve to 5 percent from 4 percent, using about $80 million that might otherwise be spent on programs, such as schools.

“The recovery leaves us cautiously optimistic,” Hickenlooper told reporters. “We’re beginning to be able to restore the deep cuts” of recent years.

While the budget is back to pre-recession levels in dollar terms, Hickenlooper noted that when inflation and population growth are factored in, the state general fund is $1.1 billion below 2007-08 levels.

State budget director Henry Sobanet told reporters during a morning briefing that while the proposed budget includes increases for virtually every area of state spending, “We can’t recover from the recession in one year.”

“Rome wasn’t rebuilt in a day,” was how Hickenlooper put it later.

Reaction to the budget proposal was generally positive.

Jane Urschel, deputy executive director of the Colorado Association of School Boards, said, “School boards can breathe a ‘cautious’ sigh of relief that the governor is in our corner with his intent to fund pupil growth and inflation. We appreciate the consistency of intent expressed by his office back in September for funding inflation and enrollment.”

Kerrie Dallman, president of the Colorado Education Association, said she feels teacher and families will be “appreciative” of the increase, but that “Great economies start with great education, and all Coloradans need to recognize this budget only marginally increases the investment we need to make in our students to secure the strong, dynamic state economy we all desire for these children when they enter the workforce.”

Bruce Caughey, executive director of the Colorado Association of School Executives, said, “We appreciate that the governor is making public education funding a high priority. His intent to cover inflation and student enrollment growth is particularly helpful for districts still feeling the weight of over a billion dollars in cuts over the last four years.”

Weighing in for higher education, University of Colorado President Bruce Benson said, “The past several years have been difficult times for budgets for higher education, so this is great news for CU and all of higher education. We still face challenges in the coming years, but the clear message today is that the governor sees higher education as a top priority.”

Current House Speaker Frank McNulty, R-Highlands Ranch, struck a subtly partisan note, saying, “Students, parents and teachers continue to be a top priority as we fight to save additional money for our schools. We certainly hope that the spending in Gov. Hickenlooper’s proposed budget is not a return to the tax-and-spend agenda that moved us closer to bankrupting our state during the Ritter recession, but it will take us some time to fully review his suggestions.”

Modest education increases had been expected since the quarterly state revenue forecasts were issued in later September. At that time, Sobanet, director of the Office of State Planning and Budgeting, said, “We believe we’ll be able to accommodate inflation and enrollment in K-12 in a way the state hasn’t done in recent years.”

Per-pupil funding would rise

The proposed K-12 budget would be $31.7 million more than the amount required to cover inflation costs and enrollment growth, according to the governor’s letter. Average per-pupil funding would be $6,659 compared to $6,474 in the current year – or $185 more per student.

The overall increase of $201 million would include $189 million in state funds and an expected $12.5 million rise in district revenues.

The governor is suggesting that school districts use $23.9 million to improve full-day kindergarten and preschool programs.

The K-12 increases would come almost entirely from the State Education Fund, a dedicated account that can be used only for schools. The expected state surplus at the end of the 2012-13 budget year will be rolled into the fund, beefing it up to about $717 million and providing most of the cash for the 2013-14 increases. There will be an increase of only about $1 million in K-12 spending from the general fund.

The plan suggests leaving $435 million in the education fund at the end of 2013-14, providing a head start on school funding for the following year.

Sobanet said the proposed budget doesn’t take into account any possible effects of a Colorado Supreme Court ruling in the Lobato v. State school funding lawsuit. “No one really knows when we’ll get a decision,” he said, adding that the budget is based on current state law.

First step in a long process

Release of the governor’s budget plan marks the public opening of a budgeting process that won’t wrap up until near the close of the 2013 legislative session next May.

Lots can happen between now and then to affect the final shape of the 2013-14 budget. The Nov. 6 election will determine which party controls the legislature – or whether split control will continue. The outcome of the elections also will determine which individuals will sit in leadership positions on the Joint Budget Committee and on the House and Senate education committees. Those lawmakers will have important voices in the budget process. Several education-savvy lawmakers – including the prime sponsor of the 2012-13 school finance act – have left the General Assembly because of term limits.

If Democrats take control at the Capitol, there could be pressure to increase K-12 funding more than Hickenlooper has proposed.

Two more sets of quarterly revenue forecasts, one in late December and one in late March, will give a better idea of whether there’s enough money to fund the governor’s budget – or whether unexpected additional revenue can be devoted to education.

Uncertainties about the federal budget, including automatic cuts expected to hit in January unless Congress acts, also could affect the state budget.

Hickenlooper and education spending

Hickenlooper’s past budget proposals for K-12 and higher education have been substantially changed, not necessarily because lawmakers didn’t like them but because revenues improved somewhat between when he made his proposals and when the budgets were approved.

In February 2011, announcing his first budget as governor, Hickenlooper proposed cutting K-12 spending in 2011-12 by $332 million. (See story.)

That sent chills down the spines of state education leaders. The 2011 legislature was able to trim the cut to $227.5 million.

For 2012-13, the governor proposed an $89 million cut in total program funding, the combination of state and district funds used to pay basic school operating expenses. (See story.) Revenues improved a bit over the course of the 2012 legislative session, and lawmakers found enough money to keep average per-pupil funding stable.

Recent years hard for education

Total program funding for K-12 schools hit a high of nearly $5.6 million in 2009-10 and then dropped for two years before stabilizing in the current budget. State revenues shrank during the recession, and it was impossible to avoid cutting K-12 because schools consume more than 40 percent of the state general fund budget, which has to be balanced every year.

To make those cuts, the legislature adopted a narrower interpretation of Amendment 23 than had been used in the past. The amendment mandates spending increases based on enrollment on inflation, but the new interpretation applies that only to base education funding, not to the full amount. It’s estimated that the “negative factor” has cost schools $1 billion since it was implemented.

During his news conference, Hickenlooper noted that the 2013-14 proposal makes up only about 3 percent of what’s been lost.

The negative factor cut 16.05 percent from what full K-12 funding would have been this year. Even with Hickenlooper’s proposed increase, the 2013-14 negative factor will be 15.5 percent.

The state’s college and universities have experienced a double whammy over the last decade. Funding was cut in 2003-04 in the wake of the tech crash and then recovered slowly through 2007-08. But large cuts hit the next year because of the new recession and declining revenues.

Higher education has no Amendment 23-type constitutional protections, and colleges also have an outside source of money not available to school districts – tuition. Raising tuition, of course, has the effect of shifting college costs from all taxpayers to individual families and students. Tuition now accounts for about 75 percent of state higher education revenues.

College funding already divvied up

Less than three hours after Gov. John Hickenlooper’s 2013-14 budget went public, the Colorado Commission on Higher Education approved a plan for how to divide the money among the state’s colleges and universities.

State support isn’t distributed to colleges on a flat amount per student. Different kinds of institutions have different costs – research universities have to support graduate and professional education, fast-growing colleges need funds to pay for more students and community colleges need state help because their students can’t afford high tuition.

Cutting the higher ed budget pie traditionally has been contentious in the past, with institution lobbyists twisting legislative arms to get more money for their colleges.

This year, coordinated by the Department of Higher Education, state colleges and universities hashed out their differences ahead of the 2013 legislative session and agreed on how to allocate the funding proposed in Hickenlooper’s 2013-14 budget. Higher ed leaders made a similar agreement last year.

Wednesday afternoon, the CCHE unanimously approved the allocations agreed to by the institutions.

Click on graphic to enlarge.

The allocation method is intended to provide a little something for everyone. Hickenlooper is proposing an additional $30 million in college funding. Under the allocation plan, a third of that is a proportional increase based on each college’s current state funding, a third is based on each college’s cuts in recent years and a third is based on enrollment growth.

Rolling all those factors together, the percentage increases range from a high of 6.6 percent at the Colorado School of Mines to a low of 4.5 percent at Western State Colorado University.

Mark Cavanaugh, DHE chief financial officer, told the commission that the allocation “means there are winners and losers” but that the institutions worked together to reach agreement. “People were looking at what was possible. … Nobody tried to go out there and jam the other guy.” (Read the letter college presidents sent to CCHE about their agreement.)

As a footnote, the commission Wednesday also approved a letter to the legislature that outlines what state support should be if the state were following the requirements of the law that set up a system of stipends for resident undergraduate students.

The answer to that question, by the way, is that law would require a $149 million increase in college funding in 2013-14, not the $30 million Hickenlooper has proposed. And state financial aid should be increased by $98 million next year, not by the $5 million included in the governor’s budget. (See this story for background on this issue.)

The most important supporters of state colleges, of course, are parents and students. Tuition provides about 75 percent of college revenues and has risen in recent years as state support has been squeezed.

The COVID-19 outbreak is changing our daily reality

Chalkbeat is a nonprofit newsroom dedicated to providing the information families and educators need, but this kind of work isn't possible without your help.