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Hick proposes big higher ed boost in 2014-15

Gov. John Hickenlooper is proposing a significant increase in higher education spending and enrollment-plus-inflation growth for K-12 in his 2014-15 budget plan, which was released Friday.

The plan includes a $60 million increase for state college and universities, an 11 percent jump. (They got a $30 million increase for the current 2013-14 budget year.) The tradeoff is that the administration wants institutions to limit tuition increases to no more than 6 percent for the school year in fall 2014.

“We feel like we have a pretty good handshake agreement with the governing boards” to do that, said state budget director Henry Sobanet. Under a law that expires in 2015, colleges are free to raise tuition up to 9 percent a year, and they can levy bigger increases with approval of the Colorado Commission on Higher Education.

The governor’s request also includes $40 million in additional state financial aid, a 42 percent increase over the roughly $100 million in the current budget. Need-based aid would get a $30 million, $5 million would be used to restore the state’s defunct merit aid program and work-study would get a $5 million boost.

As it happened, the Colorado Commission on Higher Education met Friday afternoon and got a report on the governor’s plan. Commission chair Dick Kaufman said, “We’re pleased the governor is supportive of the statewide goals of preserving access by controlling tuition increases and increasing financial aid. Doing so will allow us to increase the number of Coloradans with college degrees, thus strengthening our workforce.”

The budget plan has less dramatic news for K-12 schools, proposing a $258.4 million increase in what’s called Total Program Funding, which covers classroom and administrative operating costs. (No additional caseload funding is proposed for the Colorado Preschool Program.) Total program, a combination of state and local revenue, this year is about $5.5 billion. The increase would amount to $223 per student on top of the current $6,652 statewide average.

About half the increase would be supported by the State Education fund, a dedicated account used to supplement school funding. The administration said that’s because money from the state’s main account, the General Fund, needs to be freed up for disaster recovery.

The education fund currently has a balance of more than $1 billion, and the administration would like to leave $700 million in the account at the end of 2014-15. Hickenlooper’s longer-term goal is that the fund balance never dips below $400 million.

The required Nov. 1 release of the budget marks the unofficial start of the legislative “preseason,” the period after the election and before Christmas when the Joint Budget Committee begins hearings and when lawmakers begin polishing up bills ahead of the legislative session’s January start.

Amendment 66, the proposed $950 million income-tax increase for K-12 schools, looms large over this year’s announcement. Passage of the plan won’t necessarily have a major impact on 2014-15 school spending. That’s because A66’s companion school-funding formula, Senate Bill 13-213, won’t kick in until the 2015-16 school year.

But A66 approval by voters might mean some adjustment in 2014-15 spending, because the amendment requires that at least 43 percent of General Fund revenues be devoted to schools. (As it happens, Hickenlooper’s budget proposes spending 43 percent of General Fund revenues on K-12.) And because the new revenue would start flowing into state coffers Jan. 1, SB 13-213 includes provisions that require placing revenue earned between then and June 30, 2015, in four reserve accounts.

Voter rejection of A66 could spark major debates in 2014 over use of the State Education Fund as education advocates look for additional K-12 funding. Many district officials and some legislators were unhappy after the 2013 session closed because Hickenlooper and legislative leadership made only modest use of the fund and didn’t increase 2013-14 school funding as much as many advocates had hoped.

Sobanet and Roxanne White, the governor’s chief of staff, said they’d have more to say on A66 issues next week after the election is over and the result is known.

The governor’s budget is the start of a long process that won’t end until lawmakers approve a final 2014-15 budget late next April. Given the legislature’s constitutional budgeting powers, significant changes often are made in the governor’s plan.

A year ago, Hickenlooper proposed a K-12 increase of $201.6 million in 2013-14, plus a $30 million boost for higher education. That amounted to a 4.8 percent increase in all state K-12 spending and a 2.3 percent boost for state colleges and universities.

In the end, the legislative approved Total Program Funding of $5.5 billion, an increase of about $210 million with a per-pupil increase of some 2.7 percent.

The 2013-14 school finance law made only a small bite in what’s called the negative factor, a mathematical formula used by the legislature to reduce school funding from what it would have been under the full terms of Amendment 23, the 2000 constitutional amendment that currently guides education funding.

Hickenlooper’s 2014-15 plan would leave the negative factor at just under 15 percent. This year it’s just above that percentage. It’s estimated that use of the negative factor over the last several years has cut K-12 funding by more than $1 billion from what it otherwise would have been.

Hickenlooper himself made no public comment on the budget plan Friday but will present it to the budget committee and answer questions during a hearing next Thursday morning.

The governor’s total budget proposal is $24 billion, including $9 billion from the general fund. His plan amounts to a 4.5 percent increase.

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