To address a looming $1.7 billion budget shortfall predicted for 2011-12, state legislators put forth a plan last week that would give colleges more freedom in setting tuition and other financial transactions.

Higher education in Colorado is facing additional cuts when federal stimulus funding, which has kept public institutions from dropping below 2005-06 funding levels, runs out. Institutions are facing a projected $300 million cut in state funding next year-- roughly half of their total state funding.

Senate Bill 10-003, sponsored by Sens. John Morse (D-Colorado Springs) and Josh Penry (R-Grand Junction), would let colleges raise their tuition up to 9 percent per year without approval from the legislature, and allow larger increases with approval from the Colorado Commission on Higher Education (CCHE). The tuition-specific provisions of the bill would be repealed after four years, per an amendment backed by Gov. Bill Ritter.

In its current form, the bill would require institutions seeking to raise their tuition by more than 9 percent per year to submit a financial and accountability plan to the CCHE detailing the increase and showing how they would increase access to Colorado residents; improve student success, including employment after graduation; improve quality of services and instruction; and improve efficiency. In addition, institutions would need to show how access and affordability would be maintained for low- and middle-income students.

Colleges and universities would also receive more fiscal flexibility under the bill, with exemptions from state central purchasing requirements and restrictions on the rehiring of retired employees, as well as the ability to manage their own debts, contracts, construction projects and real estate transactions.

President Stephen Jordan and other administrators have been meeting with legislators and other higher-education leaders to weigh in on the bill's provisions. "Given the current economic circumstances that the state is facing, this bill provides a significant short-term relief valve. It doesn't create a substitute for long-term support, which given the five-year sunset that appears to be the goal,"says Jordan.

The bill -- with amendments-- won the unanimous approval of the Senate Education Committee on Thursday, April 29, and passed in the full Senate on second reading on Tuesday morning, May 4. Assuming it passes out of the Senate on third reading, it will then have to go through the same process in the House in order to pass before the legislative session closes on May 12.