With the much-discussed “fiscal cliff” for higher education in Colorado looming larger than ever, state policymakers are hoping that statewide master planning efforts will help avert a catastrophe.
The consensus on the answer to the question “The Fiscal Future of Higher Education in Colorado: Peril or Possibility?,” the title of last week’s conference sponsored by the Higher Education Association of the Rockies (HEAR), seems to be, in a word, peril.
A lagging economy and decrease in general fund revenue
The national economy’s collapse in confidence has run its course and recovery, already underway, is likely to be slow, according to economist Tucker Hart Adams, who in 2007 quantified the economic impact of higher education in Colorado for the Department of Higher Education.
In a presentation aptly titled “The Colorado State Budget: The Mess We’re In,” Natalie Mullis, chief economist for the state’s legislative council, described how the state’s General Fund, from which higher education is funded, experienced a $1.2 billion shortfall last year. It is projected to have a shortfall of $1.7 billion in FY 2009-10, of which $561 million is still not addressed. Higher education is expected to absorb about 40 percent of this shortfall. Mullis said General Fund revenue is expected to recover very slowly over subsequent years (with likely shortfalls for a number of years), but it’s too early to predict these revenue amounts with any accuracy.
Since 95 percent of General Fund revenue comes from income and sales taxes, its shortfalls are a result of the reduction in the tax base, both from the sluggish economy and from tax cuts. State Rep. Jack Pommer, who sits on the Joint Budget Committee, said that tax cuts made in 1999 and 2000 reduced the state’s revenue, which has never been raised back again either through increased taxes or spending cuts. “TABOR (the Taxpayer’s Bill of Rights, passed in 1992) is no longer our problem. We’re way beyond TABOR – we no longer have revenue,” Pommer said.
Impact on higher education
In Colorado, with state funding waning and enrollment at public colleges and universities increasing, tuition has been on the increase. Patrick Kelly of the National Center for Higher Education Management Systems (NCHEMS) attributed this to “a combination of the flailing economy plus repeated, long-term disinvestment in higher education” in the state. Colorado ranks 50th in the amount of funding it receives for higher education from state revenues and tuition dollars.
Nancy McCallin, president of the Colorado Community College System, noted that last year, while the higher education budget in Colorado was cut by $280 million and funding was at the lowest level since 1993, enrollment was up (by 20 percent at CCD). Polling suggests no popular support for a tax increase to support K-12 or higher education, said McCallin, so the remaining revenue source is tuition increases.
Higher education in Colorado has never been highly funded, said Matt Gianneschi, education advisor to Gov. Bill Ritter. The state has a tradition of low funding from the state as well as low tuition, but now, with enrollment increases, the state is moving toward average tuition, he said.
The federal stimulus package is expected to buy Colorado a two-year reprieve from the most drastic reductions in state funding. NCHEM’s Kelly said that for most states facing budget gaps and most public institutions of higher education, federal stimulus dollars, while not a long-term answer, will slow the impact of decreased revenues, giving institutions time to adjust to substantially changed circumstances.
Meeting the state’s higher education needs
President Barack Obama has stated a goal of increasing college degrees in the United States, said Kelly, who cited the concomitant need to address demographic changes and access for distinct population groups and postsecondary services required. Colorado, for example, has the highest difference in college attainment between whites and ethnic minority groups of any state in the country.
Gianneschi said that to address these and other issues specific to higher education in Colorado, Ritter has requested that the Colorado Commission on Higher Education (CCHE) develop a master plan for higher education. The plan should address how to meet the collective needs for all levels and types of higher education in Colorado most effectively, and be in place by fall 2010. When the CCHE was established in 1986, it was charged with devising such a master plan, to be revised and reported on every four years. However, the most recent version was completed in 2001, before the College Opportunity Fund and Referendum C, among other policy changes, were enacted.
How successful these master planning efforts are over the next few years, when federal stimulus dollars can no longer prop up higher education spending, will likely determine whether there is “possibility” amid the “peril” presented by the fiscal situation for higher education in Colorado.
