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Higher Ed Cuts Prompt Budget Reform Calls

Colorado ranks near the bottom nationally for higher education funding. And colleges and universities are bracing for yet another round of deep budget cuts.  It’s thought that most could see anywhere from a 15-20% cut later this spring, as federal stimulus money that had staved off layoffs and further tuition increases runs out. 


Governor John Hickenlooper has made higher education one of his top priorities in his administration’s early days, making pitches like this at economic and business summits around the state.

“There is no closer correlation to our future economic growth, than our investment in higher ed,”  Hickenlooper said last week at the University of Denver.

But the new governor has so far balked at pushing for a tax increase to help shore up funding for colleges and universities, something students are frustrated over.

Closing Off Access

Corey Wiggins could be the face behind Colorado’s shrinking support for higher education.

“We’re actually at the Center for Multicultural Affairs here at CU, and it’s one of the two jobs that I have to be able to pay to go to school here at CU,” he says, while taking a break from his work-study job.

Wiggins, a junior at the CU-Boulder campus, has all the energy and optimism of any 20 year old. But he also has the almost ubiquitous pessimism you’ll find these days among students like him who pay in-state tuition.

When he was a freshman, he paid about $7,200 a year.  It’s now $8,500 and climbing.

“That just shows over three years, someone who didn’t even have to have a job their freshman year to pay for college, now has to work two jobs to pay for college,” Wiggins says. “It’s a pretty big indicator of the issue.”

Higher Ed as Economic Stimulus

The issue is a precipitous decline in state funding for higher education…Now less than 5% of the total funding pie at the major state universities like CU.  And Wiggins shouldn’t expect it to get any better anytime soon.

“Well, they’re in fact right, we are increasing prices dramatically on students,” says Lieutenant Governor Joe Garcia. 

Garcia is crunching the numbers in his wood paneled office in a corner of the state capitol, and things don’t look good he says, especially for smaller colleges that can’t rely so heavily on income from out of state tuition. 

“People look at higher education and think, the only people who benefit from an investment in higher education are the individuals who receive the degrees, and clearly that’s not the case,” Garcia says. “Those individuals who receive those degrees then can get higher paying jobs, start businesses and give back to the economy.”

When Governor Hickenlooper tapped the former CSU-Pueblo president Garcia to also serve as the Commissioner of Higher Education it was widely seen that higher education would be a top priority of the new administration’s.

“The governor’s focus has been to increase economic activity,” he says. “If we have more people working, more people paying taxes, more people buying things, that generates more revenue that can then be distributed to higher education.”

Tax Reform Push

Under the state’s confusing tax laws, higher education funding is one of the only things lawmakers can dip into to fund other programs during bad economic times.  Unlike K-12 - which is guaranteed funding by a constitutional amendment – there’s nothing protecting higher-ed.  This has some interest groups floating possible ballot measures to change that, and create a dedicated tax for higher education.

But careful what you wish for, says Frank Waterous, a senior analyst at the Bell Policy Center, a non-profit think tank that advocates for reforming Colorado’s budget laws.

“The more we ask people to say, well this is more important than another, or that we create dedicated funding streams,  we think we don’t really tackle the comprehensive problem that we have in the state with funding public services and programs,” Waterous says.

So Waterous is pushing for a larger, structural fix to the state’s budget woes, because even if tax revenues rebound, another future recession could put higher education right back where it is now.  To this end, an overhaul of laws like 1992’s TABOR Amendment, or the Taxpayers Bill of Rights, is gaining some political momentum. 

Privatization Sought

But count on a bitter fight with the state’s powerful anti-tax groups who meantime have their own proposals for fixing higher ed. 

Barry Poulson, a senior fellow at the Golden-based Independence Institute and economics professor at the University of Colorado, recently told a panel of Republican lawmakers universities could save money by outsourcing their non-academic services to private companies, among other things.

“These institutions are going to have to become entrepreneurial,” Poulson said. “They’re going to have to be out there aggressively seeking research funding, private funding, other sources of revenue.”

Indeed, at large universities like CU and Colorado State University, research funding is up as are private donations. Schools have also frozen most hiring; the latest was the University of Northern Colorado last week. 

Budget managers say they’ve also been ratcheting down spending during the three years of stimulus money in order to avoid what they say are Draconian tuition increases, like those that sparked sit-ins and protests last year at the University of California.

Back at the state capitol, Lieutenant Governor Garcia says he’s surprised the same level of uproar hasn’t already happened in Colorado.

“I think we will hear more from them in the future,” Garcia says. “Because we will see tuition increase incrementally, sometimes double digit rates in the coming years, unless we find another source of revenue to support those schools.”

But Garcia says the new administration hasn’t yet made up his mind about whether to sign off on a ballot measure, or stick to the initial plan to boost the economy to in turn boost revenues.

Governor Hickenlooper will release his budget and proposed cuts to shore up a projected $1.1 billion shortfall next week.