Call to Order
INTERIM COMMISSION TO STUDY FISCAL STABILITY
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09:11 AM -- Call to Order and Opening Remarks
Senator Heath called the meeting to order.
A copy of the presentation prepared by the Colorado Department of Higher Education was distributed to commission members (Attachment A). Following opening remarks, Senator Heath introduced Mr. Bruce Benson, President of the University of Colorado.
09:12 AM -- Higher Education
President Bruce Benson began the conversation by explaining he would provide details, not just regarding the University of Colorado at Boulder (CU), but also to address the needs of higher education in general and to determine ways to fund it. Members also received two handouts, including one about the impact of budget cuts on CU's Appropriations (Attachment B) and one about undergraduates that receive financial aid (Attachment C). Mr. Benson discussed the decreasing budget trend for higher education, adding that the Governor is applying federal funds to help fund higher education, but noted federal funding will end in 2011. He suggested solutions needed to be found, especially if the economy does not rebound quickly. Mr. Benson added he does not believe that CU should be privatized. He discussed the measures that he has already taken due to the declining budget, including two budget cuts, and is anticipating more cuts. In addition, CU is sharing services with other campuses to reduce costs, and has evaluated other areas where costs can be reduced.
Mr. Benson discussed other considerations that could work for CU and possibly other colleges, including implementing fewer state regulations (particularly related to purchasing land), setting tuition, and modifying the enrollment mix. He noted that while higher education is looking at affordable and flexible options for tuition, a study is being done to make tuition payment options available to all students. A question was asked about short term versus long term solutions. Mr. Benson suggested CU had already been working on long term solutions before the interim commission began, by looking at other possible programs and other states' programs. He added the solutions that CU is applying today are intended to make the system both more efficient in the short run as well as more effective in the long run.
Mr. Benson elaborated on the idea of purchasing land more independently to reduce costs. He also explained that many choices that the state will have to make will have to go to the voters. Discussion ensued regarding how to get information to the public for support. Mr. Benson stated CU has worked on ballot initiatives in the past and believes it requires visiting areas around the state, making use of TV, radio and other avenues of public awareness. These discussions cover issues not only related to CU but also for higher education in general, noting educational programs could include courses at community colleges that can be combined with programs at other institutions. In terms of accountability, Mr. Benson suggested all avenues should be explored, which includes putting strict measures and standards in statute that help get students in college and keep them in. He noted that beyond student access to a higher education, administration accountability may be more difficult to increase efficiency.
A panel that included Ms. Inta Morris, Acting Executive Director of the Colorado Department of Higher Education, and Mr. Jim Polsfut, Chairman of the Colorado Commission on Higher Education, discussed the details of what an ideal higher education system would be and what it would cost. Ms. Morris provided an overview of the Colorado Paradox, which is discussed in the presentation handout (Attachment A). Mr. Polsfut explained statistics regarding the number of students in attendance (160,000), and the graduation rate (58 percent). The paradox is that the state ranks high in per capita income but low, and in some cases the lowest, in student post-secondary attainment, state support per student, and the gap in achievement between the majority and minority ethnicities. Ms. Morris noted that the category where Colorado ranks the lowest (ethnic gap) is the part of the population that is growing the fastest.
Mr. Polsfut discussed other slides in the presentation handout covering revenue and state and federal operating funds. He noted that the proportion of the state General Fund budget spent on higher education has decreased over the years. He also discussed state rankings on productivity and total funding per degree. While institutions of higher education have become efficient with the resources they have, the consequence can be seen in lower levels of productivity as class sizes reach capacity and facilities become less capable of accommodating all students. Dr. Nancy McCallin, President of the Colorado Community College System, discussed the overload in the community college system, noting there is unprecedented growth. Mr. Polsfut continued to discuss the growth of different types of grants and the volatility of capital construction.
The panel responded to commission questions. On the ethnic issue, it was noted there are communication and funding complications, some stemming from K-12 education. Some higher education facilities, such as Metropolitan State College of Denver (MSCD), have taken extra measures to accommodate ethnic differences in the student population. In terms of output and success, criteria measurements are changing to chart the number of students that successfully make it through each year. The community college system is the pipeline for specialized business degrees required for jobs in which demand is increasing the fastest.
Discussion ensued on the ethnic gap and whether it includes those students that drop out of high school. Also discussed was the cost that parents have to pay and the debt students will have to pay when they graduate. In some cases, it costs significantly less to attend college in another state such as Kansas or Nebraska. Many states put more funding toward higher education and rely less on tuition, whereas CU and Colorado State University rely more on tuition.
The commission discussed various grants. Funds for need-based grants are provided by the state, per the state legislature. The panel offered to provide more information on financial aid and fees and all other funding sources, noting additional data will be available in December. Projections show $3 to $4 million dollars will come from state gambling for the community college system. The community college system's budget, however, was cut 40 percent. Also discussed was the low number of merit-based grants, which have been eliminated. This was a decision made by the legislature in order to fund need-based grants.
Commission discussion ensued about the possibility of public-private partnerships. The commission recessed.
The commission reconvened.
Discussion ensued regarding the amount of subsidies, the cost of education, and the availability of scholarships. Ms. Kay Norton, President of University of Northern Colorado (UNC) explained UNC develops their pricing strategies, which are commonly changed in order to accommodate the students they want or need to attract. She noted that tuition is the biggest funding source, and that UNC adjusts tuition upward in order to accommodate funding requirements for other students. In California, tuition is free but fees are in the tens of thousands, and due to budget issues they will raise tuition 30 percent. In Colorado, when state investments in higher education decrease, students pay more. Operating costs are a significant driver of tuition increases.
Senator Heath summarized where Colorado is in terms of funding higher education, suggesting the state is funding it at a minimum. He asked whether the question, "Do we want a system of public higher education in the state?" is a fair question. The commission discussed the fact that Colorado relies on in-migration to provide labor to the state. Dr. Nancy McCallin posed the question, "Can we continue to rely on in-migration in the future with the population again and mobility decreasing?" She stated that currently the community college system pays full-time professors very low wages. Adjunct faculty are paid even less. She added that due to the drop in state funding, classes have to be cut. She further noted the nursing program is a high-cost program and, with no funding to expand the courses, there is a long waiting list just to get into nursing school.
Dr. Kirvin Knox, having prior academic background, noted Colorado has a system that is based on an old model which is not sustainable and that needs to be changed. Senator Brophy expressed his views about the tax burden on Colorado citizens and the allocation of tax revenue. He said the tax burden on citizens throughout the nation is approximately 9 percent (total state and local), but with Colorado's high income, tax revenue should be higher than in other states. But it is the case that Colorado is having a problem with funding higher education. He stated that Colorado is not allocating resources very well.
Discussion ensued on allocating resources, noting the state needs to allocate resources better with the long-term in mind. Decisions need to be made, including whether or not the state wants to provide all programs to all possible students. Also, MSCD now offers a masters program, approved by the legislature in the last session. A question was asked whether this meant the state is duplicating services that University of Colorado at Denver can provide. MSCD does get federal funding to provide a masters degree for minority populations, and currently, colleges are doing anything they can to generate revenue, including offering the courses that attract federal funding. It was noted that currently, the state is funding its institutions $750 million short of the average across the nation. The American Recovery and Reinvestment Act (ARRA) money will be available for only two years, and then the funding will no longer be available. State funding typically goes to faculty wages, which at UNC is 55 percent of its operating costs. The commission discussed the question, "If the state wants to be better than average, what would the state have to pay, and what would it get back in return in terms of lower crime rates and healthier citizens?" Vermont is one such state that has a high quality higher educational system and lower crime rates and healthy citizens.
Ms. Morris provided a description of the difference between the Colorado Department of Higher Education and the Colorado Commission on Higher Education. Ms. Norton described how pay is established for attracting and keeping talented professors, and that pay for UNC professors is low. It was noted that the University of Wyoming has high salaries as an incentive to get professors. Dr. McCallin stated that salaries for faculty at community colleges is $42,000 and the national average for community college systems is $55,000.
Senator Heath summarized the amount of funding shortfall the state is facing just to continue providing an average higher education system, not taking into consideration growth in enrollment. He posed the questions: "What are we spending now?"; "What will we have to pay in 2 years when ARRA funds end?"; and, "What kind of educational system do we want?"
The commission recessed.