Date: 04/07/2014

Final
BILL SUMMARY for HB14-1319

HOUSE COMMITTEE ON EDUCATION

Votes: View--> Action Taken:
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02:00 PM -- HB14-1319

The committee came back to order.

Speaker Ferrandino, co-sponsor, introduced House Bill 14-1319, which changes the way the state funds institutions of higher education. The new model emphasizes funding based on performance metrics set by the General Assembly and the Colorado Commission on Higher Education (CCHE). The Speaker discussed the strike-below amendment (Attachment D), his interest in higher education funding, the current method for funding institutions of higher education, the influence of the Taxpayer's Bill of Rights (TABOR) on higher education funding, and the components of his proposal. He discussed his goals of increasing the number of certifications and degrees attained by Colorado residents. He explained that the bill provides six factors for role and mission funding, four of which are dictated by the General Assembly; and six factors for performance, two of which are dictated by the General Assembly. The remaining factors will be determined by CCHE.

14HseEd0407AttachD.pdf14HseEd0407AttachD.pdf

Speaker Ferrandino discussed the safeguards in the bill for institutions worried about losing funding and his goal of creating a funding mechanism tied to rational policy-making. He argued that the General Assembly's focus should shift from what institutions need to what the state and students need.

Representative Holbert, co-sponsor, discussed his involvement in creating the bill and the economic modeling done by staff of the Joint Budget Committee and Speaker Ferrandino. He applauded Speaker Ferrandino for his efforts to find a better way to apply higher education dollars. He discussed the differences in higher education funding and K-12 funding. He described his enthusiasm for a policy in which institutions would receive higher levels of funding for students who stay and complete their programs of study. He recognized the time that Speaker Ferrandino spent on the bill both before and since introduction, his efforts to listen to stakeholder concerns, and his efforts to put together the strike-below amendment (Attachment D).

The co-sponsors responded to questions from the committee regarding the metric of completion rates, funding levels, the reasons for dropping out, the retention metric, the role of the state in demanding accountability, and earmarking money.

The following people testified:

02:42 PM -- Lieutenant Governor Joseph Garcia spoke about the bill. He discussed the Speaker's efforts to listen to stakeholder input and the General Assembly's interest in higher education. He explained that Colorado's higher education system consists of public colleges and universities managed by individual governing boards. He pointed out that the Department of Higher Education (DHE) is a statewide coordinating agency, not a governing body. He mentioned internal inconsistencies in the bill, as well as agreement between the bill and the statewide master plan for higher education. He explained the state's need for increasing degree production and traced the history of the College Opportunity Fund (COF).

He discussed the impact of the economic recession on higher education funding and how previous budgets defunded new enrollment. He pointed out that institutions with high rates of growth saw more cuts to funding, since they could raise their own revenue. He asserted that DHE and CCHE have played active roles in overseeing the financial health of institutions during a time of unprecedented economic challenge. He discussed three groups of higher education institutions in Colorado:

Lt. Governor Garcia shared DHE's observations on finance policies and discussed the efficiency of Colorado's higher education system, measured by degrees produced per $100,000 of funding. He argued that placing a cap on tuition growth should lead to a cap on enrollment or the closure of some institutions. He discussed other implications of changing the funding model. He explained that low-enrollment rural institutions would suffer most under the provisions of HB14-1319. Lt. Governor Garcia responded to questions from the committee.


02:59 PM

Speaker Ferrandino responded to Lt. Governor Garcia's remarks.


03:01 PM

Lt. Governor Garcia continued to respond to questions from the committee. Chad Marturano, legislative liaison for DHE, responded to questions from the committee. Speaker Ferrandino added his comments.


03:13 PM

Lt. Governor Garcia continued to respond to questions from the committee. Committee discussion ensued, with the participation of Speaker Ferrandino and Lt. Governor Garcia.

03:24 PM -- John Johnston, a student at Metropolitan State University (MSU), testified in support of the bill. He described his experience as a veteran and student.

03:28 PM -- Stephen Jordan, President of MSU, testified in support of the bill. He described his concerns about Colorado's current funding methodology and posited that MSU is the lowest-funded public four-year institution of over 15,000 students in the United States. He described his suggestions for a changed funding structure. He pointed out that schools with the most challenging students are the least funded. He discussed his agreement with Speaker Ferrandino on providing incentives to institutions by placing 24 percent of each school's funding at risk based on performance. He stated that the bill aligns the instrument of public policy (the budget) with the stated policy goals of the state. He called attention to the bill's stopgap language for a phased-in approach. He discussed the fine line between creating a reliable methodology of resource allocation and mitigating against unintended consequences in the early years of this approach. He asked the committee to consider amending the bill to provide greater latitude for adjustments in early years. President Jordan responded to questions from the committee and explained that MSU is one of most efficient institutions in the state, but that it has one of lowest retention rates. President Jordan continued to respond to questions from the committee.

03:39 PM -- Nick Shaffer, representing himself, testified in support of the bill. Mr. Shaffer responded to questions from the committee.

03:52 PM -- Frank Waterous, representing the Bell Policy Center, testified in support of the bill, as amended. He distributed his testimony to the committee members (Attachment E).

14HseEd0407AttachE.pdf14HseEd0407AttachE.pdf

03:59 PM -- Ed Bowditch, representing Fort Lewis College, expressed concerns about the bill's implications for rural schools. He distributed a series of charts (Attachment F) and discussed the charts.

14HseEd0407AttachF.pdf14HseEd0407AttachF.pdf

04:04 PM -- Brad Baca, representing Western State Colorado University, discussed the strike-below amendment (Attachment D) and how it addresses his initial concerns. He described his apprehension about having percentages legislated and explained that DHE is better positioned than the General Assembly to address complex issues.

04:05 PM -- Bill Mansheim, Vice President of Finance at Adams State University, spoke about the bill. He discussed variable funding at different institutions and the challenges faced by rural higher education institutions. He pointed out that the bill would shift funding away from rural institutions. He discussed recent cutbacks at Adams State. He asked the committee to consider changing some provisions in the bill to protect institutions and to allow for greater flexibility.


04:11 PM

The preceding three witnesses responded to questions from the committee.

04:21 PM -- Dawn Bookhardt, Vice Chair of the MSU Board of Trustees, spoke in favor of the bill. She discussed the bill's importance to MSU and how its provisions would benefit the school.

04:25 PM -- Todd Saliman, representing the University of Colorado (CU), told the committee that the University of Colorado maintains a neutral position on the bill. He distributed a handout to the committee (Attachment G). He talked about tuition impacts that will be faced by access institutions if the bill is passed, and stated that the university will need to raise tuition rates in response. He discussed how the bill would impact every campus of CU. He asked committee members to focus on policy goals, such as investing in access institutions, without cutting funding to CU. Mr. Saliman responded to questions from the committee.

04:40 PM -- Rich Sweigert, Chief Financial Officer of the Colorado State University system (CSU), spoke about the bill. He discussed his support for the graduation and retention provisions of the bill, but expressed interest in added flexibility.

04:42 PM -- Mark Superka, representing the Colorado Community College System (CCCS), testified in support of the bill. He discussed the bill's impact on community colleges.

04:44 PM -- Dick Kaufman, Chair of CCHE, spoke about the bill. He discussed COF stipends and why some institutions get more money than others. He asked the committee to consider the circumstances of each institution and how they differ. He pointed out that lower enrollment does not mean proportionally lower costs. He spoke about Senate Bill 14-001. He discussed how CCHE gave some schools dispensation to raise tuition more than six percent and explained that if both bills pass, there will be an immediate need for tuition adjustment. Mr. Kaufman responded to questions from the committee.


04:51 PM

With no further witnesses, Representative Hamner closed public testimony. The co-sponsors requested that Representative Hamner lay the bill over for action. Speaker Ferrandino and Representative Holbert offered closing comments.


04:58 PM

Representative Hamner laid the bill over to a future date. Representative Hamner reopened testimony for a final witness.

04:58 PM -- George Walker, representing himself, testified in opposition to the bill. He discussed students of color and discrimination. He discussed the need for more funding at higher education institutions.


05:04 PM

The committee adjourned.