Date: 02/04/2015

Final
Presentation by Lieutenant Governor on new higher education funding model

COMMITTEE ON JOINT EDUCATION

Votes: View--> Action Taken:
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11:28 AM -- Presentation by Lieutenant Governor on new higher education funding model

Representative Buckner, Chair, welcomed the committee and audience members. He asked committee members to hold their questions until the end of the Lieutenant Governor's presentation.

Lieutenant Governor Joe Garcia greeted the committee and discussed the slides he distributed (Attachment A). He discussed statewide goals for higher education and the directives contained within House Bill 14-1319, which altered the higher education funding model for the state of Colorado. He discussed the reasons behind the creation of the funding model and the focus of the state's higher education plan, including the future labor market in Colorado. He discussed educational statistics for Colorado. The Lt. Governor spoke about the number of jobs in Colorado that will require post-secondary education in the future, and how this has changed over time. He discussed the different types of institutions in Colorado, and how the state had to consider all types when formulating statewide goals for higher education. He discussed the need for fewer and clearer goals when formulating the higher education master plan.

JtEd0204AttachA.pdfJtEd0204AttachA.pdf

The Lt. Governor explained the four goals behind the state's new funding model:

• increase attainment of high quality post-secondary credentials;
• increase student success;
• reduce attainment gaps; and
• restore fiscal balance.

The Lt. Governor discussed demographics and attainment, and the fiscal balance between state appropriations and tuition. He discussed the previous financing model that existed from 2004 to 2014, including College Opportunity Fund (COF) stipends, which depend on enrollment, and fee-for-service contracts, which do not. He explained the new funding model, which will emphasize transparency, target resources toward policy goals, and change institutional behaviors to emphasize student success. He discussed the legislative directives in HB 14-1319, which mandate that the state must balance allocations, require COF stipend amounts be 52.5 percent of the total state appropriations, and require that factors and metrics are tied to policy goals. He discussed other states that have moved toward performance based funding for higher education. The Lt. Governor stated that only Colorado has moved to 100 percent performance based funding, and only Colorado has made the change in one year.


11:41 AM

The Lt. Governor went over the implementation process after the passage of HB 14-1319. He stated that the bill was signed into law in May 2014, and the deadline for creating the funding model was January 15, 2015. He provided an overview of the project, including information about support from outside organizations, models from other states, and how the Department of Higher Education (DHE) engaged the public. He discussed the process of creating the new funding model, three working groups, and the Executive Advisory Group. He explained the amount and type of public feedback, which focused on affordability, improving the on-time completion rate, providing services to low income and minority students, and maintaining access for all geographic areas.

The Lt. Governor discussed completion rates, and how those rates are calculated.

He explained the funding allocation model. He discussed the role and mission factors, which include weighted credit hours, pell-eligible and underserved students, and tuition stability factor. This last amount of money is to make sure that tuition is kept stable at institutions that would otherwise lose money and have to raise tuition. He discussed the attainment gap in Colorado, including the percentages of various population groups that have a post-secondary degree. He discussed the effect of attainment on unemployment rates and stated that Colorado has widest gap in attainment rates of any state in the country. The Lt. Governor stated that the department considered cost models in other states, and that it put additional money into courses that are more expensive to offer and where the state has higher need. He discussed the department's efforts to reward performance.


12:02 PM

The Lt. Governor discussed the idea of recognizing metrics aligned with specific state goals. He discussed different institutions that get higher or lower percentages of their budget from state allocations and explained how the funding model helps achieve statewide workforce goals. He explained how small and rural institutions help meet these goals and why the governor's total budget request is $75.6 million and how those funds will be divided.


12:09 PM

The Lt. Governor responded to questions from the committee. They discussed the involvement of governing boards, the link between remedial education and the time it takes to earn a degree, outreach efforts, the attainment gap, and how higher admission standards lead to higher on-time completion rates. The committee and the Lt. Governor discussed the delicacy of the final agreement and compromise. The Lt. Governor stated that governing boards have signed onto the final model, but that any change to factors would cause the current agreement to collapse.