How would Colorado’s public colleges and universities manage their budgets if state tax support were cut in half?
A new report from the Colorado Commission on Higher Education and college leaders warns of dramatic tuition increases; reduced access for minority and low-income students; a financial squeeze on middle-income students; reduced course offerings and bare-bones student services, among other consequences.
“We are near the tipping point where additional reductions in state support … will result in numerous negative outcomes for Colorado current and future students and families, hurting the economy and leading to a stagnant future,” Jim Polsfut, chair of the CCHE, wrote in a letter introducing the report.
The 51-page document also discusses at length the economic impact of higher education and its value to the state.
State funding for higher ed has been cut during both the recession at the beginning of the decade and during the most recent one. That has made students and parents, not taxpayers, the main source of college revenues. On average, state universities and colleges now charge about $3 in tuition for every $1 they receive from the state.
In the current, 2010-11 budget year, the higher ed system is receiving about $620.9 million in state and federal stimulus support, plus $82.5 million for student financial aid. Halving that support would yield $310.4 million for operations and $41.2 million in financial aid.
A law passed by the 2010 legislature gave colleges and the CCHE more freedom in setting tuition rates and also more flexibility in some other financial operations. The law also required the higher ed system to prepare the report on the impact of a 50 percent cut, which was submitted to the legislative Joint Budget Committee Wednesday.
Some higher education officials and college presidents weren’t enthusiastic about the assignment, feeling that there was little practical purpose – and perhaps some bad public relations – in such a hypothetical exercise.
There was some concern in the legislature last spring that the state’s bleak revenue outlook would force such deep cuts in higher ed for the 2011-12 budget year.
It’s uncertain now that the danger is quite so great. Outgoing Gov. Bill Ritter’s proposed 2011-12 budget is balanced, includes some $555 million in state support for higher ed and would force colleges to absorb “only” the loss of about $89 million in federal stimulus support. (Get details here about the Ritter budget plan.)
Here are snapshots of what campus leaders say a 50 percent cut would mean. (Enrollment headcount and budget numbers are rounded.)
University of Colorado System (56,400 students in Boulder, Denver, Aurora and Colorado Springs) – The summary predicts significant tuition increases for resident students (but no specific estimate), reduction in faculty, continued deterioration of campuses and “reduction in services throughout the campus ranging from student services, administration, to academic support such as for libraries and information technology.” (Current state and stimulus funding is $192.4 million, plus $19.5 million for financial aid.)
Chart shows what might happen to tuition and per-student state aid if taxpayers support of Colorado colleges is cut 50 percent. Click on image to enlarge.
Colorado State University System (30,500 students in Fort Collins and Pueblo) – “Larger increases in tuition coupled with budget cuts will diminish funding available for financial aid by more than 50 percent. … Drastic reductions will lead to double-digit across-the-board expense reductions, elimination of hundreds of positions and administrative department and program closures. Resident tuition rates will have to be increased significantly” (at least 32 percent at Fort Collins and 40 percent at Pueblo). “Class sizes will have to be significantly larger and resident enrollment may have to be capped.” (Current state and stimulus funding is $132 million, plus $12.2 million for financial aid.)
Colorado Community College System (85,500 students at 13 institutions) – “Budget cuts of this magnitude will dramatically impact the ability of our colleges to serve all Colorado students. … However, given our colleges’ socio-economic profiles and program offerings, these cuts will disproportionally impact our low-income, first-generation, rural, and Career and Technical Education (CTE) students.” (Current state and stimulus funding is $132 million, plus $25.4 million for financial aid.)
Metro State (23,000 students in Denver) – “An operating reduction of $19.8 million would dramatically restrict student support services, necessitate increased class size, reduce the number of course selections offered, limit personal attention from faculty and staff and restrict choices of academic programs.” A 72 percent tuition increase is predicted. (Current state and stimulus funding is $44 million, plus $11.7 million for financial aid.)
University of Northern Colorado (12,700 students in Greeley) – “A 50 percent cut in UNC’s state funding would severely limit the university’s capacity to serve low-income, first-time students, particularly those who are not the academic elite; necessitate larger class sizes and limitations on course offerings; harm our ability to recruit and retain the most qualified faculty; and result in lower student retention rates and longer time to graduation.” No tuition figure mentioned. (Current state and stimulus funding is $40.6 million, plus $4.6 million for financial aid.)
Chart shows decline in state per-student support and rise in tuition over the last decade. Click on chart to enlarge.
Adams State (2,800 students in Alamosa) – “A combination of reduction in workforce, freezing of wages over extended periods, elimination of programs and tuition increases in excess of 50 percent over a two-year period would be required.” Such a cut would “prohibit the development of an aid packaging model that meets the needs of low income students, depriving them [of] access to higher education.” (Current state and stimulus funding is $13.4 million, plus $1.9 million for financial aid.)
Colorado Schools of Mines (4,700 students in Golden) – Such a cut would “require tuition increases that could threaten our competitive market position and our stable enrollment, and possibly price a Mines’ education out of reach for many Colorado residents.” (Current state and stimulus funding is $21.4 million, plus $1.6 million for financial aid.)
Fort Lewis (3,700 students in Durango) – “The resident tuition increase required to bridge the gap quantified above would equate to 73 percent, or an additional $2,467 per resident student annually, including the financial aid increases needed to mitigate the impact on low and middle-income students. Alternately, since approximately 70 percent of the college’s general fund budget represents personnel costs, if a $5.7 million expenditure reduction was implemented, approximately 100 full time positions (21 percent) would be eliminated.” (Current state and stimulus funding is $11.5 million, plus $1.2 million for financial aid.)
Mesa State (7,000 students in Grand Junction) – “The answer to the hypothetical question posed seems obvious. If Mesa State College’s funding from the state of Colorado is cut by 50 percent, we will be forced to raise revenue, cut expenses and potentially sacrifice quality.” (Current state and stimulus funding is $20 million million, plus $3.3 million for financial aid.)
Western State (2,260 students in Gunnison) – “To offset a loss of $5.6 million in state appropriations (for operations) will require an average increase in tuition of approximately 60 percent. In addition to this offset, additional tuition revenue will have to be generated to cover financial aid losses and to help mitigate the impact of these rate increases on low and middle-income students. We anticipate that this could add a premium of another 30 percent to tuition rates.” Such cuts “would threaten the viability of the institution and create considerable strain on our ability to cover daily operational costs.” (Current state and stimulus funding is $11.2 million, plus $889,000 for financial aid.)
The study is the second major document on higher education released in the last week. A new higher education strategic plan covers many of the same financial challenges and recommends asking voters for a tax increase of some sort in 2011 to restore stable funding for higher education (see story for more details).
The two documents provide plenty for the 2011 legislature to think about, should it decide to take up the issue of higher ed’s future.
Higher education is not just a funding problem as we are learning from the University of California Berkeley. UC Berkeley’s Leadership Crisis
Chancellor Robert Birgeneau’s eight-year fiscal track record is dismal indeed. He would like to blame the politicians in Sacramento, since they stopped giving him every dollar he has asked for, and the state legislators do share some responsibility for the financial crisis. But not in the sense he means.
A competent chancellor would have been on top of identifying inefficiencies in the system and then crafting a plan to fix them. Competent oversight by the Board of Regents and the legislature would have required him to provide data on problems and on what steps he was taking to solve them. Instead, every year Birgeneau would request a budget increase, the regents would agree to it, and the legislature would provide. The hard questions were avoided by all concerned, and the problems just piled up to $150 million of inefficiencies….until there was no money left.
It’s not that Birgeneau was unaware that there were, in fact, waste and inefficiencies in the system. Faculty and staff have raised issues with senior management, but when they failed to see relevant action taken, they stopped. Finally, Birgeneau engaged some expensive ($3 million) consultants, Bain & Company, to tell him what he should have been able to find out from the bright, engaged people in his own organization.
In short, there is plenty of blame to go around. But you never want a serious crisis to go to waste. An opportunity now exists for the UC president, Board of Regents, and California legislators to jolt UC Berkeley back to life, applying some simple check-and-balance management principles. Increasing the budget is not enough; transforming senior management is necessary. The faculty, Academic Senate, Cal. Alumni, financial donors, benefactors await the transformation.
The author, who has 35 years’ consulting experience, has taught at University of California Berkeley, where he was able to observe the culture and the way the senior management operates