When Gov. Jared Polis released his proposed higher education budget last month, he told the Joint Budget Committee his goal was to make college more affordable by holding in-state tuition increases to 2%.
But the governor glossed over a key detail: His spending plan doesn’t actually provide Colorado’s colleges and universities enough money to do so.
In early budget writing discussions for the 2024-25 fiscal year, funding for higher education has emerged as a major divide between the state’s Democratic governor and lawmakers on the JBC who say Polis’ plan doesn’t provide enough funding.
Polis’ proposal does give the college governing boards a slight funding bump — $41 million, or a 2.9% increase over the $1.4 billion budgeted this year. But after a decade of low state funding and falling enrollment, that won’t come close to covering the cost of holding tuition increases to half the rate of inflation, as the governor has called for.
Rising costs mean colleges and universities will have to increase spending by more than what Polis is proposing just to maintain the status quo, lawmakers learned this month in a budget committee briefing. Salaries, benefits and other costs are projected to go up 3.8% next fiscal year, a figure that could rise even further if institutions of higher education implement a new pay plan for state workers.
Add it all up, and institutions could be as much as $133 million short of what’s needed to hold in-state tuition increases to 2%, according to a nonpartisan legislative budget staff analysis.
The governor’s plan calls for colleges to pass on $80 million of those costs to out-of-state students through a 6.5% tuition hike. The rest, he has suggested, could come through campus-level belt-tightening.
☀️ READ MORE
In Colorado, the governor’s budget proposal is just that — a suggestion that budget writers on the JBC can take or leave. But it’s a critical starting point, because lawmakers often defer to what departments say they need to fund public services and the governor’s priorities. The budget year starts July 1, and the spending plan must be approved by the legislature each spring.
JBC members have railed against Polis’ proposal, saying it would give public universities more incentive to chase wealthy out-of-state students instead of focusing on educating Coloradans. And that’s if the large tuition increase doesn’t discourage students from coming here. Out-of-state students already pay much higher tuition than Colorado residents.
The estimated cost of one academic year at CU in Boulder, including food and housing, is now $60,000 for out-of-state students vs. $31,000 for Coloradans.
“It’s not sustainable,” said Sen. Rachel Zenzinger, D-Arvada, the JBC’s vice chair. “I’m very frustrated by that proposal.”
But that’s not the only problem. The Colorado schools that rely the most on state funding don’t have many out-of-state students to lean on.
Overall, 34% of higher education funding now comes from out-of-state students, while in-state students provide 37%. Taxpayers chip in the remainder through the state’s general fund.
But the share of funding varies wildly from one institution to the next. For the state’s largest universities, out-of-state tuition now provides more funding than in-state students or Colorado taxpayers. At the other end of the spectrum, Metropolitan State University Denver and Colorado community colleges generate just 5% of their base funding from nonresidents.
For five of Colorado’s 10 institutions of higher education, including MSU Denver, Colorado Mesa University and the University of Northern Colorado, Polis’ budget proposal would require budget cuts to meet the in-state tuition target, the budget staff analysis suggests.
In response to questions from The Colorado Sun, Polis said smaller universities could cut back on costs by consolidating some administrative functions, but he did not offer specific examples of potential savings.
“We look forward to informing JBC in looking into different cost drivers in different institutions,” Polis said. “There’s economies of scale.”
He also suggested lawmakers could adjust the funding formula that divvies up money among the state’s public colleges and universities. “Some of the smaller schools — it’s broadly recognized — need to receive a higher level of funding to be able to maintain their services.”
The state already gives a larger slice of public funding per student to smaller schools. Lawmakers say the bigger problem lies with the size of the overall pie. Colorado provides less state financial support to public colleges and universities than almost any other state, and tuition costs have risen to the top five in the U.S.
In 2022, the state spent $6,711 per student, 34% below the national average of $10,237, according to the most recent annual funding data tracked by the State Higher Education Executive Officers Association.
The JBC will learn more soon. The Department of Higher Education — and university leaders — are due before the committee in January.