Higher Education Situation

Oct 112004
Authors: Lindsay Robinson

Higher education institutions in Colorado have until July to

negotiate and finalize performance contracts with the state. These

contracts will allow them to be part of the voucher program enacted

under the College Opportunity Fund.

The contracts are still in the planning stages.

They will likely require schools to have a faculty

pay-for-performance plan in which the highest-meriting faculty

members get the most pay, said Amy Roberts, spokesperson for the

Colorado Commission on Higher Education. Schools may also have to

implement tuition increases in accordance with inflation and revise

the core curriculum to facilitate student transfer from one

institution to another.

The system for funding higher education in Colorado will undergo

major changes in the next school year with the enactment of the

opportunity fund, which is part of Senate Bill 189.

Beginning next fall, Colorado colleges and universities will no

longer receive a lump sum of money from the state. Instead, a

voucher for about $2,400 will be allotted for each student enrolled

at the university, Roberts said.

“State support will very directly follow student enrollment, so

if we are more successful in enrolling students we will attract

more money because the money comes directly with the students,”

said Provost/Academic Vice President Peter Nicholls.

The vouchers will not have a direct effect on how much students

pay for tuition.

“We were already receiving that money to help pay for your

education, but we’ll just be getting it in a different way,” said

Keith Ickes, interim vice president for administrative


Roberts said the law aims to create accountability. The vouchers

create “transparency,” she said, so students can see how the state

is directly contributing to their education.

Entering into this agreement would allow Colorado colleges and

universities to qualify for enterprise status.

Enterprise status allows schools to be free of restrictions

imposed by the Taxpayer’s Bill of Rights.

TABOR basically places a cap on the amount of tax money a

government entity can spend. This includes tuition, which is

considered state revenue. TABOR works in conjunction with Amendment

23 to decrease the amount of money higher education can receive

because Amendment 23 mandates that more of the state’s available

money be spent on K-12 education each year. This has caused higher

education to lose state funding in recent years.

The contracts will allow institutions to have more flexibility

in their revenue sources and money spending.

This includes giving schools the ability to raise tuition at a

higher rate than is currently possible under TABOR restrictions.

However, there will still be legislative oversight in tuition


“It’s still a public university and while the schools have

suffered budget cuts, they need to offer quality education, but

they still need to be affordable or you cut out a whole group of

students who can’t afford to go,” Roberts said.

In addition to the performance contracts, schools will negotiate

fee-for-service contracts, which help to fill the gap in revenue

between the lump sum of money currently given by the state and the

lesser amount allotted through individual student vouchers.

Under these contracts, the state will pay a school to maintain a

certain program, such as CSU’s Cooperative Extension program.

Fee-for-service contracts will also help fund graduate education

because the vouchers are only applicable for in-state undergraduate


However, while the College Opportunity Fund will free

participating institutions from TABOR restrictions – allowing them

to keep more of the revenue they earn and permit higher tuition

increases – Ickes does not think this will solve any monetary

problems in the state or at individual universities.

“It does not solve the state fiscal problem,” he said. “Under

TABOR, the state is running out of money.”

Government spending has to be decreased and budgets must be

re-evaluated and downsized, and the higher education budget is the

only one left to cut, Ickes said.

“While the opportunity fund finds a new way to give money to

higher education, it does not find any way to get the money, so we

will still have the same problem,” he said. “Unless something

changes, we’ll see less and less and less money coming to higher


Although future tuition hikes are probable under the contracts,

the money will likely be used to sustain the university at a level

near where it is today, Ickes said. New programs, smaller classes

and higher faculty pay are not expected to follow the tuition


“Tuition will have to go up, but students won’t get anything

extra,” he said. “The tuition will simply be replacing the money

the state gave us in the past.”

Nothing has been finalized yet, and contract negotiations

between individual schools and the state are just beginning.

“It’s a whole new way for the state to fund higher education,”

Nicholls said. “There are a lot of implementation issues that need

to be worked out, though, and we are in the middle of that process

right now. It’s a very interesting time as we at CSU try to figure

it out.”

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