Dec 072004
Authors: Lila Hickey

"Enterprise status" is a phrase students may hear often in regard to CSU's recent budget cuts – a phrase and an idea that many universities see as a way to increase revenue in financially difficult times.

Higher education institutions across the state are receiving reduced funding because of the clash between the Taxpayer's Bill of Rights and Amendment 23 – the former requires the state to return any surplus revenue to taxpayers, while the latter necessitates yearly increased funding for K-12 education.

Enterprise status, once attained, would allow institutions to be treated as private institutions by the state legislature because they would receive less than 10 percent of their funding from the state. This would allow qualifying universities to increase tuition rates by more than the current maximum rate of inflation, as well as receive exemptions to some of the legislature's funding regulations.

Last year, the University of Colorado-Boulder received enterprise status from the state legislature and raised tuition by 12 percent, the largest increase in Colorado that year. This year, many more are expected to follow.

"Every college and university in the state will likely be considering enterprise state effective July 1, 2005," said Ed Bowditch, vice chancellor for administrative affairs at CSU.

This sudden shift is the result of changing funding from the state, which will make the majority of Colorado's higher education institutions eligible for enterprise status in the coming year. This year, the state is introducing student vouchers to universities as a new funding method for higher education. The vouchers will come from the College Opportunity Fund and will allot Colorado high school students stipends to attend in-state institutions. This financial shift will alter institutional funding so that many Colorado universities will drop below 10 percent because the money from students would not be considered state revenue.

It will not be hard for CSU to gain enterprise status, said Maria Bennett, director of legislative affairs for the Associated Students of CSU.

"Basically, right now, CSU is sitting a little above 10 percent funding from the state," Bennett said. "We're going to dip below that in a heartbeat. It's going to give."

CSU's administration seems to agree – it has already submitted a performance contract proposal to the Colorado Commission on Higher Education. This is the first step in attaining enterprise status.

The contracts differ from institution to institution and will specify certain responsibilities the university must maintain to keep its enterprise status.

"There are a number of areas that CCHE is requesting performance guidelines from the university in," Bowditch said.

Katie Clausen, president of the Associated Students of CSU, called the contract a tradeoff.

"It gives the schools power and it gives the state power," she said.

For the state, she said, the contract will allow a measure of control over CSU in academic directions and actions. For the university's administration, the contract would allow more freedom to set tuition rates.

CSU is involved in performance contract negotiations with the CCHE to receive enterprise status beginning in July 2005.

"We're currently in negotiations (and) they're going well," Hopfer said.

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