The legislative group charged with drafting the state’s budget unanimously recommended a potentially devastating $300 million slash to higher education Wednesday, which by itself could leave Colorado colleges in financial limbo — or worse.
As a part of that plan, the Joint Budget Committee, which writes the annual appropriations bill — the Long Bill — also plans to push for unprecedented leeway for starving schools like CSU to increase tuition substantially.
But members of the bipartisan committee say they hope to alleviate the $300 million hit to the already-crippled higher education system by absorbing money from an existing $700 million surplus in the state’s workers’ compensation fund.
In January, Gov. Bill Ritter recommended a $100 million cut to higher education, and last month, interim CSU President Tony Frank projected that figure would translate into a $13.1 million shortfall for CSU.
While some legislators are confident Wednesday’s proposed fiscal maneuver will not bankrupt universities, the JBC push would allow for universities to effectively increase tuition indeterminately.
In other words, state institutions could raise tuition as much as they want if Ritter signs it into law.
“I want each college or board of governors to be able to decide how far they can push tuition and still give flexibility to the students they need to give flexibility to,” said Don Marostica, the Larimer County representative on the JBC.
Officially, the JBC voted to increase state universities’ spending authority — the current cap is 6.5 percent each year — to 9 percent, Marostica said.
For in-state CSU students, that could translate into a 30 percent tuition increase — or a $1,327 hike — for fall 2009.
But under the new plan, schools that wish to test the market and raise tuition, say, 20 or 30 percent, legally could.
If a school chooses to go beyond the official state cap and tanks because of a drop off in enrollment, Marostica said the state wouldn’t bail that school out.
Universities will now be able to push tuition increases to “where they feel the market will bear,” he said, and the state will only cover financial aid packages for upsurges up to the 9 percent limit.
As for the $300 million cut and swap, State Rep. John Kefalas, D-Fort Collins, called the plan a “smart and creative” attempt to solve funding woes and said he would fight “tooth and nail” to ensure colleges would not take the hit.”With this backfilling, that cut will not happen,” said Kefalas, who sits on the House Appropriations Committee, which will review the JBC’s changes to the Long Bill in coming days.
But Marostica said the transfer of funds away from Pinnacol Assurance, Colorado’s compensation insurance agent, have a “really small chance” of happening, and he said he anticipates a legal battle.
“Even if we go into the courts, we’re two years away from a verdict that (the JBC)has a 20 percent chance of winning,” Marostica said.
While the lawsuit may take years, the $300 million cut would take effect in June.
He also noted that the $300 million cut is “imminent” and that he believes the state will lose some smaller colleges and universities in the budget cutting process.
“The cuts may be even greater,” he said.
John Straayer, a CSU political science professor, said late Wednesday, “The train has wrecked.”
“I think we’re there now, and I feel for those people on the JBC,” he said, adding that those legislators have the six hardest jobs in the state. “They don’t know what the hell to do.”
Straayer called restrictive amendments like the Tax Payer’s Bill of Rights, which ties the state’s hands from increasing taxes to bail out higher education, “a ticking time bomb” for higher education.
“I think (the cuts are) a tragic but almost predictable consequence of a disastrously dysfunctional fiscal policy in Colorado,” he said. “We keep putting bandages on without getting the antiseptic out and fixing the wound.”
Following Wednesday’s JBC decisions, budget recommendations in the form of the Long Bill draft will go to the state Senate and House of Representatives for a vote and will likely face amendments.
After that, Ritter, who has the power of the line-item veto, will review the bill.
Representatives for Ritter did not return calls for comment.
Frank called the looming cuts “concerning” but said in an e-mail to the CSU community that he was remaining optimistic.
“We have friends and supporters within our state government who understand the value of a healthy, stable higher-education system in Colorado,” he said in the address.
“I urge you to remember that this is the time of year when potential budgetary outcomes shift several times a day.”
No members of the JBC aside from Marostica returned the Collegian’s calls for comment.
News Managing Editor Elyse Jarvis and Enterprise Editor J. David McSwane can be reached at firstname.lastname@example.org.