Higher ed flexibility legislation moves forward

Lawmakers say loosening restrictions will help institutions cope with looming 'funding cliff'

Senate Bill 10-003, the legislation that would give higher education institutions greater freedom in determining tuition and financial affairs, passed a third reading in the Colorado Senate today, just a day after passing its second reading.

The bill, which has been reworked and revised numerous times, now goes to the House Education Committee for a hearing on Thursday, May 6.

The bill was introduced as a temporary fix to help alleviate the pain of funding cuts the state has made to colleges and universities. Legislators have said it is likely that state funding for the 2011-2012 fiscal year will be trimmed by 50 percent and wanted institutions to be prepared for the "funding cliff."

SB3 would:

  1. Allow each institution to set tuition for resident and nonresident students with a cap of 9 percent each year unless there are significant decreases in state support.
  2. Require institutions to provide detailed funding reports and financial projections to the Colorado Commission on Higher Education (CCHE) and the Legislature's Joint Budget Committee beginning Nov. 10, 2010, and every future Nov. 10. The projections would include details of how the institution would respond to a variety of scenarios, including the 50 percent reduction in state funding.
  3. Require institutions to provide detailed plans on how governing boards would ensure accessibility and affordability for low- and middle-income students, how financial aid would be distributed and ways to improve student retention.
  4. Require institutions to provide the CCHE a five-year plan of performance goals that would include quality of instruction, operational efficiency, improved student success (including post-graduation employment) and improving state residents' access to and affordability to a quality education. A plan would be required each December. The CCHE would then establish benchmarks and review the progress of each institution. If an institution failed to meet one or more benchmarks by 5 percent or more, the institution would lose some of its tuition-setting freedom.
  5. Remove international students from the statutorily required limit on nonresident students enrolled in colleges. Without denying spots to in-state students, a greater influx of students from around the world would grow enrollment, diversify the campus experience and boost tuition revenue. Based on percentage of enrolled students from other countries, the University of Colorado at Boulder ranks near the bottom of institutions in the American Association of Universities. CU enrolls nearly 59,000 students on four campuses; 77 percent of those are in-state students.
  6. Allow institutions more flexibility to control financial dealings, including purchasing and awarding contracts, along with buying or selling real estate. In most cases, the institutions must seek state approval, which causes expensive delays, according to the colleges and universities.

The bill includes a five-year sunset amendment, proposed by Sen. Pat Steadman, D-Denver.

Gov. Bill Ritter put together a task force, the Higher Education Strategic Planning Steering Committee, to study higher education issues and develop a master plan for the state. That plan is expected to be completed by December.

Another amendment in SB3 would allow the governing boards of higher education institutions 14 days to comment on the master plan before it is approved. The CCHE also would use performance contracts to ensure the master plan is implemented.

During Senate testimony, Sen. Bob Bacon, D-Fort Collins, reminded lawmakers that the bill doesn't fix the fact that Colorado ranks at or near the bottom among states in several gauges of higher education funding.

"We're not funding it properly. Once you're at the bottom nationally, it's an embarrassment. It is with sadness that we have to vote for this bill because we aren't doing all we can," he said.
Other legislators echoed the sentiment.

"We have to say (the state) basically doesn't fund higher education," said Sen. Rollie Heath, D-Boulder. "This is not a fix to the situation. How we solve this problem is up to us. We need to deal with the long-term problem because education is the state's backbone."

CU President Bruce D. Benson has said allowing the institution more flexibility would "add an important arrow to our quiver." He said provisions of the bill would allow the university to operate more efficiently and effectively by reducing paperwork, getting rid of redundancies and delays. He also said it would allow campuses to increase diversity and add more revenue by enrolling more foreign students. The bill would cap the number of foreign students at 12 percent; currently, foreign students make up 4 percent of the student population.

And, he promised, "We would not price education out of the market. I'm a businessman. I wouldn't do that."