As lawmakers assemble, state to face renewed budget challenges

Facing a proposed state budget that includes funding cuts for CU and higher education, CU’s Government Relations team will work to minimize those cuts.

The Colorado General Assembly on Wednesday convened at the Capitol for its 120-day session.

Among the impacts of Gov. John Hickenlooper’s FY 16-17 budget proposal:

• The proposed budget for higher education reflects a proposed $20 million statewide cut. CU’s share of that cut would be about $4 million.
• Because the state budget includes a reduction, the governor is recommending tuition setting authority be retained by higher education governing boards, including the CU Board of Regents, and not be limited by state law or CCHE policy.
• No funding for new construction projects. The request funds continuation projects (of which CU has none in FY 2016-17) and only a portion of what is needed to pay for the most critical controlled maintenance projects throughout the state. The lack of funding for new construction projects affects four CU capital priorities: CU Anschutz Interdisciplinary Building 1 ($22.8 million state fund request); CU-Boulder Aerospace Engineering Sciences ($4.8 million state fund request); UCCS Engineering and Applied Sciences Building Renovation ($7.5 million state fund request); CU Denver Engineering and Physical Sciences Building/Renovation ($45.1 million state fund request). None of these projects were on the Governor’s request list.
• No change in state funding for financial aid.

Tanya Kelly-Bowry, vice president of government relations, said her team expects a challenging session.

“We’re in a unique situation because the more the state economy grows, the more the Legislature will have to cut,” she said. “Our Government Relations team will work with the Legislature in a bipartisan fashion to do our best to restore the $20 million in budget cuts and to pass the critical issues in our legislative agenda.”

CU is following with interest calls to remove the hospital provider fee from the formula used to calculate TABOR revenue limits. Exempting those funds would alleviate some pressure on the tightening state budget.

“The hospital provider fee has been a big topic of discussion over the interim,” Kelly-Bowry said. “We remain interested in exploring this as an option that could help with the state’s budget woes.” But because some have called into question the legality of such a change, she said, more information and additional legal opinions are awaited.

CU’s legislative priorities for 2016 will continue to be targeted toward efficiencies and cost savings for the university, including capital construction thresholds and bond ratings. In collaboration with Todd Saliman, vice president for budget and finance, the Government Relations team is discussing potential tweaks to the state budget that would help alleviate cuts to higher education.

As the session begins, CU is pursuing two bills:

• Tuition and bond rating:  Bill allows institutions to pledge up to 100 percent of their tuition revenue in a bond financing to realize lower interest rates, better bond ratings and millions in capital cost savings. The current statutory limit is 10 percent; Colorado is the only state that artificially limits its public universities’ tuition pledge to a percentage of total tuition. This change would not increase CU’s debt, would not have any impact on tuition rates and would not create additional risk for the university.
• Capital construction cash fund thresholds:  CU is talking with the state Capital Development Committee about a potential bill that would change the threshold at which cash-funded capital projects must be approved by their committee. The change would increase the threshold from $2 million to $10 million. President Bruce Benson last week pitched the proposal to the Joint Budget Committee during his higher ed presentation.