Proposed state budget cut: Grim, but could have been worse

Regents hear update on finances expected for next fiscal year

The $60.3 million cut to higher education in Gov. John Hickenlooper’s proposed budget for the next fiscal year would mean an $11.9 million hit to the University of Colorado, the Board of Regents was told Thursday, Nov. 10, during its meeting at CU-Boulder.

Kelly Fox, vice president and chief financial officer, delivered a budget update to the board’s Budget and Finance Committee on the second day of the two-day meeting.

“On one hand, this is grim news; on the other, it could have been much worse,” Fox said.

Though the cut is not as severe as some had feared, it does nothing to change the fact that CU’s public funding is among the lowest-ranked for public universities in the country – which Treasurer Don Eldhart noted in a separate presentation to the board.

“If the (state) revenue forecast plummets, all bets are off,” Fox said when asked about the likelihood of the figures changing in the coming months. “If it holds, this is a pretty good number for us to plan on.”

Other notable figures presented to the regents:

  • Student headcount throughout CU has grown by more than 7,400 students, or 15 percent, since fall 2002.
  • In general, CU tuition-and-fee totals are below average compared to peer institutions.
  • CU is well below peer institutions in terms of administrative expenses compared to total expenses. As budgeted for fiscal year 2012, CU administrative costs are 3.5 percent of total expenditures, compared to 6.8 percent for peer institutions in fiscal year 2010, the most recent data available. “We’re very lean administratively,” Fox said.
  • Production of baccalaureate degrees awarded by CU has increased 35 percent over the past decade. CU confers 42 percent of all degrees in the state, more than twice the percentage of second-place Colorado State University.
  • Research funding has increased $230 million since fiscal year 2003 -- $790.9 million now vs. $560.8 million then.

Some regents seemed especially concerned with the university’s backlog of building maintenance needs, highlighted by 49 buildings in need of improvements at the CU-Boulder campus.

CU-Boulder Chief Financial Officer Ric Porreca said that while pressing safety risks are dealt with as soon as possible, the backlog represents $300 million in need, with $4 million budgeted to spend on upkeep annually.

“It all comes down to (needing) a source of funding,” he said.

Regent Tilman “Tillie” Bishop said the “fiduciary responsibility” of maintaining the physical structures of the campus must be a high priority for the university, because “there’s a tremendous taxpayer investment in the buildings.”