Department of Higher Education Fy 2019-20 Joint Budget Committee Hearing Agenda (1 of 3)

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Department of Higher Education Fy 2019-20 Joint Budget Committee Hearing Agenda (1 of 3) DEPARTMENT OF HIGHER EDUCATION FY 2019-20 JOINT BUDGET COMMITTEE HEARING AGENDA (1 OF 3) Wednesday, January 9, 2019 1:30 pm – 5:00 pm 1:30-2:45 PM: COLORADO COMMISSION ON HIGHER EDUCATION/DEPARTMENT OF HIGHER EDUCATION Presenters: • Dan Baer, Executive Director* • Renny Fagan,Vice Chair, Colorado Commission on Higher Education Topics: • R1 and R2/Affordability: Page 1, Questions 1-6 in the packet • Higher Education Funding Model: Page 3, Questions 7-9 in the packet • Enrollment Trends and Financial Health of Institutions: Page 4, Questions 10-13 in the packet • Request R4 Colorado Teacher Scholarship: Page 5, Questions 14-16 in the packet • Colorado Opportunity Scholarship: Page 7, Question 17 in the packet • Colorado Student Leaders Institute: Page 7, Question 18 in the packet 2:45-3:00 PM: BREAK 3:00 – 5:00PM: COLORADO COMMUNITY COLLEGE SYSTEM, LOCAL DISTRICT COLLEGES, AREA TECHNICAL COLLEGES INTRODUCTIONS AND OPENING COMMENTS Presenters: • Joe Garcia, Chancellor, Colorado Community College System • Dr. Leah Bornstein, President, Aims Community College • Dr. Carrie Hauser, President, Colorado Mountain College • Jeff Barratt, Executive Director, Emily Griffith Technical College • Teina McConnell, Executive Director, Pickens Technical College • Michael Klouser, Director, Technical College of the Rockies Topics: • R1 and R2/Affordability: Page 11, Questions 1-4 in the packet • Higher Education Funding Model: Page 15, Questions 5-8 in the packet • Higher Education Structure: Page 18, Questions 9-10 in the packet • The Future of Higher Education: Page 20, Questions 11-14 in the packet *Subject to change DEPARTMENT OF HIGHER EDUCATION FY 2019-20 JOINT BUDGET COMMITTEE HEARING AGENDA (1 OF 3) Wednesday, January 9, 2019 1:30 pm – 5:00 pm 1:30-2:45 PM: COLORADO COMMISSION ON HIGHER EDUCATION/DEPARTMENT OF HIGHER EDUCATION HIGH ER EDUCATION STRUCTURE/R1 AND R2/AFFORDABILITY 1. Discuss the role of the State in funding higher education institutions. What is on-budget versus off budget? How important is State support? As the Committee is aware, Colorado continues to rank among the lowest (47th) among states in per pupil funding. In 2000-01, state support covered about two-thirds of the cost of a student’s education; since then, the state’s share has declined to approximately one third, shifting the cost burden to Colorado’s students and families. State funding is a critical aspect of higher education support, and it is through this mechanism that higher education retains its nature as a public good. On average, in Colorado, state support comprises 20 percent of Education and General funding for institutions. (Education and General expenditures cover the core costs at institutions of higher education.) But the reliance and impact of state funding varies by institutions: state funding is 12% at the Colorado School of Mines, and 42% at Adams State University. The other main source of Education and General funding is tuition revenue, which is an on-budget appropriation in the Long Bill. State funding can offset the tuition needed to cover Education and General costs. Off-budget items are those that are generally considered as auxiliary, non-core functions. Bookstores, printing, dining halls, concessions and parking are examples of off-budget items. Revenue generated by these functions are byproducts of the market and student volume. 2. How do nonresident students affect funding available for higher education? As states divested in higher education during and after the recession, institutions used in-state tuition increases to offset state revenue. Non-resident tuition revenue provides an additional revenue stream—in some cases a significant one—to Colorado institutions of higher education. The ability to attract and retain non-resident students varies by institution, and it is tied to the market for higher education. Flagship institutions, like the University of Colorado at Boulder, have an easier time attracting non-residents. Other institutions like MSU-Denver are not able to capture the same share of non-resident students, leaving the state and resident students as the main sources of revenue. 3. How do auxiliary enterprises and other “off budget” components affect available funding? Should the State consider these components when thinking about higher education funding? Off-budget items may provide some additional funding and fungible dollars for institutions. However, these auxiliaries have costs and the revenue is generally not used to support the educational mission of the institution because auxiliary functions are by their nature meant to be self-supporting. It is the department’s belief that the state should focus on how 9-Jan-2019 1 HED1-hearing its investment can impact the core educational mission of institutions, reduce reliance on tuition, and drive innovation. 4. Discuss the role of the Department in regulating higher education programs. Colorado has a decentralized higher education system in which governing boards may largely direct their own program offerings, dating back to the early 2000s. Do we have overlap or new program development that is duplicated due to the decentralization? How are new programs analyzed and how does the CCHE handle this issue? Senate Bill 12-297 amended CRS 23-1-107(1) to clarify that Commission approval is not required for new programs, “so long as the new program is consistent with the institution’s statutory role and mission.” Department staff review statutory role and mission; affirm that the program is capped at 60/120 credits (for associate/bachelor’s degrees, with some exceptions); and that the program curriculum incorporates general transfer pathways (GT- Pathways) requirements. In addition, extended studies programs, for which institutions are requesting state support (through Colorado Opportunity Fund eligibility), are reviewed by department staff and must be approved by the Commission (per CRS 13-1-109 and CCHE policy IV). Certain proposed degrees have additional statutory requirements, including educator preparation programs and most baccalaureate degrees at community colleges. In these cases, Department staff bring the proposed program to the Academic Council (chief academic officers) for review and advisement before presenting a recommendation to the Commission. The Department retains authority for regular review of academic programs consistent with master plan goals and to “aid governing boards in making decisions regarding program expansion, contraction, consolidation or discontinuance” to “meet the needs of Colorado residents” (CCHE Policy I, Part C), with consideration of equitable access to academic programs in different parts of the state. The review authority also includes evaluation of graduate programs with a view toward eliminating duplication “where the need for duplication is not clearly justified by special excellence, geographical and other particular needs served, or the unique contribution of duplicate programs” (CRS 23-1- 107(a.6)). 5. Discuss the affordability of higher education. How do R1, R2, and the tax credit proposals address this problem? The Department and the Commission have engaged in numerous discussions about affordability. The Commission is seeking to develop an “affordability standard” for Colorado, and in so doing has considered other states’ approaches that include “free college”; a “shared responsibility model” that suggests how much a student and family should reasonably be expected to contribute from savings and student wages; and an “affordable debt model” that focuses on a reasonable amount of debt a student should have based on a graduate’s earning potential. While none of these approaches fully takes into account Colorado’s unique governance and revenue situation, they all—when applied to Colorado—suggest that too much of the increasing costs of higher education have been financed through increased tuition, which has grown faster than family incomes over the last decade even considering the economic expansion the state has enjoyed. R1 is therefore designed to allow institutions to cover inflationary and healthcare benefit costs without increasing tuition for Colorado residents. The presidents of the University of Colorado and the Colorado State University systems co-authored an opinion editorial in the December 17, 2018 Denver Post, which the Department believes accurately summarizes affordability in higher education. In short, they explain, “The challenges related to Colorado higher education funding weren't created in a day and won’t be solved in a single budget year, but Gov. John Hickenlooper’s 2019-20 budget request is a definite step in the right direction. He requested a $130 million increase for Colorado colleges and universities, a significant move that would freeze tuition increases for Colorado students and families, particularly helping those in the middle class. It would be a wise investment in Colorado’s homegrown talent and economic future.” 9-Jan-2019 2 HED1-hearing 6. How much will this request really affect what students pay, given that Colorado’s decentralized system allows institutions to establish their own policies for allocating financial aid (including state aid) and that four-year institutions employ complex pricing strategies? While Colorado’s student financial aid system is decentralized, it is not without Commission policy or Departmental guidance to help institutional financial aid offices distribute aid in a fair, student-centered manner. The Commission’s policy on state financial aid is specifically designed
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