STAFF FIGURE SETTING FY 2021-22

DEPARTMENT OF HIGHER EDUCATION

JBC WORKING DOCUMENT - SUBJECT TO CHANGE STAFF RECOMMENDATION DOES NOT REPRESENT COMMITTEE DECISION

PREPARED BY: AMANDA BICKEL, JBC STAFF MARCH 9, 2021

JOINT BUDGET COMMITTEE STAFF 200 E. 14TH AVENUE, 3RD FLOOR · DENVER · COLORADO · 80203 TELEPHONE: (303) 866-2061 · TDD: (303) 866-3472 https://leg.colorado.gov/agencies/joint-budget-committee CONTENTS

Department Overview ...... 1 Summary of Staff Recommendations ...... 2 Descriptio n of Incremental Changes ...... 3 Major Differences from the Request ...... 9 Decision Items Affecting Multiple Divisions...... 11  R1, TA7 Annualization, Staff-initiated Funding Increases for Public Higher Education, R2 Tuition Increase and aligned financial aid increases ...... 11  R2 Tuition Spending Authority Increase ...... 29  R5 Restore Cybercoding Cryptology Program ...... 32  NP4 Increased Medicaid Match for Financing Payments and Correction to Annualization H.B. 20-1385 (Use of Increased Medicaid Match) ...... 36  Correction to Annualization for S.B. 16-196 Inclusive Higher Education Pilot...... 36  Indirect Cost Collection Adjustments ...... 37 (1) Department Administrative Office ...... 39 Decision Items - Department Administrative Office ...... 39  Common Policy Items, Non-prioritized Requests for Centrally-appropriated Items (NP1, NP3, NP BA1, NP BA2), and Funding Splits ...... 39 Line Item Detail — Department Administrative Office ...... 40 (2) Colorado Commission on Higher Education and Higher Education Special Purpose Programs.50 Decision Items - Colorado Commission on Higher Education and Higher Education Special Purpose Programs...... 53  R4 Wind down Professional Student Exchange Program...... 53  R6 Realign Funding for Colorado Student Leader’s Institute [Legislation Required] ...... 56  R7 Continue Open Educational Resources [Legislation Required] ...... 57  R8 RISE Fund for Higher Education [Legislation Required] ...... 60  R9 Restore Educator Loan Forgiveness Program ...... 63  NP2 Extend Pause Annual Depreciation Lease Payment [Legislation Required - Common Policy Decision] ...... 66  Staff initiated Annualization to restore Marijuana Tax Cash Fund appropriation for the Institute for Cannabis Research and Allow Roll Forward for some Research Funds...... 66  Correction to Annualization Request for Division of Private Occupational Schools...... 68  Correction to Annualization Request for Prosecution Fellowship Program ...... 69  Correction to Annualization Request and Staff-initiated adjustment to Rural Educator Recruitment, Retention, and Professional Development line item ...... 70  Staff -initiated Restore Teacher Mentor Grant Program Funding...... 73  Staff -initiated Colorado Geological Survey Common Policy/Inflationary Adjustment and Eliminate informational amounts from line item...... 75  Technical adjustment: Higher Education Federal Mineral Lease COP Payments ...... 78  Technical adjustment: University of Colorado, Lease Purchase of Academic Facilities at Fitzsimons ...... 81  Pending Committee Decision on Wildfire Mitigation Funding ...... 82  Other Technical Adjustments: WICHE, Veterinary Medicine Capital Outlay, BA1 Acceleration Stimulus ...... 82 Line Item Detail – Colorado Commission on Higher Education ...... 83 (3) Colorado Commission on Higher Education Financial Aid...... 110 Decision Items – Colorado Commission on Higher Education Financial Aid ...... 116  R3 Fort Lewis Native American Tuition Waiver ...... 116  Allocation of Financial Aid, including to Private Institutions...... 119  Department Legislative Proposal for the Dependent Tuition Assistance Program [Request for Legislation] ...... 121 Line Item Detail – Colorado Commission on Higher Education Financial Aid ...... 123 (4) College Opportunity Fund Program ...... 130 Decision Items – College Opportunity Fund Program...... 131  Continue and Update Request for Information to Explore Eliminating the COF Stipend Program And Instead Using Solely fee-for-service Contracts To Fund State Institutions of Higher Education ...... 131  Footnote Related to School of Medicine Upper Payment Limit ...... 133  COF Stipend and Fee-for-Service Adjustments incorporated in T7 and R1 Requests . 134 Line Item Detail – College Opportunity Fund Program...... 135 (5) Governing Boards ...... 141 Decision Items – Governing Boards ...... 141 FY 2020-21 Decision Items ...... 141  FY 2020-21 Tuition Adjustment ...... 142  FY 2020-21 Fee Adjustment...... 142 FY 2021-22 Decision Items ...... 143  Estimated Fee Revenue - Mandatory Fees...... 143  Amendment 50 Gaming Revenue Adjustment...... 144  Full -time Equivalent Faculty and Staff FTE adjustment...... 145  Tobacco Revenue Adjustment...... 145 Line Item Detail – Governing Boards...... 146 (6) Local District College Grants Pursuant to Section 23-71-301, C.R.S...... 152 Decision Items – Local District College Grants ...... 152 Line Item Detail – Local District College Grants...... 153 (7) Division of Occupational Education...... 155 Decision Items – Division of Occupational Education...... 155  Line Items for Colorado First/Existing Industry Job Training and Distribution of State Assistance for Career and Technical Education pursuant to Section 23-8-102, C.R.S...... 155 Line Item Detail – Division of Occupational Education ...... 156 (8) Auraria Higher Education Center ...... 159 Decision Items – Auraria Higher Education Center...... 159  Staff and Faculty FTE Adjustment...... 159  Increase AHEC Spending Authority ...... 159 Line Item Detail – Auraria Higher Education Center ...... 160 (9) History Colorado ...... 161 Decision items – History Colorado ...... 167  HC-1 Financial Sustainability for History Colorado [Legislation Requested]...... 167  Staff-initiated additional One-time History Colorado Support ...... 169  HC-2 Cumbres and Toltec Operating Appropriation [Legislation Requested]...... 170  Staff-initiated additional One-time Cumbres Toltec Railroad Support ...... 172  Gaming, Earned, and Informational Revenue for History Colorado...... 173 Line Item Detail – History Colorado...... 174 Long Bill Footnotes and Requests for Information ...... 181 Long Bill Footnotes...... 181 Requests for Information ...... 185 Indirect Cost Assessments ...... 189

Numbers Pages (1) Department Administrative Office ...... 192 (2) Colorado Commission on Higher Education ...... 195 (3) Colorado Commission on Higher Education Financial Aid ...... 202 (4) College Opportunity Fund Program...... 205 (5) Governing Boards...... 207 (6) Local District Junior Colleges ...... 214 (7) Division of Occupational Education ...... 215 (8) Auraria Higher Education Center...... 218 (9) History Colorado...... 219 Additional Appendices:

Appendix - Higher Education Funding Model Appendix – FY 2020-21 and FY 2021-22 Adjustments to Governing Boards Appendix –Tuition and Enrollment Forecast February 2021 Appendix - Letter from University of Northern Colorado on tuition flexibility Appendix - Institutions Comments on Budget Balancing

HOW TO USE THIS DOCUMENT

The Department Overview contains a table summarizing the staff recommended incremental changes followed by brief explanations of each incremental change. A similar overview table is provided for each division, but the description of incremental changes is not repeated, since it is available under the Department Overview. More details about the incremental changes are provided in the sections following the Department Overview and the division summary tables.

Decision items, both department-requested items and staff-initiated items, are discussed either in the Decision Items Affecting Multiple Divisions or at the beginning of the most relevant division. Within a section, decision items are listed in the requested priority order, if applicable.

NOTE: Due to the structured of capital construction figure setting, capital construction recommendations for higher education will be considered at the same time as recommendations for other capital projects. STAFF WORKING DOCUMENT – DOES NOT REPRESENT COMMITTEE DECISION

DEPARTMENT OVERVIEW

The public higher education system served 195,196 full-time equivalent students (FTE) in FY 2019- 20, including 156,472 Colorado residents, in 31 institutions. Of the total, 183,125 students attended one of the 27 institutions overseen by 10 state governing boards. The remaining 12,071 student FTE attended local district colleges, which receive regional property tax revenues in addition to state funding, or area technical colleges, which offer occupational certificates and serve both secondary and post-secondary students. Approximately one-third of student FTE attend two-year and certificate institutions. Students attending institutions that offer baccalaureate and higher degrees are concentrated at the University of Colorado, Colorado State University, and Metropolitan State University of Denver.

The Colorado Commission on Higher Education (CCHE) coordinates the higher education delivery system, including requests for state funding. The CCHE has some regulatory authority over the public higher education institutions in areas such as role and mission, degree programs, the transfer of credits, and performance reporting. However, each institution has a governing board that makes policy and budget decisions for the institution.

The General Assembly has delegated significant budgetary control to the governing boards of the higher education institutions. The members of the governing boards are generally appointed by the Governor, except at the University of Colorado, which has an elected Board of Regents. Within broad parameters, the governing boards are allowed to determine how to spend the revenue they earn, and they can retain unspent funds at the end of each fiscal year for future initiatives.

The Department includes the following divisions and programs: • Colorado Commission on Higher Education, including staff, operating expenses, and special purpose programs. The executive director of CCHE is also the executive director of the Department. The Department Administrative Office includes centrally-appropriated amounts for CCHE and History Colorado. • Financial aid programs, which fall under the purview of CCHE. The director of CCHE also appoints the directors of College Assist and CollegeInvest, which are both statutorily authorized state enterprises with responsibilities related to student loans and college savings programs. Both of these programs are off budget. • The College Opportunity Fund Program, which provides stipend for undergraduate resident students to attend public colleges and participating private colleges in Colorado. The section also includes appropriations for fee-for-service contracts with public higher education institutions for graduate education and other educational services not covered by the stipends. • Appropriations for each of the higher education Governing Boards. Tuition, stipend, and fee- for-service spending authority for public higher education institutions is provided in the Governing Boards section. • The Division of Occupational Education oversees Colorado Vocational Act programs, the Area Vocational Schools, federal Perkins technical training programs, and resources for the promotion of job development, job training, and job retraining. • State subsidies for Local District Junior Colleges; History Colorado; and the Auraria Higher Education Center, which maintains the single shared campus of the Community College of

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Denver, Metropolitan State College of Denver, and the University of Colorado at Denver and Health Sciences Center. SUMMARY OF STAFF RECOMMENDATIONS

DEPARTMENT OF HIGHER EDUCATION TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $3,963,717,295 $604,518,340 $2,901,671,594 $431,676,885 $25,850,476 26,733.3 Long Bill supplemental (222,361,955) 0 (222,361,955) 0 0 0.0 SB 21-109 Auraria Bond Payments 5,500,000 2,750,000 2,750,000 0 0 0.0 TOTAL $3,746,855,340 $607,268,340 $2,682,059,639 $431,676,885 $25,850,476 26,733.3

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $3,746,855,340 $607,268,340 $2,682,059,639 $431,676,885 $25,850,476 26,733.3 R1 State operating funding for public higher education 84,345,111 43,507,621 0 40,837,490 0 0.0 Inflationary adjustment for institutions 46,487,100 25,965,792 0 20,521,308 0 0.0 Tuition buy down at access institutions 14,937,975 14,937,975 (12,180,357) 12,180,357 0 0.0 History Colorado sustainability additional support 1,000,000 1,000,000 0 0 0 0.0 R2 Tuition spending authority 127,838,721 0 127,838,721 0 0 0.0 R3 Fort Lewis Native American tuition waiver 2,254,481 2,254,481 0 0 0 0.0 R4 Wind down professional student exchange program 0 0 0 0 0 0.0 R5 Restore Cybercoding Cryptology program 4,000,000 2,000,000 0 2,000,000 0 0.0 R6 Realign funding for Colorado Student Leader Institute 0 0 0 0 0.0 R7 Continue Open Educational Resources program 0 0 0 0 0 0.0 R8 RISE Fund for higher education 0 0 0 0 0 0.0 R9 Restore Educator Loan Forgiveness program 0 0 0 0 0 0.0 HC1 Financial sustainability for History Colorado 0 0 0 0 0 0.0 HC2 Cumbres and Toltec operating appropriation 21,500 21,500 0 0 0 0.0 NP1 DPA Center for Organizational Effectiveness 0 0 0 0 0 0.0 NP2 Extend pause annual depreciation lease payment 0 0 0 0 0.0 NP3 OIT budget request package (39,151) 0 (39,151) 0 0 0.0 NP4 Increased Medicaid match for financing payments 0 0 0 0 0 0.0 Annualize prior year budget actions 884,360,286 451,582,902 (100,000) 432,877,384 0 0.0 Annualize prior year legislation (299,673) 2,775,636 (5,065,764) 1,924,101 66,354 (1.0) Mandatory fee adjustments 10,866,195 0 10,866,195 0 0 0.0 Lease purchase payment adjustments 666,466 542,263 (14,791) 138,994 0 0.0 Auraria Higher Education Center 100,000 0 0 100,000 0 0.0 Centrally appropriated line items 213,804 154,539 46,775 207,513 (195,023) 0.0 Distribution for Career and Technical Education 466,119 0 0 466,119 0 0.0 Other 75 0 (7,128) 7,128 75 0.0 WICHE du es (1,000) 0 0 (1,000) 0 0.0 Indirect cost adjustments 89,118 430,927 (2,396) (328,524) (10,889) 0.0 Colorado Geological Survey (479,082) 54,878 (175,099) (51,958) (306,903) 0.0

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DEPARTMENT OF HIGHER EDUCATION TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE Cumbres and Toltec funding restoration 350,000 350,000 0 0 0 0.0 Employee FTE adjustment 0 0 0 0 0 (189.3) Higher Education limited gaming adjustment (2,044,497) 0 (2,044,497) 0 0 0.0 Tobacco revenue adjustment (694,141) 0 (694,141) 0 0 0.0 Restore Teacher Mentor Grants 548,477 548,477 0 0 0 0.5 Institute for Cannabis Research 800,000 0 800,000 0 0 0.0 TOTAL $4,922,643,224 $1,153,395,331 $2,801,288,006 $942,555,797 $25,404,090 26,543.5

INCREASE/(DECREASE) $1,175,787,884 $546,126,991 $119,228,367 $510,878,912 ($446,386) (189.8) Percentage Change 31.4% 89.9% 4.4% 118.3% (1.7%) (0.7%)

FY 2021-22 EXECUTIVE REQUEST $5,017,659,482 $1,111,195,615 $2,975,735,249 $904,973,536 $25,755,082 26,733.8 Request Above/(Below) Recommendation $95,016,258 ($42,199,716) $174,447,243 ($37,582,261) $350,992 190.3

DESCRIPTION OF INCREMENTAL CHANGES

LONG BILL SUPPLEMENTAL: The recommendation includes adjustments to higher education tuition and fee revenue estimates for FY 2020-21.

R1 STATE OPERATING FUNDING FOR PUBLIC HIGHER EDUCATION: The recommendation includes an increase $43,507,621 General Fund for public higher education (state governing boards, local district colleges, and area technical colleges) of which $40,837,490 is reappropriated to state institutions of higher education. The recommendation includes an overall increase for student stipends, fee-for-service contracts, and grants for the public governing boards, local district colleges, and area technical colleges to restore them to the FY 2019-20 level. It also adds funds to align stipend amounts for students attending private institutions with stipends for students at the public institutions, as required by statute. In combination with a component to annualize one-time FY 2019-20 funding reductions (TA7), the request restores total funding for the governing boards to the FY 2019-20 level.

The recommendation differs slightly from the request insofar as the request proposes to allocate these funds among institutions based on the H.B. 20-1366 performance model, while the recommendation provides a straight funding restoration. The recommendation also includes a slightly different amount for the stipends for students attending private institutions which is incorporated in the T7 portion of the request (a separate annualization component). Overall, the request includes restoring stipends to the FY 2019-20 level of $94 per credit hour ($47 per credit hour for qualifying students at private institutions).

The request included a proposed statutory change to suspend the requirement that financial aid increase at the same rate as funding for the governing boards for FY 2021-22. The Committee is sponsoring S.B. 21-083, which addresses this issue.

INFLATIONARY ADJUSTMENT FOR INSTITUTIONS: The staff recommendation includes an increase of $25,965,792 General Fund, including $20,521,308 reappropriated to the state governing boards, for a 2.5 percent increase to address inflationary pressures at the institutions. The recommendation includes an aligned increase for financial aid. This item is staff initiated and was not included in the Executive Request. The allocation of funds is based on a proposal from the higher education institutions to which most have agreed.

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TUITION BUY DOWN AT ACCESS INSTITUTIONS: The recommendation includes an increase of $14,937,975 General Fund, of which $12,180,357 is reappropriated to the Metropolitan State University at Denver, Colorado Mesa University, and the Community College System and is offset by an equal reduction in tuition spending authority for these institutions. The recommendation would require the Community College System and MSU to keep tuition for resident undergraduates flat for FY 2021-22 and would require CMU to reduce tuition in technical education programs to the same tuition level as the community college system. The recommendation includes an aligned increase for financial aid, consistent with statute.

R2 TUITION SPENDING AUTHORITY: The recommendation holds resident undergraduate tuition to an increase of 3.0 percent for FY 2021-22 except for those institutions that receive an additional buy- down. Staff notes that he University of Northern Colorado is also seeking a higher tuition cap; a recommendation on this is pending. Graduate and nonresident tuition rates are not restricted, although Fort Lewis College is not expected to increase its nonresident tuition rate. Figures are based on the institutions’ revenue assumptions, modified as described. Assumptions will be described in Long Bill footnotes, consistent with statute.

R3 FORT LEWIS NATIVE AMERICAN TUITION WAIVER: The recommendation includes an increase of $2,254,481 General Fund for the Fort Lewis College Native American tuition waiver. Waiver payments are mandated by Section 23-52-105 (1)(b)(I), C.R.S., which requires the General Assembly to fund 100 percent of the tuition obligations for qualifying Native American students attending Fort Lewis College. Funding for the tuition waiver is made one year in arrears and is calculated based on the prior year enrollment estimates. Almost all funds support Native American students who are not Colorado residents, although the majority of these are from tribes with historic ties to Colorado.

R4 WIND DOWN PROFESSIONAL STUDENT EXCHANGE PROGRAM: The request proposes to phase- out funding for the Western Interstate Commission on Higher Education (WICHE) professional student exchange program. The program allows residents of WICHE members states pursuing a professional degree in certain health fields who do not have the opportunity to study in their own state to enroll in an in-region institution in another state and receive tuition support from their home state. Colorado currently supports only optometry students, as medical and veterinary programs are available in Colorado. Students receive annual support of $18,830 in return for a commitment to return to Colorado for four years, or the grant converts to a loan. As a budget balancing measure, the General Assembly reduced the program by $74,025 in FY 2020-21, eliminating funding for new students to enter (4 slots would have been available) and anticipated a further reduction in FY 2021- 22. The Department’s request reduces the program by $126,025 (6 slots) in FY 2021-22, $171,775 (9 slots) in FY 2022-23, and $78,800 in FY 2023-24 (4 slots), when the program would end after the last cohort graduates. Staff does not recommend the phase out at this time.

R5 RESTORE CYBERCODING CRYPTOLOGY PROGRAM: The recommendation fully restores funding for the Cybercoding Cryptology Program to the level in FY 2019-20, eliminating a cut of $2,000,000 General Fund, which is then reappropriated to the governing boards, that was taken in FY 2020-21 as a budget balancing measure.

R6 REALIGN FUNDING FOR COLORADO STUDENT LEADERS INSTITUTE: The request proposes to eliminate funding for the Colorado Student Leaders Institute (COSLI), providing savings of $218,825 General Fund and 1.0 FTE. COSLI is a four-week residential summer program on the University of

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Colorado Denver campus for up to 100 Colorado students in tenth and 11th grade. Students must be nominated by their district or charter school and selected by the COSLI Board. Students who complete the program receive three hours of college credit. The Department requested the Committee sponsor a bill to facilitate ending the program. Staff does not recommend the request.

R7 CONTINUE OPEN EDUCATIONAL RESOURCES: Staff recommends that the Committee sponsor new legislation to continue the Open Educational Resources (OER) program, including an appropriation for grants, at an estimated cost of $1.1 million General Fund. The Department requested that the Committee sponsor a bill but only proposed funding for 1.0 FTE. Funding for the program may not be included in the Long Bill as existing statutory authority repeals November 1, 2021. The recommended legislation would reauthorize the program for an additional five years.

R8 RISE FUND FOR HIGHER EDUCATION: The Department requested a one-time appropriation of $10,000,000 General Fund in FY 2021-22 to expand on the Response Innovation, and Student Equity (RISE) Education Fund created by the Governor in the summer of 2020. The funds would be dedicated to providing grants, in partnership with the Department of Higher Education, to Colorado’s public institutions of higher education to support institution-led initiatives to reduce costs, improve operational efficiency, and adapt and lead in the post-pandemic “new normal”. The program would be administered by the same staff that administer the $32.7 million federally-funded RISE Education Fund in the Governor’s Office. The Department requested that the JBC sponsor legislation establishing the program. Staff does not recommend the request. If the General Assembly wishes to pursue such legislation, staff believes this would be best led by members of the Education Committees.

R9 RESTORE EDUCATOR LOAN FORGIVENESS PROGRAM: The Department requested $2,898,963 General Fund and 0.5 FTE in FY 2021-22 to restore the Educator Loan Forgiveness Program established by S.B. 19-003. The law authorized the Department to make payments on qualified loans on behalf of a limited number of qualifying teachers, principals, and special service providers, with educators serving rural and hard-to-fill positions prioritized. The program was de-funded in FY 2019- 20 and ongoing in order to balance the FY 2020-21 budget. The request would provide sufficient funding to prepay the full cost of one cohort of 100 teachers receiving 5 years of $5,000 in loan forgiveness per year. Under Executive Order D 2020 050, the program was discontinued in 2020 and no awards were made, despite the receipt of over 1,300 applications, and the program did not accept applications for FY 2020-21. Staff does not recommend the request. Staff believes that there are structural problems with the program because the demand is too great and requires the State to conduct a lottery for awards of $25,000 per person. If members of the General Assembly wish to work to restructure the program, a related appropriation should be included as part of a bill that makes statutory changes.

HC1 FINANCIAL SUSTAINABILITY FOR HISTORY COLORADO: Staff recommends an Executive Request that the JBC sponsor legislation that would redirect $0.9 million in FY 2021-22 and $1.9 million in FY 2022-23 through FY 2038-39 to support History Colorado Certificate of Participation payments. Under current law, these amounts are to be used to support Capitol Complex Master Plan implementation. The source of the money is General Fund amounts that are transferred to the Capitol Complex Master Plan Implementation Fund under current law. Related funding must be included as part of the legislation, if the Committee wishes to sponsor it.

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HC2 CUMBRES AND TOLTEC OPERATING APPROPRIATION: The Department requests, and staff recommends, that the JBC sponsor legislation that would redirect $0.5 million in FY 2021-22 only to support Cumbres and Toltec Railroad operations. Under current law, this amount is to be used to support Capitol Complex Master Plan implementation. The source of the money is General Fund amounts that are transferred to the Capitol Complex Master Plan Implementation Fund under current law. Staff assumes that, if the JBC approves this request, a single bill would be used to modify transfers to the Capitol Complex Master Plan Implementation Fund, and this would encompass both HC1 and HC2.

NP1 DPA CENTER FOR ORGANIZATIONAL EFFECTIVENESS: The request includes the Department’s share of a request from the Department of Personnel (DPA) to restructure financing for DPA’s Center for Organizational Effectiveness. Consistent with common policy, this is not included in the recommendation.

NP2 EXTEND PAUSE ANNUAL DEPRECIATION LEASE PAYMENT: The request includes the Department’s share of a statewide request for new legislation to extend a suspension of the annual depreciation lease equivalent payment. This mechanism for supporting capital construction expenditures was suspended in FY 2020-21 pursuant to H.B. 20-1398. This change cannot be included in the Long Bill, which will restore the funding suspended under H.B. 20-1398. If the Committee sponsors related legislation, that legislation will remove these appropriations.

NP3 OIT BUDGET REQUEST PACKAGE: The request includes the Department’s share of the Governor’s Office of Information Technology’s budget package adjustments. This item is pending, and the table therefore shows the request.

NP4 INCREASED MEDICAID MATCH FOR FINANCING PAYMENTS: The request includes the Department’s share of a request in the Department of Health Care Policy and Financing that will require new legislation related to H.B. 20-1385 (Use of Increased Medicaid Match). H.B. 20-1385 enables the state to capture additional federal Medicaid match provided through the Families First Coronavirus Response Act to offset General Fund expenditures; however, the request indicates a need for technical statutory adjustment that would allow additional savings to the General Fund into FY 2021-22 and FY 2022-23. This change cannot be included in the Long Bill. The Committee will make a decision about whether to sponsor related legislation during figure setting for the Department of Health Care Policy and Financing.

ANNUALIZE PRIOR YEAR BUDGET ACTIONS: The recommendation includes a net increase of $884.4 million total funds, including $451.6 million General Fund, for the out-year impacts of prior year budget actions, summarized in the following table. As shown, almost all of the increase is to reverse a one-time reduction in FY 2020-21 to funding for the public governing boards. A Long Bill footnote explained the General Assembly’s intent that, of the 58.0 percent reduction to the public institutions of higher education in FY 2020-21, all but 5.0 percentage points was expected to be one-time only. This portion of the request and recommendation annualizes the FY 2019-20 cut consistent with the footnote, restoring all but 5.0 percentage points of the funding. The balance is restored in request R1, so that the total request restores total funding to the public institutions to the FY 2019-20 level.

The recommendation includes restoration of the reduction to personal services that was effectuated through the Health, Life, Dental line item. However, the Department request failed to

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correctly annualize a number of other items, and staff has recommended annualizing a reduction for Rural Teacher Recruitment, Retention, and Professional Development for which Committee intent was uncertain. The table below includes the items staff recommends annualizing.

ANNUALIZE PRIOR YEAR BUDGET ACTIONS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FTE FUNDS FUND FUNDS FUNDS FUNDS TA-7 Annualize ongoing reduction to public institutions $883,548,906 $450,671,522 $0 $432,877,384 $0 0.0 Annualize rural teaching fellowship roll forward adjustment 500,000 500,000 0 0 0 0.0 Annualize suspension Prosecution Fellowship 356,496 356,496 0 0 0 0.0 FY20-21 GF HLD reduction 54,884 54,884 0 0 0 0.0 T7 stipend adjustment 0 0 0 0 0 0.0 Annualize FY 2020-21 R8 DPOS IT system funding (100,000) 0 (100,000) 0 0 0.0 TOTAL $884,360,286 $451,582,902 ($100,000) $432,877,384 $0 0.0

ANNUALIZE PRIOR YEAR LEGISLATION: The request included a net increase of $4.2 million total funds to reflect the FY 2021-22 impact of bills passed in previous sessions. The Department request failed to correctly annualize a number of items, and Committee common policy on S.B. 18-200 differed from the request. The table below includes the items staff recommends annualizing based on existing law.

ANNUALIZE PRIOR YEAR LEGISLATION TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FTE FUNDS FUND FUNDS FUNDS FUNDS HB 20-1385 Use of Increased Medicaid Match $4,043,532 $2,021,766 $0 $2,021,766 $0 0.0 HB 20-1398 Depreciation Lease Equivalent Adjustment (restore) 3,461,717 3,461,717 0 0 0 0.0 HB 20-1398 Depreciation Lease Equivalent Adjustment (annualize) 1,227,716 1,227,716 0 0 0 0.0 HB 20-1379 PERA Direct Distribution 478,087 25,566 233,519 152,559 66,443 0.0 SB18-200 PERA unfunded liability 2,656 277 1,994 256 129 0.0 DHE rec - SB 16-104 rural education coordinator 0 0 0 0 0 0.0 SB 21-109 AHEC Bond Payments (5,500,000) (2,750,000) (2,750,000) 0 0 0.0 SB 19-001 Medication Assisted Treatment (2,500,000) 0 (2,500,000) 0 0 0.0 HB 18-1331 Open Educational Resources (961,176) (961,176) 0 0 0 (1.0) SB 16-196 Inclusive HED Pilot (500,000) (250,000) 0 (250,000) 0 0.0 SB 19-228 Substance Use Disorders Prevention Measures (perinatal data project) (50,000) 0 (50,000) 0 0 0.0 SB18-200 PERA unfunded liability adjustment (2,205) (230) (1,277) (480) (218) 0.0 TOTAL ($299,673) $2,775,636 ($5,065,764) $1,924,101 $66,354 (1.0)

MANDATORY FEE ADJUSTMENTS: The recommendation includes an increase of $10,866,195 cash funds for the projected increase in higher education fee revenue. Mandatory higher education fees are shown for informational purposes only. A Long Bill supplemental reduced the fee projection for FY 2020-21. This increase reflects the post-pandemic restoration of some fee amounts.

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LEASE PURCHASE PAYMENT ADJUSTMENTS: The recommendation includes annual technical adjustments to three lease purchase obligations: the University of Colorado Health Sciences Center at Fitzsimons lease purchase authorized by H.B. 03-1256; the Higher Education Federal Mineral Lease Revenues lease purchase that supported the construction of various higher education capital construction projects in 2008; and the lease purchase for the new History Colorado Center authorized in 2008. The recommendation requires more General Fund than the request due to revised projections for Tobacco Settlement and Federal Mineral Lease funds that offset General Fund otherwise required.

AURARIA HIGHER EDUCATION CENTER: The recommendation increases spending authority for the Auraria Higher Education Center by $100,000 for funds received from the institutions operating on the Auraria campus (University of Colorado – Denver, Metropolitan State University of Denver, and the Community College of Denver).

CENTRALLY APPROPRIATED LINE ITEMS: The recommendation includes adjustments to centrally appropriated line items, as detailed in the table below. The recommendation differs from the request due to differences between Committee common policy and the request. The amounts shown includ e adjustments pursuant to BA1 and BA2 which revised the Executive Request for salary survey and related line items and health, life, and dental appropriations. For those items for which a Committee common policy is still pending, the request is shown.

CENTRALLY APPROPRIATED LINE ITEMS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FTE FUNDS FUND FUNDS FUNDS FUNDS BANP Salary survey adjustment $424,975 $39,606 $280,002 $80,163 $25,204 0.0 Payment to risk management / property funds adjustment 116,691 0 104,920 11,771 0 0.0 Health, life, and dental adjustment 114,801 82,069 61,500 108,837 (137,605) 0.0 Legal services adjustment 19,082 0 19,082 0 0 0.0 Payments to OIT adjustment (323,125) 0 (323,125) 0 0 0.0 BANP Health life dental adjustment (54,580) 5,980 (31,362) (231) (28,967) 0.0 CORE adjustment (37,662) 0 (14,632) (23,030) 0 0.0 AED adjustment (20,799) 13,286 (23,616) 15,841 (26,310) 0.0 SAED adjustment (20,799) 13,286 (23,616) 15,841 (26,310) 0.0 Workers’ compensation adjustment (3,406) 0 (1,471) (1,935) 0 0.0 Short-term disability adjustment (1,374) 312 (907) 256 (1,035) 0.0 TOTAL $213,804 $154,539 $46,775 $207,513 ($195,023) 0.0

DISTRIBUTION FOR CAREER AND TECHNICAL EDUCATION: The recommendation includes adjustments to reappropriated funds transferred from the Department of Education consistent with Committee decisions in the Department of Education.

OTHER: The recommendation includes other small technical adjustments.

WICHE DUES: The recommendation includes a reduction for fees paid to the Western Interstate Commission on Higher Education, which provides research services and runs inter-state student exchange programs used by the Department and public institutions of higher education.

INDIRECT COST ADJUSTMENTS: The recommendation incorporates adjustments consistent with the Department’s indirect cost plan.

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COLORADO GEOLOGICAL SURVEY: The recommendation removes informational amounts from the appropriation and provides a 2.5 percent inflationary increase on the balance, which consists of General Fund and Severance Tax Tier 1 funds. The inflationary adjustment of $54,878 is paid from the General Fund due to limitations in available Severance Tax.

CUMBRES AND TOLTEC FUNDING RESTORATION: The recommendation includes a staff-initiated partial restoration of funding for the Cumbres and Toltec Scenic Railroad of $350,000 General Fund.

EMPLOYEE FTE ADJUSTMENTS: The recommendation includes a net decrease of 189.3 FTE for the governing boards. These FTE are shown for informational purposes only.

HIGHER EDUCATION LIMITED GAMING ADJUSTMENT: The recommendation includes a decrease of $2,044,497 cash funds for community college and other designated institutions’ revenue from limited gaming funds. These funds are received based on Constitutional provisions and are shown for informational purposes only. This decrease reflects the overall decline in receipts from FY 2018-19 to FY 2019-20.

TOBACCO REVENUE ADJUSTMENT: The recommendation includes a decrease of $694,141 for the projected decrease in revenue to the Tobacco Settlement Health Education Fund appropriated to the Regents of the University of Colorado for programs on the medical campus.

RESTORE TEACHER MENTOR GRANTS: The recommendation includes $548,477 General Fund for partial restoration of funding for teacher mentor grants (S.B. 19-190).

INSTITUTE FOR CANNABIS RESEARCH: The recommendation includes $800,000 cash funds from the Marijuana Tax Cash Fund to restore funding for the Institute for Cannabis Research that was reduced during budget balancing.

MAJOR DIFFERENCES FROM THE REQUEST

Major differences in the recommendation for amounts in the Long Bill include:

For FY 2020-21: • The staff recommendation includes updates to FY 2020-21 tuition and fee amounts that were not formally requested.

For FY 2021-22: • Staff has included additional funding for an inflationary adjustment for the higher education institutions ($26.0 million General Fund) as well as a tuition buy-down at access institutions ($14.9 million General Fund) that was not included in the request. • The staff recommendation includes a larger adjustment for tuition spending authority than was included in the request due to forecast adjustments, though the overall recommendation for a 3.0 percent undergraduate tuition cap is consistent with the request. The recommendation also includes modifications to fee revenue amounts shown for informational purposes. • The staff recommendation does not include amounts that must be carried in new legislation. This includes funding initiatives for Open Educational Resources ($1.1 million General Fund

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recommended) and History Colorado (diversion of funds from the Capitol Complex Master Plan Implementation Fund) that staff recommends the Committee sponsor. (Legislation initiatives that staff does not recommend the JBC sponsor are likewise omitted, including a $10.0 million General Fund request for RISE grants.) • The staff recommendation includes a number of smaller funding restoration items that were not included in the request: Institute for Cannabis Research, Teacher Mentor Grants, Rural Teacher Recruitment, Retention and Professional Development, Cumbres and Toltec Scenic Railroad, Prosecution Fellowships. • The recommendation does not include a Department request to restore funding for the Educator Loan Forgiveness Program ($2.7 million General fund) or to wind down funding for the Professional Student Exchange Program in optometry. • The recommendation includes other differences consistent with Committee common policy or technical corrections.

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DECISION ITEMS AFFECTING MULTIPLE DIVISIONS

 R1, TA7 ANNUALIZATION, STAFF-INITIATED FUNDING INCREASES FOR PUBLIC HIGHER EDUCATION, R2 TUITION INCREASE AND ALIGNED FINANCIAL AID INCREASES

Background: For FY 2020-21, the General Assembly applied a 58.0 percent ($493.2 million) reduction to funding for the higher education governing boards. The Governor had also authorized allocation of $450.0 million in federal Coronavirus Relief Funds for the boards in FY 2019-20, which effectively reduced the pain of the state funding reduction, as did direct support to the institutions from federal stimulus bills which allocated Higher Education Emergency Relief Funds.

Footnotes for FY 2020-21 specified the General Assembly’s assumptions that undergraduate tuition would increase no more than 3.0 percent. Based on this authority, the community college system and Metropolitan State University of Denver increased tuition 3.0 percent (Metro only for the second half of the year), Western Colorado University increased tuition 2.9 percent, and Adams State University increased tuition 2.1 percent. Other institutions kept posted tuition flat; however many adjusted fees, including both increases and decreases.

DEPARTMENT REQUESTS TA7 AND R1 AND RELATED FINANCIAL AID AND TUITION PROPOSALS The combined requests for TA7 and R1 are intended to restore state funding for the higher education institutions to the level in place in FY 2019-20.

Request TA7: This request is designed to comply with a Long Bill footnote that explained the General Assembly’s intent that, of the 58.0 percent reduction to the public institutions of higher education in FY 2020-21, all but 5.0 percentage points was expected to be one-time only. This request therefore restores all but the final 5.0 percent of the reduction for the higher education institutions that was applied in FY 2020-21. The restoration is applied to the boards in the same proportions as the original reduction. The request includes $450,671,522 from the General Fund of which $432,877,384 is reappropriated to the state governing boards, while the balance goes to the local district colleges and area technical colleges.

Request R1: This request restores the balance of the FY 2020-21 reduction to the governing boards, bringing funding for the higher education governing boards back to the FY 2019-20 level. The request includes an increase of $43,530,352 General Fund for institutions of higher education, including state governing boards, local district colleges, and area technical colleges. Of the total, $40,837,488 is reappropriated to the state governing boards. In addition, of the total $1,014,171 General Fund is used to align stipend amounts for students attending private institutions with stipends for students at the public institutions, as required by statute.

As requested, the state-operated boards would receive total appropriations that range from 0.8 percent below their FY 2019-20 level to 0.5 percent above their FY 2019-20 level, based on the results of the performance section of the H.B. 20-1366 model.

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Related Request R2: The request is paired with the R2 request for tuition spending authority. The request proposes a 3.0 percent cap on increases in resident undergraduate tuition but also proposes that the Colorado Commission on Higher Education be allowed to authorize higher tuition increases.

Aligned Adjustments for Financial Aid: The request included a proposed statutory change to suspend the requirement that financial aid increase at the same rate as funding for the governing boards for FY 2021-22. Without such a change, an additional appropriation for financial aid would be required or a portion of the requested funding for public institutions would need to be allocated to financial aid. Although funding for the governing boards was reduced in FY 2020-21, most funding for financial aid was not.

COMMITTEE ACTION ON THE FINANCIAL AID PROPOSAL The JBC is sponsoring S.B. 21-083, which is traveling through the General Assembly at the same time as the Supplemental Package. This bill addresses this issue. For purposes of figure setting, staff assumes that S.B. 21-083 will be adopted before the Long Bill is introduced. Staff thus assumes that any increase for the governing boards to restore funds to the FY 2019-20 level will not require an aligned increase for financial aid but that any increase that exceeds the FY 2019-20 appropriation will require a proportionate increase.

STAFF RECOMMENDATION ON TA7, R1, AND OTHER INCREASE OPTIONS Staff recommends the requested full restoration of funding with minor technical adjustments but also recommends that the Committee consider some additional increases.

Request TA7: Staff recommends TA7 as submitted but has included some related technical adjustments to amounts for student stipends versus fee-for-service contracts so that the stipend amounts align with FY 2019-20 actual stipends awarded by governing board. These changes have a net $0 impact on the funding to each institution of higher education. This component of the recommendation is $450,671,522 General Fund, of which $432,877,384 is reappropriated to the state governing boards.

Request R1: Staff recommends R1, but supports simply restoring funding to each institution to the FY 2019-20 level, rather than running this portion of the funding through the performance portion of the funding model as proposed by the Department. The total General Fund amount matches the request, but this approach does result in small changes to how much each of the state governing boards receive, with some receiving slightly more and some slightly less in order to return to the FY 2019-20 funding level. While staff is recommending a straight restoration for purposes of the allocation, staff does view this $43.5 million as a discrete element of the request that the Committee may or may not choose to fund depending upon available revenue. The staff recommendation also includes a slightly different figure for restoring the private COF stipend amount so that funding returns to the FY 2019-20 level (but not above). The total recommendation is for $43,507,622 General Fund, of which $40,837,490 is reappropriated to the state governing boards and $991,440 is for the private COF stipend restoration.

The staff recommendation includes two additional components for the Committee’s consideration:

Inflationary Adjustment: An inflationary adjustment of 2.5 percent for the higher education governing boards with an aligned increase for financial aid. This portion of the recommendation includes $21,258,091 General Fund for the institutions and $4,707,701 General Fund for financial aid. Staff

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recommends that this financial aid amount be added to Need Based Aid. The distribution of funds is based on the joint proposal from the higher education institutions and includes:

• Distributing 12 percent of the $21.3 million for the institutions ($2,597,630) in “Step 1” of the model, with half distributed based on the proportion of first generation student headcount, including the calibration described in statute, and half distributed based on the proportion of first generation student FTE (full time equivalents) using otherwise the same approach. • Allocating the balance of the 2.5 percent to support a 2.195 percent increase in funding through the performance portion of the funding model.

A copy of the Outcome summary for the model is attached.

Tuition buy down for “access” institutions: This includes providing sufficient funds to keep resident undergraduate tuition flat at the community college system and Metropolitan State University of Denver, instead of allowing tuition to increase 3.0 percent, and buying down tuition for technical education classes at Colorado Mesa University to the cost for these classes for students in the community college system. This portion of the recommendation includes $12,180,357 General Fund, offset by a reduction of $12,180,357 cash funds, and $2,757,618 General Fund for financial aid. Staff recommends that, of the financial aid amount, $1,000,000 be used to restore the Colorado Opportunity Scholarship Initiative program to the FY 2019-20 funding level and the balance be added to Need Based Aid.

The tables below summarize the recommendation. Table 1: Restore Base State Support for Public Higher Education + Initial Inflationary Increase

FY 2019-20 Base Student 2.5 Percent Stipends, Inflationary Inflationary FY 2020-21 T7 - Restore All R1 Restore Section 303 Adjustment : Adjustment Reduction for but 5.0 Percentage Balance of Fee-for-Service Institutions' v. FY 2019- Institutions* Points of Cut Funds Contracts and Requested 20 Base for Specialty Allocation Education

Adams State University $17,280,257 ($10,022,549) $9,158,536 $864,013 $250,903 1.5% Colorado Mesa University 32,184,959 (18,667,276) 17,058,028 1,609,248 802,251 2.5% Metropolitan State University 63,669,142 (36,928,103) 33,744,646 3,183,457 2,080,336 3.3% Western State Colorado University 15,035,379 (8,720,520) 7,968,751 751,769 405,583 2.7% Colorado State University System 170,828,219 (99,080,366) 90,538,955 8,541,411 3,592,648 2.1% Fort Lewis College 14,136,437 (8,199,133) 7,492,311 706,822 213,404 1.5% University of Colorado System 241,373,927 (139,996,876) 127,928,180 12,068,697 5,184,008 2.1% Colorado School of Mines 25,371,265 (14,715,334) 13,446,771 1,268,563 665,271 2.6% University of Northern Colorado 47,004,464 (27,262,589) 24,912,366 2,350,223 1,110,458 2.4% Community College System 189,865,735 (110,122,127) 100,628,840 9,493,287 6,216,446 3.3% Sub-total, State Governing Boards 816,749,784 (473,714,873) 432,877,384 40,837,490 20,521,308 2.5% Colorado Mountain College 9,010,042 (5,225,824) 4,775,322 450,502 197,727 2.2% Aims Community College 10,653,783 (6,179,194) 5,646,505 532,689 233,799 2.2% Area Technical Colleges 13,910,021 (8,067,812) 7,372,311 695,501 305,257 2.2% Total - Institutions $850,323,630 ($493,187,703) $450,671,522 $42,516,182 $21,258,091 2.5%

Line Items Related via Formula COF Private Institution Stipends 1,725,840 (991,440) 991,440 Need Based Financial Aid 163,314,446 4,707,701 Work Study 23,129,178 Merit Based Aid 5,000,000 (5,000,000) Vets/Law Enforcement/POW 956,000 Colorado Opportunity Scholarship Initiative 7,000,000 (1,000,000) Career and Technical Scholarship 450,000 Total $1,051,899,094 ($500,179,143) $450,671,522 $43,507,622 $25,965,792

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Table 2: Add a Tuition Buy Down & Total Staff Recommendation Total FY 22 Access Buy Down as FY 2021-22 Increase Institution Percentage of Recommendation Percentage Recommended Tuition Buy FY 2019-20 with Both Buy Change by Staff above Down Base Down and Inflation FY 20 base Adams State University $0 $17,531,160 $250,903 1.5% Colorado Mesa University 1,714,564 5.3% 34,701,774 2,516,815 7.8% Metropolitan State University 3,147,182 4.9% 68,896,660 5,227,518 8.2% Western State Colorado University - 15,440,962 405,583 2.7% Colorado State University System - 174,420,867 3,592,648 2.1% Fort Lewis College - 14,349,841 213,404 1.5% University of Colorado System - 246,557,936 5,184,009 2.1% Colorado School of Mines - 26,036,536 665,271 2.6% University of Northern Colorado - ` 48,114,922 1,110,458 2.4% Community College System 7,318,611 3.9% $203,400,792 13,535,057 7.1% Sub-total, State Governing Boards 12,180,357 1.5% 849,451,450 32,701,666 4.0% Colorado Mountain College - 9,207,769 197,727 2.2% Aims Community College - 10,887,582 233,799 2.2% Area Technical Colleges - 14,215,278 305,257 2.2% Total - Institutions $12,180,357 $0 $883,762,079 $33,438,449 3.9% Line Items Related via Formula - COF Private Institution Stipends 1,725,840 - 0.0% Need Based Financial Aid 1,757,618 169,779,765 6,465,319 4.0% Work Study 23,129,178 - 0.0% Merit Based Aid - - 0.0% Vets/Law Enforcement/POW 956,000 - 0.0% Colorado Opportunity Scholarship Initiative 1,000,000 7,000,000 1,000,000 14.3% Career and Technical Scholarship 450,000 - 0.0% Total $14,937,975 $1,086,802,862 $40,903,768 3.9%

Additional Option: At the request of Representative Herod, Staff has also included an option for the Committee’s consideration that would allocate a portion of funds based on underrepresented minorities. One of Colorado’s Higher Education Master Plan goals is to close the achievement gaps between underrepresented minority students and other students for the good of these students and to help the State achieve its goal of 66 percent statewide postsecondary credential attainment by 2025.1

Targeting funding based on minority representation can provide additional resources to institutions that are attempting to serve disadvantaged populations and close equity gaps. There are numerous options for developing such a formula. The one outlined below is calibrated to current levels of institutional funding, which serves to ensure that small institutions that are already more reliant on General Fund but that have significant populations of resident students who are underrepresented minorities are not penalized by the formula.

Please note that the data below does not include funding for the local district colleges or the area technical colleges. However, given the populations served by these entities, it would make sense to include them. Should the Committee wish to proceed with this option, staff will gather the necessary additional data.

1 http://masterplan.highered.colorado.gov/

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A B C D

TOTAL Board A Board B Board C

Headcount Data

1 Most recent URM headcount for Board 30 200 50 280 2 Total resident undergraduate headcount= 100 500 1000 1,600 3 URM as a percentage of all students at board 30% 40% 5%

"Calibrate" URM share to current share of institutional funding 4 Current share of total institutional funding 20% 30% 50% 100% Amount in Row 3 multiplied by amount in Row 4, .06 .12 .03 .21 5 and summed

Adjust so that total is 100% by dividing each 5 amount in Row 5 by the row total (A5/D5, B5/D5, 29% 59% 12% 100.0% etc.) = share of total

Example of an Underrepresented Minority Formula Component (Rep. Herod Request)

FY 2021-22 Total Underrepresente Increase as Increaes with all 3 d Minority Percentage of Percentage Additional Optional Adjustment Components (Staff Component FY 2019-20 Change Rec. + URM Option Base Option

Adams State University $74,422 0.4% $325,325 1.9% Colorado Mesa University 84,305 0.3% 2,601,120 8.1% Metropolitan State University 260,029 0.4% 5,487,547 8.6% Western State Colorado University 40,095 0.3% 445,678 3.0% Colorado State University System 249,574 0.1% 3,842,222 2.2% Fort Lewis College 36,577 0.3% 249,981 1.8% University of Colorado System 416,868 0.2% 5,600,876 2.3% Colorado School of Mines 38,949 0.2% 704,220 2.8% University of Northern Colorado 135,765 0.3% 1,246,223 2.7% Community College System 663,417 0.3% 14,198,474 7.5% Sub-total, State Governing Boards 2,000,000 34,701,666 4.2% Colorado Mountain College * 197,727 2.2% Aims Community College * 233,799 2.2% Area Technical Colleges * 305,257 2.2% Total - Institutions $2,000,000 $35,438,449 4.2% Line Items Related via Formula - COF Private Institution Stipends - Need Based Financial Aid 452798 6,918,117 Work Study - Merit Based Aid - Vets/Law Enforcement/POW - Colorado Opportunity Scholarship Initiative 1,000,000 Career and Technical Scholarship - Total $2,452,798 $42,356,566 4.0% *These institutions could be included. They are omitted from this version due to time and data constraints.

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Related Request R2: Staff recommends the request for a 3.0 percent cap on increases in resident undergraduate tuition, expressed via a footnote on the Committee’s assumptions. Additional details about the recommendation are discussed under the R2 Request decision item title.

STAFF ANALYSIS: HOW MUCH FUNDING? In determining funding for the institutions, the Committee must address the questions both of how much funding to provide and then how to allocate it.

• Restoring funding to the FY 2019-20 base costs $494.2 million General Fund. Every 1.0 percent increase in funding for the governing boards above the FY 2019-20 base costs $10.5 million, including $8.6 million for the governing boards and $1.9 million for financial aid.

• In general, funding for higher education is highly dependent upon the revenue available to the General Assembly. Thus, staff has provided a set of options that are intended to be incremental, starting with an incomplete restoration of funds T7 and providing additional expenditure recommendations and options to consider if more funding is available. Staff hopes that the Committee establish the minimum General Fund it wishes to provide during the figure setting process but anticipates that both the final amount and the allocation plan may not be settled immediately.

• The institutions have come directly to the Committee (not through the Governor’s Office) seeking an increase of $81,836,433 (9.6 percent) from the General Fund over the FY 2019-20 funding level to cover their calculation of inflationary need of 8.4 percent plus $10 million for targeted first generation student funding. The proposal is to distribute fund using a formula to which all but one has agreed. This represents a “high end” option that is not part of the staff recommendation but that can certainly be considered depending upon revenue available and the other demands on the General Fund, including the need to strengthen the State’s reserves. Note that providing funding at this level would require an additional $16.7 million in funding for financial aid beyond the institutions’ request.

• The Staff recommendation for 2.5 percent as an inflationary adjustment ($21.3 million for institutions) is based on the Committee action thus far to approve a staff salary increase of 2.5 percent and a community provider rate increase of 2.5 percent. There is an argument for going higher than the 2.5 percent figure to address inflationary pressures at institutions. The institutions currently estimate inflationary pressures on their operations at 2.7 percent from FY 2020-21 to FY 2021-22, but any effort at a precise calculation is problematic due to the interplay between tuition and state support, variability in tuition revenues, and the fact that institutional expenditures are deeply influenced by available revenue.

• There is ample evidence that the state higher education system is “underfunded” in comparison to other states, and staff is supportive of additional increases for the institutions to the extent the General Assembly feels it has sufficient resources. However, staff recommends that the Committee set the General Fund operating budget for higher education at a level it thinks is likely to be a sustainable base point for the General Assembly over the next several years. The state higher education governing boards are an industry with over $8 billion in combined annual revenues and rely far more heavily on tuition and other cash revenues than the General Fund. Thus, even a $40.9 million increase spread across the institutions represents a modest increase from the perspective of most of the institutions, though it represents a large

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amount from a state budget perspective. The General Assembly should not over-extend its own limited resources to provide additional support that will be welcome--but unlikely to change the fundamental dynamic that makes the institutions highly dependent upon tuition.

• At the time of this writing, the U.S. Senate was considering a new $1.9 trillion economic stimulus package passed by the U.S. House. This includes a large additional increase for higher education, which most observers seem to believe will be adopted with the current dollars and language. Estimates from the Association of Public Land Grant Universities indicate that Colorado public institutions can expect $230.4 million from this source that can be used for institutional expenditures, adding to the $260.8 million they received from the two earlier relief packages (funding for Higher Education Emergency Relief Funds/HEERF I and II). Staff believes that this additional funding will come close to filling the significant revenue hole caused by the pandemic and should be one consideration in the Committee’s deliberations. The table below shows the federal aid provided in the first two stimulus packages and the projected funding from the third that is expected to be enacted shortly.

Summary of Federal Higher Education Allocations - Institutional Use Portion (excludes portion that must be allocated for direct student support)

HEERF III Total Estimated HEERF I HEERF II estimate* HEERF Funding*

Research Systems U. of Colorado $18,872,212 $43,606,940 $60,296,393 $122,775,545 Colorado State U. 10,978,434 25,215,160 31,493,661 67,687,255

Independent Research Institutions University of Northern Colorado 3,825,107 8,776,642 11,170,169 23,771,918 Colorado School of Mines 1,722,558 3,144,538 4,417,358 9,284,454

Comprehensive 4 Year Institutions Fort Lewis College 1,693,532 3,372,570 4,347,297 9,413,399 Adams State University 841,994 2,041,190 2,434,174 5,317,358 Colorado Mesa University 3,534,190 8,581,965 10,580,597 22,696,752 Western Colorado University 676,670 1,813,183 2,164,821 4,654,674 Metropolitan State University of Denver 7,723,142 19,171,046 22,994,733 49,888,921

Community College System Community College System (13 institutions) 18,613,196 61,647,022 68,151,796 148,412,014

Local District Colleges Aims Community College 1,270,594 4,422,818 4,911,769 10,605,181 Colorado Mountain College 890,097 2,887,886 3,304,458 7,082,441

Area Technical Colleges 3 Institutions 1,584,321 3,878,208 4,113,156 9,575,685 Total Public Institutions $72,226,047 $188,559,168 $230,380,382 $491,165,597 *Based on estimates from the Association of Public Land Grant Universities for HEERF III.

JUSTIFICATION FOR SUPPORT: PANDEMIC-RELATED FINANCIAL STRESSES AND CURRENT FINANCIAL STATUS OF THE INSTITUTIONS As discussed during briefings, Colorado public institutions have faced significant negative effects from the pandemic but they have weathered the storm better than was originally feared. Revised estimates

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solicited by staff and provided by the institutions indicated the continued bleak situation in the spring. However, the COVID-19 vaccination campaign should help provide a more “normal” school experience for academic year 2021-22 and the multiple tranches of federal support have helped limit the damage.

The tables below show the change in revenue from FY 2019-20 to FY 2020-21, even after including projected amounts from the first two tranches of federal support (HEERF I and II) and the allocations of Coronavirus Relief Funds authorized by the Governor. The Colorado School of Mines was the only institution that largely stayed on a growth trajectory.

FY 2019-20 ACTUAL TO FY 2020-21 ESTIMATED CHANGE IN TOTAL REVENUE TOTAL REVENUE PERCENTAGE FY 2019-20 FY 2020-21 CHANGE CHANGE

Research Systems CU System $4,969,020,000 $4,814,427,985 ($154,592,015) -3.1% CSU System 1,570,868,518 1,508,901,037 (61,967,481) -3.9%

Community College 780,286,144 738,453,957 (41,832,187) -5.4% System

Independent Research

Institutions UNC 224,485,299 205,692,761 (18,792,538) -8.4% Mines 354,308,041 363,976,000 9,667,959 2.7%

Large 4 Year

Institutions CMU 171,525,089 167,360,666 (4,164,423) -2.4% Metro 280,311,113 281,876,674 1,565,561 0.6%

Small Institutions Western 63,124,402 61,337,971 (1,786,431) -2.8% Fort Lewis 85,023,704 84,994,123 (29,581) 0.0% Adams 58,243,528 54,413,403 (3,830,125) -6.6%

Local Districts CMC 78,417,820 78,676,616 258,796 0.3% Aims 80,233,893 79,145,616 (1,088,277) -1.4%

Area Technical Colleges 36,200,715 35,370,728 (829,987) 4.5% Total $8,752,048,266 $8,474,627,537 ($277,420,730) -3.2%

The following table compares the FY 2019-20 actual to current FY 2021-22 institutional forecasts. For purposes of the forecast, institutions were asked to assume that General Fund would be restored to the FY 2019-20 level, but not increased, and to use their most recent FY 2021-22 enrollment forecasts. As shown, the community college system and the University of Northern Colorado anticipate that they will have a considerable decline in revenues in FY 2021-22 compared to FY 2019- 20, while most others project revenue ranging from flat to modest increases. Two factors, however, could change this picture.

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• As reflected in the chart below, assuming additional federal stimulus funds are awarded as anticipated, institutions will have a significant additional revenue cushion which should help address ongoing recovery bumps.

• The institutions remain extremely uncertain about their finances in the coming year. They are becoming more hopeful that the next year will be far more normal, but, particularly at the access institutions, they are uncertain whether students who were disrupted in their high school to college pipeline will ever come back. Even the larger, wealthier research institutions have significant questions about next year’s enrollment. Staff has included institutions’ feedback about both their range of uncertainty and how they currently expect to balance their budgets for FY 2021-22, given the high level of uncertainty. Responses have been attached to the back of this packet as staff believes they provide helpful insight into current conditions. A number of institutions indicate that staff compensation decisions for the coming year will be dependent upon actual enrollment in the fall and/or the level of state support. Others indicate that they expect to continue to draw on reserves. Many expect to continue to eliminate positions, downsize and restructure.

FY 2019-20 ACTUAL TO FY 2021-22 FORECAST (ASSUMING GENERAL FUND RESTORATION TO FY 2020 LEVEL) CHANGE FY ANTICIPATED 20 TO 22 IF FEDERAL HEERF III FY 2019-20 FY 2021-22 CHANGE FY 20 TO PERCENTAGE ADD HEERF FUNDS ACTUAL FORECAST FY 22 CHANGE III FUNDS TO INSTITUTIONAL FY 21-22 PORTION FORECAST Research Systems CU System $4,969,020,000 $4,984,645,089 $15,625,089 0.3% $60,296,393 1.5% CSU System 1,570,868,518 1,606,099,153 35,230,635 2.2% 31,493,661 4.2%

Community College 780,286,144 754,384,947 (25,901,197) -3.3% 68,151,796 5.4% System

Independent Research

Institutions UNC 224,485,299 215,305,191 (9,180,108) -4.1% 11,170,169 0.9% Mines 354,308,041 370,332,285 16,024,244 4.5% 4,417,358 5.8%

Large 4 Year

Institutions CMU 171,525,089 170,834,812 (690,277) -0.4% 10,580,597 5.8% Metro 280,311,113 281,288,335 977,222 0.3% 22,994,733 8.6%

Small Institutions Western 63,124,402 63,813,220 688,818 1.1% 2,164,821 4.5% Fort Lewis 85,023,704 92,388,816 7,365,112 8.7% 4,347,297 13.8% Adams 58,243,528 59,637,037 1,393,509 2.4% 2,434,174 6.6%

Local Districts CMC 78,417,820 80,960,042 2,542,222 3.2% 4,911,769 9.5% Aims 80,233,893 79,825,019 (408,874) -0.5% 3,304,458 3.6%

Area Technical 36,200,715 39,545,733 3,345,018 29.4% 4,113,156 20.6% Colleges

Total $8,752,048,266 $8,799,059,679 $47,011,413 0.5% $230,380,382 3.2%

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JUSTIFICATION FOR SUPPORT: BASE CORE MINIMUM COSTS The institutions have costs that they must cover to keep their organizations functioning, including annual salary and benefits increases. According to prior year Department requests, the U.S. Census Bureau report on State Government employment and payroll data for 2016 showed that 50,472 FTE worked in higher education in 2016, representing 59.0 percent of all State of Colorado government FTE. More recent data from the Department suggests this figure could be higher. 2 Most of these are “off budget” and work for the institutions in research and auxiliary services. The ten state governing boards and the Auraria Higher Education Center reported 26,303.7 state FTE were employed in Education and General functions in FY 2019-20, which is similar to the estimate included in the FY 2020-21 Long Bill. Unlike other parts of state government, the General Assembly does not appropriate funds to the governing boards based on common policy salary and benefits calculations. Instead, institutions are expected to use General Fund, tuition revenue and other sources of support to cover these costs. This is true even for those institutional staff whose salary and benefits are determined by state personnel system rules (classified staff). Salary and benefits for classified staff represented 10.6 percent of salaries and benefits overall in the Education and General Budget. Other classified staff are employed in housing, dining, and other “auxiliary enterprises” but these enterprises are assumed to be self- sustaining. The table below summarizes the sources and uses of funds in FY 2019-20 that are funded from the Education and General budget.

FY 2019-20 ACTUAL EDUCATION AND GENERAL BUDGETS

EXPENDITURE/REVENUE PERCENTAGE OF TOTAL Total Salaries and Benefits - 26,103.3 FTE $2,414,898,402 64.8% (about 50% salaries and 15% benefits) Other Expenditures 1,310,001,231 35.2% Total Education & General Budget $3,724,899,633 100.0% General Fund 824,151,477 22.1% Resident tuition 1,324,508,231 35.6% Nonresident tuition 1,105,532,933 29.7% Other state funds sources 30,163,736 0.8% Fees, indirect recoveries, other 440,543,256 11.8%

Classified Staff Salaries and Benefits $256,473,228 10.6% of all (included above) salaries and benefits

Although the General Assembly does not appropriate funding for institutional staff and benefits in the same way it does for other parts of the budget, the JBC typically considers basic inflationary cost drivers when establishing funding levels for the governing boards.

The Department coordinates an annual submission from the institutions that provides detail on education and general revenues and expenditures (the budget data books used for the information above), and it referenced an analysis of “base core minimum” cost needs in its R2 request which identified a need for a 1.4 percent increase to cover these costs.

2 The Bureau of Labor Statistics reported 79,600 state employees in Colorado working in education in 2019, most of whom are presumed to be higher education staff, including student workers.

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A recent submission from the governing boards requests a much larger increase and uses a similar approach to that used by the Department, though it uses some different assumptions. The approach from the institutions involves:

a) Analyzing the “budget data book” submissions to determine the portion of overall actual costs related to:

• Salary (48.6-56.7 percent by institution in the most recent analysis submitted); • Benefits (15.8 percent to 17.9 percent by institution); • Other (21.2-35.6 percent)

b) Inflating these based on recent experience and Committee common policy (e.g., 2.5 percent for salary survey, 5.0 percent on average for health and other benefits); c) Estimating the tuition revenue that will come from an assumed tuition increase; and d) Requesting the General Fund cover the balance

The institutions’ most recent proposal is based on calculating two years of base cost increases--1.5 percent for FY 2020-21 and 2.7 percent for FY 2021-22 (4.4 percent over the two years). The proposal then offsets their calculated need for increases of $140,776,261 with estimated offsets from tuition, assuming 3.0 percent tuition increases. They project tuition offsets will cover 49.2 percent of the increase, so that the overall General Fund share would be about half of the total. The resulting institutional calculation is that they require an inflationary increase of 8.44 percent.

In practice:

• In FY 2019-20, state General Fund support represented only 25 percent of General Fund + tuition revenue for the state governing boards and 22.1 percent of overall Education and General revenue. While the General Assembly might like to increase, rather than decrease this share, can the General Assembly afford to cover half of institutional base minimum cost increases? As presented, the institutions are essentially asking the General Fund to buy down tuition rates for both resident and nonresident students. • Tuition revenue figures are subject to substantial swings based on enrollment, and institutions’ adjust their costs in response to available revenue. • Institutions generally contracted in FY 2020-21, and most will have barely returned to FY 2019- 20 revenue levels in FY 2021-22, if that. This is also true in the Education and General Budget which is comprised of state support, tuition revenue, and fees and is the basis for this “base minimum cost” proposal. • Whether or not the General Assembly approves a tuition increase for state staff, institutions may provide an increase far greater or far less depending upon their overall revenue profile--as is clear from their attached comments about how they expect to respond to FY 2021-22 revenue uncertainty.

Staff can easily quibble with details of the calculations, but it is certainly true that institutions of higher education, like any business, governmental body, or other large organization, face a range of inflationary pressures, including salary pressures. After a difficult year in which staff at institutions typically received no increases and often furloughs/salary reductions, institutions will

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be under pressure to increase staff salaries if they are able. Official state policy on compensation, as well as state funding, will play into institutional decisions on salaries, though it will not be the final determinant for most institutional staff who are exempt from the classified system. The level of General Fund support will be one factor, along with enrollment, that will drive institutional decisions about compensation and other initiatives.

JUSTIFICATION FOR SUPPORT: LOW LEVEL OF STATE FUNDING, BURDEN ON STUDENTS A wide range of analyses over the years have emphasized the extent to which Colorado governmental support for higher education is low compared to other states and tuition is typically relatively high. Staff frequently cites the State Higher Education Officers’ State Higher Education Finance Report to highlight this. As shown in the table from the 2019 report: Colorado’s educational appropriations per student FTE are low, its net tuition revenue is high, and its costs per student served are also now higher than the national average. Staff believes this is largely driven by the share of students in Colorado who attend the expensive research institutions versus less expensive community colleges. https://shef.sheeo.org/state-profile/colorado/

The Department’s 2020 Hanover Resource Analysis Report was designed to provide a related analysis at the institutional level, comparing each state institution to its national peers. The report highlights dramatically lower state support as well as, at most institutions, higher tuition.

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High costs borne by students have short and long term consequences for students. As staff has highlighted in the past: • Studies indicate that student participation is inversely related to higher education cost. For example, a study of tuition increases from 1980 to 1992 found that for every $1,000 increase in tuition, participation in community colleges fell by 4.7 percent and participation in 4-year institutions fell by 1.2 percent. While low-income students, in particular, may not actually pay the sticker price, they are far more likely to be aware of the sticker price than of the amount they will actually pay. As a result, a higher sticker price discourages participation, particularly among low- income students. In addition, students likely take more time to complete their degrees than in the past in large part due to higher education costs: students often work many hours to finance their educations, and this can make it difficult for them to take a full course load. A recent survey of over 6,000 community college students across the country indicated that their top obstacles to success were work obligations and paying expenses. Colorado’s Master Plan includes ambitious goals for increasing completion at state higher education institutions. Allowing tuition to continue to rise at high rates runs directly contrary to state goals.

• At Colorado public institutions, 50.7 percent of students graduating with a 4-year degree graduated with federal student loan debt in FY 2019-20, and the average debt at graduation for these students was $26,289, with a range from $14,638 to $32,901 depending upon the institution. For institutions serving a lower income Colorado resident population, the share of students graduating with debt is typically over 60.0 percent. For students completing an associate’s degree, the average federal student loan debt at graduation ranged from $8,347 to $15,169, with approximately 42.0 percent graduating with debt. Student loan debt has now surpassed all other forms of non- mortgage consumer debt. While this in part reflects greater participation in higher education, it

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also reflects the increasing cost of higher education. According to the Federal Reserve Bank of New York, nationally, per-borrower higher education debt increased at a rate of about five percent per year between 2008 and 2018, student repayment is slow (2005 graduates had repaid less than 40 percent of their outstanding balances 10 years after leaving school), and more than 15 percent of borrowers in the second quarter of 2019 were 90 or more days past due or in default.

STAFF ANALYSIS: HOW TO ALLOCATE AVAILABLE FUNDS? Allocation Method Requested: The Department of Higher Education’s FY 2020-21 request was based on using “step 2”--the “performance” section of the H.B. 20-1366 model to restore the final 5.0 percentage points of funding to the institutions.

Most institutions have now agreed to pursue funding from the General Assembly that: (1) first restores funding to the FY 2019-20 level for each governing board; (2) adds funds based on their “base core minimum cost” calculation of $71.8 million (8.45 percent increase - calculation described above); and (3) adds an additional $10.0 million through “Step 1” of the funding model. The proposal adds $5.0 million distributed based first generation student headcount, using a distribution specified in statute and an additional $5.0 million using the same approach but relying instead on counts of full-time students. The letter from the institutions indicate that they have agreed that if the General Assembly provides less than their “ask”, funding to each part of the funding model would be adjusted proportionately.

Allocation Method Recommended: The staff recommendation aligns with the institutional proposal insofar as staff first restores the base funding in the proportions it was reduced and then adds an initial 2.5 percent in funding for inflation using the institutions’ model, which staff has scaled down proportionately. It is important to note that this model does provide additional assistance to access institutions. Those that receive the smallest increases from this proportional approach are small colleges. Adams State and Fort Lewis Colleges receive the smallest increases, while Metro, Mesa and the community colleges do better. Staff would support scaling this inflationary portion of funding up to the extent the Committee determines it has sufficient resources (though staff finds the institutions’ proposed increase of 9.6 percent extreme).

The other component of the staff proposal--a tuition buy down for access institutions--has not been previously discussed. Staff also did not discuss this in advance with the institutions, and thus staff anticipates that there will be further conversations with the institutions about the proposal after the staff figure setting.

The buy down amounts for Metro and the Community College System are based on 3.0 percent of the institutions’ FY 2021-22 resident undergraduate tuition revenue, as projected by the institutions for the most recent tuition forecast. The buy-down for Colorado Mesa University is based on the amount included in a proposal submitted by Mesa for a RISE grant and that has been proposed to JBC members in the past. The proposal is to buy-down tuition for students in technical educatio n programs at CMU’s Colorado Western Community College to the level at the community college system.

RECOMMENDED TUITION BUY-DOWN

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RESIDENT UG TUITION FY 22 % INCREASE ON CASH FUNDS INSTITUTIONAL GF INCREASE FY 2020 BASE DECREASE FORECAST GENERAL FUND (INCLUDES 3.0% INCREASE) Colorado Mesa University $1,714,564 5.3% (1,714,564) 53,978,238 (3.2%) Metropolitan State University 3147182 4.9% (3,147,182) 104,906,065 (3.0%) Community College System 7318611 3.9% (7,318,611) 243,953,696 (3.0%) Total $12,180,357 ($12,180,357)

RATIONALE FOR STAFF ALLOCATION RECOMMENDATION: Cost Increases: As outlined above, staff agrees that an adjustment to address inflationary pressures at the institutions is appropriate, particularly if the Committee is establishing a common policy that supports salary and benefits increases for other state staff. The proposal from the boards for allocating an increase seems a reasonable use of the new higher education funding model for funding an inflationary increase and consistent with the JBC’s expectations last year. It also provides a “bump” for access institutions, as it has been applied by staff.

Support for Access Institutions: Staff has been supportive over the years of efforts to direct a larger share of state support to institutions that serve the students with the greatest challenges: the “access” institutions. This is not because staff believes that other institutions are over-funded by the State but rather because, with few state resources to go around, the large research institutions have been far more effective at bringing in other resources, including through their recruitment of nonresident students. State support per resident student is not large at the research institutions. Indeed, state support per resident student FTE is less at most CU campuses than at Metropolitan State University of Denver. However, the state institutions that are not “R1” research institutions simply have fewer alternatives for supporting their operations, and their primary alternative to state support is tuition from students who are often already struggling both financially and academically. The access institutions have important weaknesses, including abysmal graduation rates, but their ability to improve these rates is dependent both on the support services they can provide and the level of financial strain faced by their students.

STATE GENERAL FUND PER RESIDENT STUDENT FTE AND TOTAL FUNDS PER TOTAL STUDENT FTE STATE FUNDING PER TOTAL FUNDING PER

RESIDENT STUDENT FTE TOTAL STUDENT FTE Community College System $4,086 $9,735 MSU Denver 5,276 12,583 Colorado Mesa 5,021 14,174 CU Denver 3,854 18,474 UCCS 3,891 16,672 CU Boulder 4,898 29,247

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EDUCATION AND GENERAL REVENUE SOURCES PER STUDENT FTE BY TYPE OF INSTITUTION FY 2019-20 $30,000

$25,000 Other (e.g., $20,000 indirect cost recoveries) $15,000 Non-resident $10,000 Tuition

$5,000 Resident $0 Tuition Research Small 4-year Large 4-year Community Institution Institution Institution College (CU System, (Adams, (MSU, System CSU Ft Western) CM U) Collins, Mines, UNC)

Keeping Tuition Rates Lower for Students Who Already Face Obstacles: Both national and state data have clearly demonstrated the disproportionate impact of the pandemic on low income and marginalized

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student populations. This has played out in the more severe drop-off in enrollment that has occurred at the access institutions as compared to other institutions.

• As outlined in the staff briefing document, in Fall 2019, total student FTE enrollment in the community college system had fallen by nearly 8.0 percent. For comparison, enrollment at the Colorado School of Mines had increased by 1.7 percent.

• During their budget hearings, the institutions serving access populations emphasized how severely those of their students who are poor, under-represented minorities, or first generation students had been affected compared to other students. The Community College System described the situation clearly:

“The most significant aspects of the enrollment changes for CCCS were the impacts on low-income/Pell-eligible students, underrepresented minority students, and first- generation students. For example, from fall 2019 to fall 2020 the headcount for Pell eligible students dropped by 13.5% from 23,654 to 20,464 (3,190 students) while non- Pell eligible students dropped by 3.3% from 57,281 to 55,369 (1,912 students). In addition, our headcount over the last year for Black or African American students has dropped by 9.7% from 4,575 to 4,132 (443 students) while the headcount for White students dropped by 4.3% from 43,508 to 41,659 (1,849 students). However, the most significant enrollment change occurred with our first-generation students. From fall 2019 to fall 2020 the headcount for first-generation students dropped by 11.8% from 41,126 to 36,282 (4,844 students) while non-first generation headcount dropped by 0.6% from 39,809 to 39,551 (258 students). This highlights the disproportional impact the COVID-19 pandemic has had on certain student populations, similar to how the pandemic has financially impacted low-wage and high-wage workers differently.”

The pattern is similar to the national experience, based on National Student Clearinghouse reports. https://nscresearchcenter.org/stay-informed/

• Low income students are usually more price sensitive and more debt-averse than other students. While 3.0 percent may not make or break a student’s decision to attend and complete a college education, the long term trend of increasing tuition undoubtedly has an impact on whether low-income students pursue a college education. In fact, tuition costs for very low income students are typically fully covered by state and federal financial aid at the community colleges and by state, federal and institutional financial aid a 4-year institutions. Nonetheless, the top-line price can still serve as a discouragement for students who are unfamiliar and overwhelmed by the complex world of college pricing and financial aid.

• For FY 2020-21, most state institutions kept tuition levels flat in recognition of the challenges faced by their students. The notable exceptions were the Community College System, Metro, Adams and Western. The Community College System increased tuition by 3.0 percent for the full year. MSU Denver increased tuition by 3.0 percent for the second half of the year. In all cases, staff believes that the institutions which increased tuition during the pandemic did so because they did not see an alternative from a financial perspective. Staff believes that most state institutions are currently planning to increase tuition by 3.0 percent. Particularly given that the community

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college system and MSU increased tuition when most other institutions did not, staff would like to see their students spared additional tuition increases in FY 2021-22.

• With respect to Colorado Mesa University: Staff notes that for students who live in CMU’s designated catchment area, technical classes are currently considerably more expensive than for students who live elsewhere in the state, because tuition rates do not differ for students enrolled on the Western Community College campus as opposed to its 4 year degree campus. Buying down tuition rates for technical classes at CMU will provide more equitable access for people living in and around Grand Junction.

• In the last few years, posted tuition and fees for many of the four year institutions, including CU Boulder, the Colorado School of Mines, and the small rural four-years have been declining after adjusting for inflation. However, tuition and fees at the access institutions, including the community colleges and the Metro have been increasing as they have worked to manage fixed costs and declining student populations. Tuition and mandatory fees averaged $5,108 at the community colleges in FY 2020-21 (fees differ by campus). Metro’s cost as reported by the Department is $9,437 for FY 2020-21; however, it has suspended some fees due to the pandemic and is currently reporting an annualized tuition and fee cost of $9,180 for spring 2021.

• Finally, staff notes that from a practical perspective, tuition rates at access institutions are typically driven to a considerable degree by state General Fund allocations. Thus, even under normal circumstances they would not have yet set tuition rates for next year and could easily adjust to a tuition buy-down. This is less the case for the more sophisticated four year institutions that put substantial effort into “packaging” financial aid, and, by this time in the year are often locking in planning around the tuition caps in the Executive Request.

STAFF ANALYSIS: FINANCIAL AID Given that the Committee has moved forward with S.B. 21-083, the question of whether there will be aligned financial aid support or not is effectively settled. However, the Committee does have some flexibility in which type of financial aid to support. As described above, the staff recommendation for FY 2021-22 is to use any aligned financial aid increases to support Need Based Aid, except that staff recommends directing $1.0 million of the total to restore funds for the Colorado Opportunity Scholarship Initiative to the FY 2019-20 funding level.

The calculation for the alignment, pursuant to S.B. 21-083 is based on the base figures below. Any amount above the base governing board funding for FY 2019-20 must be matched with a proportionate increase to financial aid, which is calculated on the base FY 2020-21 financial aid figure below.

BASE FOR ALIGNED FINANCIAL AID INCREASE PER S.B. 21-083 SHARE OF

TOTAL Base FY 2019-20 Governing Board Support (proportionate financial aid increase for any $856,230,905 81.5% amount above this) Includes: College Opportunity Fund program (except COF stipends at private institutions) and General Fund grants for the local district colleges and area technical colleges

Base FY 2020-21 Financial Aid. Includes all appropriations for programs authorized in Article 3.3 of Title 23. This currently includes Need Based Aid, Work Study, the 193,849,624 18.5%

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BASE FOR ALIGNED FINANCIAL AID INCREASE PER S.B. 21-083 SHARE OF

TOTAL Dependent Tuition Program, the Colorado Opportunity Scholarship Initiative, and Career and Technical Education scholarships Total $1,050,080,529

 R2 TUITION SPENDING AUTHORITY INCREASE

Note: Tuition spending authority only directly affects the state-operated governing boards. However, because the need for tuition spending authority is closely related to the General Fund operating request for the institutions, staff has included it directly below R1.

REQUEST: The request is for an additional $74,406,003 cash funds spending authority for state public institutions’ tuition revenue for FY 2021-22. The request proposes that Long Bill footnotes restrict resident undergraduate tuition increases to 3.0 percent, while allowing institutions to request permission through the Colorado Commission on Higher Education for a greater increase. The request includes no restrictions on non-resident or graduate tuition or mandatory fees. The request indicates that it “seeks to ensure affordability and value for students while providing some flexibility for institutions to continue managing through enrollment uncertainty”.

RECOMMENDATION: Staff recommends the request that undergraduate resident tuition be restricted to a 3.0 percent increase via assumptions expressed in Long Bill footnotes. However:

• Staff does not recommend that the Colorado Commission on Higher Education be allowed to authorize higher tuition increases. Staff believes any additional flexibility for tuition is most appropriately addressed by the General Assembly when it is determining the level of General Fund support for the institutions.

• Staff is aware that the University of Northern Colorado (UNC) would like the Committee to allow for a higher tuition increase due to their particular financial situation. It has indicated interest in tuition flexibility of up to 7.0 percent (see letter attached). Staff recommends that any related decision be reflected in a tuition footnote for UNC, rather than allowing the Commission to authorize greater increases. Due to late notice about this request as well as questions about to what extent additional federal funding that may reduce UNC’s desire to increase tuition this year, staff will make a related recommendation through the comeback process.

• Any institution receiving an explicit tuition “buy down” will need a footnote specifying the related assumptions (e.g., no increase or reduced tuition (Colorado Mesa option). If the Committee proceeds with the staff recommendation, footnotes would specify the expectation that the Community College System and Metro will not increase undergraduate resident tuition in FY 2021-22 and that CMU will reduce tuition for specified technical education programs.

• Staff recommends assuming that Fort Lewis College will not increase nonresident tuition. Consistent with recent Committee practice, staff has not specified this in a footnote; however,

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staff has calculated the tuition spending authority for Fort Lewis College to incorporate this assumption.

In total, staff recommends increasing tuition spending authority for FY 2021-22 by $116,664,443.

FOOTNOTE ASSUMPTIONS - INCLUDING RESIDENT GRADUATE AND NONRESIDENT INCREASES ASSUMPTION USED IN ASSUMPTIONS DESCRIBED IN FOOTNOTE TO LONG CALCULATIONS BILL RESIDENT NONRESIDENT Adams State University 3.0% 3.0% 3.0% for undergraduate residents. Colorado Mesa University 3.0% less CTE 3.0% 3.0% for undergraduate residents less specified class amount career and technical classes Metropolitan State University of 0.0% 3.0% 0.0% for undergraduate residents. Denver Western State Colorado 3.0% 0.0% 3.0% for undergraduate residents. University Colorado State University System 3.0% 3.0% 3.0% for undergraduate residents. Fort Lewis College 3.0% 0.0% 3.0% for undergraduate residents. University of Colorado System 3.0% 3.0% 3.0% for undergraduate residents. Colorado School of Mines 3.0% 3.0% n/a University of Northern Colorado 3.0% 3.0% 3.0% for undergraduate residents. [May be subject to change via a “comeback”] Community College System 0.0% 3.0% 0.0% for undergraduate residents.

The specific cash fund adjustments for the recommendation are summarized below. See the appendix to this packet for copies of the projections from the institutions and Legislative Council Staff used in developing these figures.

Each year, the institutions submit their estimates of tuition and fee revenue for the current fiscal year and their forecast for the next year. Legislative Council Staff review actual enrollment data and discuss projections with the institutions to develop a separate tuition and enrollment forecast model. Staff has at times used the LCS model and at times the institutions’ model.

For the FY 2020-21 Long Bill supplemental and FY 2021-22 Long Bill staff is recommending using the institutions’ forecasts, which now include more helpful detail than in the past on resident, nonresident, graduate and undergraduate tuition. In recent years, the institutions’ projections of revenue for the current fiscal year have been better than Legislative Council Staff’s, which is not surprising, given their day-to-day management of revenue and expenditures. LCS’s overall projection for the current year is $37.6 million (1.6 percent) above the institutions’, reflecting an overall more optimistic expectation for the balance of the year. Its forecast is very similar in total to the institutions for FY 2021-22 (0.6 percent difference), though there is considerable variation by institution. All the institutions have expressed a high degree of uncertainty on FY 2021-22 projections. Although staff is using the institutions’ forecast, it should be noted that the institutional forecasts are often improved by institutions’ work with LCS. At least two institutional forecasts this year were updated as a result of communication with LCS about the reasonableness (or not) of the figures provided.

The figures below reflect the decrease in the forecast for FY 2020-21, which staff recommends be adopted as a Long Bill supplemental, followed by the new FY 2021-22 forecast, which incorporates a large increase over the FY 2020-21 revised forecast but is still below the original FY 2020-21 pre-

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pandemic projection. The staff recommendation for FY 2021-22 also includes adjustments for the proposed tuition revenue buy-down.

FY 2020-21 LONG BILL SUPPLEMENTAL - TUITION FORECAST REVISION ORIGINAL FY REVISED FY 21 PERCENTAGE 21 CHANGE FORECAST CHANGE FORECAST Adams State University 20,156,387 21,183,079 1,026,692 5.1% Colorado Mesa University 74,194,937 72,043,336 (2,151,601) -2.9%

Metropolitan State University of Denver 118,875,507 111,343,670 (7,531,837) -6.3% Western State Colorado University 18,799,307 16,563,599 (2,235,708) -11.9%

Colorado State University System 513,161,489 435,367,948 (77,793,541) -15.2%

Fort Lewis College 40,642,080 41,909,810 1,267,730 3.1%

University of Colorado System 1,161,280,615 1,070,573,330 (90,707,285) -7.8% Colorado School of Mines 163,225,233 159,656,471 (3,568,762) -2.2% University of Northern Colorado 87,315,949 77,696,289 (9,619,660) -11.0% Community College System 282,548,629 273,474,970 (9,073,659) -3.2%

Total Tuition Revenue $2,480,200,133 $2,279,812,502 ($200,387,631) -8.1%

FY 2020-21 AND FY 2021-22 RECOMMENDED TUITION CASH FUNDS APPROPRIATION

FY 2020-21 PERCENTAGE FY 2021-22 CHANGE (REVISED)* CHANGE Adams State University 21,183,079 20,363,600 (819,479) -3.9% Colorado Mesa University 72,043,336 68,587,703 (3,455,633) -4.8% Metropolitan State University of Denver 111,343,670 114,116,513 2,772,843 2.5% Western State Colorado University 16,563,599 16,967,193 403,594 2.4% Colorado State University System 435,367,948 480,981,986 45,614,038 10.5% Fort Lewis College 41,909,810 42,900,665 990,855 2.4% University of Colorado System 1,070,573,330 1,144,427,281 73,853,951 6.9% Colorado School of Mines 159,656,471 164,738,748 5,082,277 3.2% University of Northern Colorado 77,696,289 77,180,973 (515,316) -0.7% Community College System 273,474,970 265,206,204 (8,268,766) -3.0%

Total Tuition Revenue $2,279,812,502 $2,395,470,866 $115,658,364 5.1% *Includes recommended Long Bill Supplemental

The tables below show two viewpoints: (1) Institution viewpoint - The total revenue from General Fund and cash fund sources included in the Long Bill and how this changes by governing board under staff’s recommendation; and (2) The student viewpoint - the projected average weighted tuition and fees that will be paid per student.

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INSTITUTION VIEWPOINT: TOTAL REVENUE AND TOTAL REVENUE PER STUDENT (EDUCATIONAL AND GENERAL - EXCLUDES FEDERAL SUPPORT)

FY 2021-22

LONG BILL TOTAL TOTAL E&G REVENUE STUDENT REVENUE PER SFTE FTE Adams State University $42,634,148 2,298.3 $18,551

Colorado Mesa University 104,151,959 7,309.1 14,250 Metropolitan State University 212,982,213 12,651.7 16,834

Western State Colorado University 38,286,650 1,906.7 20,080

Colorado State University System 735,872,176 28,177.7 26,115 Ft. Lewis College 62,592,901 3,029.2 20,663 University of Colorado System 1,504,223,710 58,979.4 25,504 Colorado School of Mines 206,283,270 6,652.0 31,011 University of Northern Colorado 143,036,652 7,141.8 20,028 Community College System 497,677,723 46,216.1 10,768 Total or Weighted Avg. $3,640,916,027 174,362.0 $20,881

STUDENT VIEWPOINT: FY 2021-22 PROJECTED TUITION AND MANDATORY FEE REVENUE PER STUDENT FTE

RESIDENT NONRESIDENT TUITION TUITION FEES Adams State University $7,703 $11,091 $2,061 Colorado Mesa University 8,878 12,066 0 Metropolitan State University 8,392 23,462 2,345

Western Colorado University 6,326 15,300 2,978 Colorado State University System 11,925 28,536 2,808 Fort Lewis College 7,136 19,532 1,764 University of Colorado System 12,774 35,393 1,637 Colorado School of Mines 16,842 35,364 2,331 University of Northern Colorado 9,349 19,732 2,484

Community College System 5,389 13,220 403

 R5 RESTORE CYBERCODING CRYPTOLOGY PROGRAM

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REQUEST: The Department requests that funding for the Cyber Coding Cryptology program be restored by providing an increase of $2,000,000 General Fund for College Opportunity Fund Limited Purpose Fee for Service contracts, with these funds reappropriated to six governing boards. The request would bring appropriations back to the level in place for this program in FY 2019-20.

RECOMMENDATION: Staff recommends that the $2.0 million General Fund and associated reappropriated funds be restored as requested.

ANALYSIS:

Background: The Cyber Coding Cryptology Program was established in 2018 with the passage of S.B. 18-086, Cyber Coding Cryptology for State Records. The goal of the program is to establish and expand programs related to cybersecurity and distributed ledger technologies, as well as provide scholarships to students enrolled in those programs.

S.B. 18-086 appropriated a total of $5.1 million General Fund across six governing boards starting in FY 2018-19, with the funding reduced by $2.0 million for FY 2020-21.

• Pursuant to Section 24-33.5-1904, C.R.S., since FY 2018-19, the six governing boards have used the funds appropriated in the bill and in the subsequent Long Bills to hire faculty, develop facilities, create student internships, award student scholarships, host conferences and summer camps, and offer presentations and seminars on cybersecurity. The participating governing boards have also raised additional funds to supplement state investment.

• The University of Colorado at Colorado Springs (UCCS) has the most robust program, tied to its relationship with the National Cybersecurity Center (NCC). It reports over 700 UCCS students with cybersecurity degrees are working in the industry, and, as reflected in the table below, it brought in $19 million in grants in 2020. Grants include a 4-year $6 million Department of Labor grant for 5,000 cybersecurity apprentices and a $3 million 3-year cybersecurity faculty development grant from the National Security Agency, among others. UCCS also leads the Mountain West Cybersecurity Consortium involving over 40 post-secondary institutions.

• The other institutions report developing degree majors and minors and certificates in cybersecurity in which growing numbers of students enroll, funding scholarships for students and running training programs in the field for secondary school students and professionals. Colorado State University reported bringing in $7.7 million in other funding in FY 2019-20, and the other institutions all reported brining in some matching funding, though on a far smaller scale.

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• The University of Colorado at Colorado Springs directs a portion of its funds to the National Cybersecurity Center. In FY 2019-20, UCCS allocated $850,000 to the NCC, which the NCC used to support administrative FTE, fundraising, and overhead costs. Established in 2016, the NCC operates several programs including the Space Information Sharing and Analysis Center, the Cyber Education Student Alliance, Secure the Vote, the Colorado Cyber Resource Center, and the Colorado Secure SMART Cities Initiative.

• In response to JBC questions at the institutions’ budget hearings they reported:

o Despite the FY 2020-21 reduction in support and pandemic-related changes, they did not cut their programs (indicating to JBC staff that the programs already are significantly self- sustaining); o Most indicated that they could make the programs self-sustaining on tuition and/or external grants over the longer term, though they also highlighted reasons they thought near-term state support was needed. . A number of the less well financed institutions emphasized the need for additional support in the near term and potentially longer term. For example, the community college system noted that it would need more frequent computer replacements to support the program and that the state funds allow for the enhancement of program quality. Metropolitan State University noted the need for the additional funds to be able to employ full-time faculty, and Western indicated that it was paying for a second degree for a faculty member to ensure faculty capacity. Colorado Mesa indicated that they need near-term funds as they grow their program . The larger programs at the University of Colorado and Colorado State University all indicated that the programs will ultimately be self-sustaining but that the funding in the near-term helps the programs develop. For example, the CSU system stated that “All five areas are heading in the direction of becoming self- sustaining but are counting on full funding from the State over the five years to provide the time needed to develop funding and self-sustaining models for their activities.”

The Department of Higher Education is required to submit a report on the program October 1, 2019, and on or before each October thereafter, identifying progress toward metrics specified in the bill. The October 1, 2020 report included the following information on expenditures and activities. Some programs reported not fully expending the appropriations during the fiscal year due in large part to impacts of the pandemic. The Department of Higher Education report indicated that the institutions indicated their intent to “catch up” spending in FY 2020-21.

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Joint Business Affairs and Labor Committee Hearings and Recommendation: At the 2021 SMART Act hearing, and at such hearing every three years thereafter, the Joint Business Committee is required to make a recommendation to the Joint Budget Committee regarding whether the funding received by the institutions of higher education should continue in subsequent fiscal years.

The Joint Business Committees met on January 27, 2021, heard presentations from all of the institutions participating in the program. The presentations highlighted the rapid growth in the industry, the importance of state support in seeding the programs across the state, and the signal provided by state support. The reduced funding from the State was described by one institution as “slowing acceleration” of the program. However, given the student and industry demand for IT security programs and the grant funding gathered by the institutions, the institutions generally did not eliminate or reduce their programs in light of the cut to state support in FY 2020-21.

The Joint Business Committee voted unanimously to recommend that the JBC approve the request to fully restore funding for the program and continue this for each of the next three years. The Committee submitted a letter to the JBC to this effect dated January 28, 2021.

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 NP4 INCREASED MEDICAID MATCH FOR FINANCING PAYMENTS AND CORRECTION TO ANNUALIZATION H.B. 20-1385 (USE OF INCREASED MEDICAID MATCH)

REQUEST: The Department requested a reduction of $4,452,383 In its NP4 Increased Medicaid Match for Financing Payments request and failed to annualize (restore) a reduction of $2,021,766 included in H.B. 20-1385 (Increased Use of Medicaid Match)

RECOMMENDATION: Staff recommends that the FY 2021-22 Long Bill appropriations for College Opportunity Fund Fee-for-service contracts and the Regents of the University of Colorado restore reductions that were based on H.B. 20-1385, as these reductions were only authorized for FY 2020- 21. If the Committee chooses to approve the prioritized request submitted by the Department of Health Care Policy and Financing to make a similar adjustment for FY 2021-22 (the adjustment associated with DHE’s NP4), the Committee will need to sponsor a bill that modifies this statutory provision accordingly. The associated General Fund reductions would be accomplished through that bill. Staff anticipates that the Committee will discuss this potential legislation on March 4, 2021, as part of the JBC Staff Figure Setting presentation for the Department of Health Care Policy and Financing.

ANALYSIS: House Bill 20-1385 adjusted funding for various programs that use external cash funds to match federal funds for FY 2020-21. These changes allowed the state to capture enhanced federal Medicaid match funds authorized in federal stimulus legislation while keeping total funding for these programs at the previously-authorized level. One of the affected programs accesses federal Medicaid funds by transferring General Fund from the line item for the Regents of the University of Colorado to the Department of Health Care Policy and Financing. To ensure the State benefited from the enhanced federal match rate, H.B. 20-1385 reduced the General Fund appropriation in the Department of Higher Education for the Regents of the University of Colorado by $2,021,766 for FY 2020-21 only.

Under current law, this adjustment is eliminated in FY 2021-22. Staff thus recommends annualizing (restoring) $ 2,021,766 General Fund in the in the College Opportunity Fund Program Fee-for-service Contracts with State Institutions for Specialty Education Programs line item and reappropriating this amount to the Regents of the University of Colorado.

The Department’s request indicates that the benefit to the General Fund of continuing the H.B. 20- 1385 adjustment in FY 2021-22 would be $4,452,383. However, the request overstated the net impact of such legislation because the Department failed to first annualize (eliminate) the impact of H.B. 20- 1385.

 CORRECTION TO ANNUALIZATION FOR S.B. 16-196 INCLUSIVE HIGHER EDUCATION PILOT

REQUEST: The Department did not request reductions for Limited Purpose Fee-for-service Contracts for the higher education institutions for the Inclusive Higher Education Pilot Program.

RECOMMENDATION: The Inclusive Higher Education Pilot Program created in S.B. 16-196 repeals at the end of FY 2020-21 pursuant to Section 23-75-106, C.R.S. This program is designed to enable students with intellectual and developmental disabilities to attend postsecondary institutions. The pilot

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program is operated at the University of Northern Colorado ($75,000 appropriation), Arapahoe Community College ($75,000 appropriation), and the University of Colorado at Colorado Springs ($100,000 appropriation). Staff believes the pilot has been successful. However, since statutory authority for the program expires at the end of FY 2020-21, the program cannot be funded through the Long Bill. Interested legislators will need to seek new legislation if they wish to reauthorize funding for the program. Based on the program’s repeal, the staff recommendation reduces General Fund appropriations for Limited Purpose Fee-for-service Contracts by $250,000 and reduces the reappropriated funds appropriated to affected governing boards by a total of $250,000, allocated based on current funding for the program.

 INDIRECT COST COLLECTION ADJUSTMENTS

REQUEST: The Department did not submit a formal request for an indirect cost collection adjustment. However, consistent with the usual practice, it submitted the data necessary for the staff to make related funding adjustments in February 2021.

RECOMMENDATION: Based on the data submitted by the Department, staff recommends increasing the Department’s indirect cost collections line item and using these collections to offset General Fund otherwise required in the Department. The adjustment, described in greater detail below, results in a total increase in indirect cost collections of $89,118 in FY 2021-22 and a matching decrease in General Fund otherwise required in this department. Amounts for statewide indirect cost collections match previously-approved Committee common policy for this department.

BACKGROUND: The Department does not formally request indirect cost collection adjustments, but it submits an updated plan each year prior to figure setting. The FY 2021-22 figures incorporate a new Departmental indirect cost collection structure that took effect in FY 2020-21, as well as statewide indirect cost collections.

Statewide indirect cost collections from higher education institutions, determined based on statewide agreements and processes, offset General Fund otherwise required in this department. These statewide indirect cost collections are significant, as statewide recoveries associated with Department of Personnel services to all of the higher education institutions are used to offset General Fund otherwise required for Department administration.

Departmental services to higher education institutions and other entities are also largely offset by departmental indirect cost collections. The Colorado Department of Higher Education differs from most other state departments in that its indirect cost collection structure for departmental functions is not driven by federal requirements or negotiated with a federal “cognizant agency”. However, nearly 80 percent of departmental operating costs for core administration functions are covered by indirect cost collections, drawn primary from the state governing boards. The department’s activities are paid for by the governing boards, much as Department of Personnel or OIT staff are supported by the state agencies that they support.

Based on work conducted by the Department in response to a FY 2019-20 RFI, a new departmental indirect cost model was adopted beginning in FY 2020-21. The model is described in the appendix to this document. The Department’s work in response to the FY 2019-20 RFI found that the previous indirect cost collection plan was consistent with standard accounting practice and generally followed

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best practices identified from other indirect cost allocations. However, the report and subsequent submissions recommended a significant number of changes and improvements to define elements of the cost pool and how they should be allocated. In particular, services related to departmental federal grants, as well as services for the local district colleges and area technical colleges, are now subject to indirect cost collections.

As part of the process for transitioning to the new indirect cost collection plan, staff included a one- time adjustment to reduce the amount owed by the area technical colleges and the local district colleges in FY 2020-21 by 50.0 percent ($95,394), as they did not expect this change. In FY 2021-22 these entities pay their full share, leading to an additional General Fund offset. The total also reflects reductions in statewide collections and increases in departmental collections, as reflected below. The increase in Departmental collections is primarily driven by the formal inclusion of costs associated with H.B. 19-1196 (a financial aid tool for those not eligible for federal financial aid) in departmental indirect cost collections effective FY 2021-22.

Recommended Changes:

INDIRECT COST RECOVERIES: FY 2021-22 BUDGET CHANGES FOR DEPARTMENTAL AND STATEWIDE INDIRECT COST COLLECTIONS FY 22 Net General FY 2021 FY 2022 Above/(below) Fund FY 21 Impact Statewide Indirect Cost Collections $3,386,728 $3,311,377 ($75,351) $75,351 Departmental Indirect Cost Collections 3,981,057 4,050,132 69,075 (69,075) Total Plan Changes $7,367,785 $7,361,509 (6,276) 6,276

One-time adjustment for ATC/LDC transition (95,394) 0 95,394 (95,394) Total $7,272,391 7,361,509 $89,118 ($89,118)

In sum, fiscal impact on the budget of the proposed changes include:

• An increase of $89,118 total funds for the indirect cost assessment line item. • A net reduction of $89,118 General Fund due to the offset of departmental and statewide indirect costs collected.

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(1) DEPARTMENT ADMINISTRATIVE OFFICE

This division includes funding for centrally appropriated items for: • the Colorado Commission on Higher Education and central administration for the Department of Higher Education and the GEAR-UP program • the Division of Private Occupational Schools; • and History Colorado.

These centrally appropriated items include salary survey, risk management, leased space, health benefits, and other miscellaneous expenses. These expenses are not appropriated centrally for the higher education institutions or other divisions within the Department. The sources of cash funds include limited gaming revenues deposited in the State Historical Fund and various fees. The source of reappropriated funds is statewide and departmental indirect cost recoveries.

DEPARTMENT ADMINISTRATIVE OFFICE TOTAL GENERAL CASH REAPPROPRIATED FEDERAL

FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 Appropriation FY 2020-21 Appropriation $5,213,901 $332,334 $3,099,995 $1,192,140 $589,432 0.0 TOTAL $5,213,901 $332,334 $3,099,995 $1,192,140 $589,432 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $5,213,901 $332,334 $3,099,995 $1,192,140 $589,432 0.0 NP1 DPA Center for Organizational Effectiveness 0 0 0 0 0 0.0 NP3 OIT budget request package (39,151) 0 (39,151) 0 0 0.0 Annualize prior year budget actions 54,884 54,884 0 0 0 0.0 Annualize prior year legislation 478,087 25,566 233,519 152,559 66,443 0.0 Centrally appropriated line items 213,804 154,539 46,775 207,513 (195,023) 0.0 TOTAL $5,921,525 $567,323 $3,341,138 $1,552,212 $460,852 0.0

INCREASE/(DECREASE) $707,624 $234,989 $241,143 $360,072 ($128,580) 0.0 Percentage Change 13.6% 70.7% 7.8% 30.2% (21.8%) 0.0%

FY 2021-22 EXECUTIVE REQUEST $5,865,111 $548,259 $3,261,836 $1,561,107 $493,909 0.0 Request Above/(Below) ($56,414) ($19,064) ($79,302) $8,895 $33,057 0.0 Recommendation

DECISION ITEMS - DEPARTMENT ADMINISTRATIVE OFFICE

 COMMON POLICY ITEMS, NON-PRIORITIZED REQUESTS FOR CENTRALLY- APPROPRIATED ITEMS (NP1, NP3, NP BA1, NP BA2), AND FUNDING SPLITS

The request includes: • NP1 DPA Center for Organizational Effectiveness • NP3 OIT Budget Request Package • NP BA1 Salary Survey Adjustment • NP BA2 Health Live Dental Adjustment

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• Other technical adjustments requested to common policy line items

The Staff recommendation incorporates common policy decisions as adopted to-date. Staff requests permission to make further adjustments to amounts shown based on common policy decisions that are still pending, including adjustments to funding sources for these common policy items if required.

LINE ITEM DETAIL — DEPARTMENT ADMINISTRATIVE OFFICE

HEALTH, LIFE, AND DENTAL

This line item funds the State's contribution to state employee medical and dental plans. The request is made for the entire Department, based on the recommended contribution rates as submitted by the State Personnel Director and enrollment figures. As for all centrally-appropriated items in this section, the amounts do not fund benefits for employees of the state higher education institutions and include only Colorado Commission on Higher Education (CCHE), Division of Private Occupational Schools, and History Colorado staff.

The health, life, dental insurance benefit for staff of the Colorado Commission on Higher Education (CCHE) differs from the benefit provided for other state staff, as CCHE contracts for its health, life, and dental benefit through the community college system. Over 100 Department staff are covered under the community college plans (includes "off budget" staff for CollegeAssist, CollegeInvest, College in Colorado, and grant-funded programs). This arrangement has been in place for at least 20 years and was originally pursued because it provided a better benefit at a lower cost to the State and employee.

The Department has been required to demonstrate periodically that the costs incurred by the state are close to the amounts that would be required if for all staff, whether or not they are enrolled in the state-sponsored health plans. An annual RFI requests that the Department submit its H/L/D template in the same format as other state agencies so that, as for other agencies, allocations are based on employee selections x amount per selection and can be compared to other agencies on that basis.

STATUTORY AUTHORITY: Sections 24-50-611 and 24-50-603 (9), C.R.S.

REQUEST: The Department requests an appropriation of $2,280,656 total funds for this line item.

RECOMMENDATION: The staff recommendation is reflected in the table below. The difference between the request and recommendation is a technical error in the formal Department submission. The Department has confirmed that the figures presented by JBC staff during common policy figure setting are correct.

DEPARTMENT ADMINISTRATIVE OFFICE, HEALTH, LIFE, AND DENTAL TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $2,148,164 $85,156 $1,319,564 $339,958 $403,486 0.0 TOTAL $2,148,164 $85,156 $1,319,564 $339,958 $403,486 0.0

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DEPARTMENT ADMINISTRATIVE OFFICE, HEALTH, LIFE, AND DENTAL TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $2,148,164 $85,156 $1,319,564 $339,958 $403,486 0.0 Centrally appropriated line items 60,221 88,049 30,138 108,606 (166,572) 0.0 Annualize prior year budget actions 54,884 54,884 0 0 0 0.0 TOTAL $2,263,269 $228,089 1349702 $448,564 $236,914 0.0

INCREASE/(DECREASE) $115,105 $142,933 $30,138 $108,606 ($166,572) 0.0 Percentage Change 5.4% 167.8% 2.3% 31.9% (41.3%) 0.0%

FY 2021-22 EXECUTIVE REQUEST $2,280,656 $217,133 $1,349,702 $448,564 $265,257 0.0 Request Above/(Below) Recommendation $17,387 ($10,956) $0 $0 $28,343 0.0

SHORT-TERM DISABILITY

This line item is used to purchase short-term disability (STD) coverage. Pursuant to Section 24-50- 609 (13), C.R.S., short-term disability provides for a partial payment of an employee's salary if an individual becomes disabled and cannot perform his or her duties. This benefit is available to all employees and is paid entirely by the State. The coverage provides for a 30-day waiting period, and it will pay 60.0 percent of an employee's salary for a maximum of five months.

STATUTORY AUTHORITY: Sections 24-50-611, C.R.S., and 24-50-603 (13), C.R.S.

REQUEST: The Department requests an appropriation of $20,907 total funds for this line item, including an OSPB common policy adjustment.

RECOMMENDATION: The staff recommendation is reflected in the table below and is based on Committee common policy.

DEPARTMENT ADMINISTRATIVE OFFICE, SHORT-TERM DISABILITY TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $21,860 $1,528 $13,337 $3,911 $3,084 0.0 TOTAL $21,860 $1,528 $13,337 $3,911 $3,084 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $21,860 $1,528 $13,337 $3,911 $3,084 0.0 Centrally appropriated line items (769) 377 (354) 360 (1,152) 0.0 TOTAL $21,091 $1,905 $12,983 $4,271 $1,932 0.0

INCREASE/(DECREASE) ($769) $377 ($354) $360 ($1,152) 0.0 Percentage Change (3.5%) 24.7% (2.7%) 9.2% (37.4%) 0.0%

FY 2021-22 EXECUTIVE REQUEST $20,907 $1,878 $12,689 $4,252 $2,088 0.0 Request Above/(Below) Recommendation ($184) ($27) ($294) ($19) $156 0.0

AMORTIZATION EQUALIZATION DISBURSEMENTS

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This line item increases the effective state contribution to the Public Employees’ Retirement Association (PERA) pursuant to S.B. 04-257 (Section 24-51-111, C.R.S.).

STATUTORY AUTHORITY: Section 24-51-411, C.R.S.

REQUEST: The Department requests an appropriation of $700,664 total funds for this line item, including an OSPB common policy adjustment.

RECOMMENDATION: The staff recommendation is reflected in the table below and is based on Committee common policy.

DEPARTMENT ADMINISTRATIVE OFFICE, S.B. 04-257 AMORTIZATION EQUALIZATION DISBURSEMENT TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $701,277 $48,848 $445,971 $115,027 $91,431 0.0 TOTAL $701,277 $48,848 $445,971 $115,027 $91,431 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $701,277 $48,848 $445,971 $115,027 $91,431 0.0 Centrally appropriated line items (613) 15,440 (4,787) 19,113 (30,379) 0.0 TOTAL $700,664 $64,288 $441,184 $134,140 $61,052 0.0

INCREASE/(DECREASE) ($613) $15,440 ($4,787) $19,113 ($30,379) 0.0 Percentage Change (0.1%) 31.6% (1.1%) 16.6% (33.2%) 0.0%

FY 2021-22 EXECUTIVE REQUEST $694,492 $63,419 $431,179 $133,551 $66,343 0.0 Request Above/(Below) Recommendation ($6,172) ($869) ($10,005) ($589) $5,291 0.0

SUPPLEMENTAL AMORTIZATION EQUALIZATION DISBURSEMENTS This line item increases the effective state contribution to the Public Employees Retirement Association (PERA) pursuant to S.B. 06-235 (Section 24-51-111, C.R.S.)

STATUTORY AUTHORITY: Section 24-51-411, C.R.S.

REQUEST: The Department requests an appropriation of $715,301 total funds for this line item, including an OSPB common policy adjustment.

RECOMMENDATION: The staff recommendation is reflected in the table below and is based on common policy. Figures shown exclude appropriations for the Colorado Geological Survey, which are included in the line item for that program.

DEPARTMENT ADMINISTRATIVE OFFICE, S.B. 06-235 SUPPLEMENTAL AMORTIZATION EQUALIZATION DISBURSEMENT TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $701,277 $48,848 $445,971 $115,027 $91,431 0.0

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DEPARTMENT ADMINISTRATIVE OFFICE, S.B. 06-235 SUPPLEMENTAL AMORTIZATION EQUALIZATION DISBURSEMENT TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE TOTAL $701,277 $48,848 $445,971 $115,027 $91,431 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $701,277 $48,848 $445,971 $115,027 $91,431 0.0 Centrally appropriated line items (613) 15,440 (4,787) 19,113 (30,379) 0.0 TOTAL $700,664 $64,288 $441,184 $134,140 $61,052 0.0

INCREASE/(DECREASE) ($613) $15,440 ($4,787) $19,113 ($30,379) 0.0 Percentage Change (0.1%) 31.6% (1.1%) 16.6% (33.2%) 0.0%

FY 2021-22 EXECUTIVE REQUEST $694,492 $63,419 $431,179 $133,551 $66,343 0.0 Request Above/(Below) Recommendation ($6,172) ($869) ($10,005) ($589) $5,291 0.0

PERA DIRECT DISTRIBUTION

This line item funds a direct distribution to the Public Employees Retirement Association.

STATUTORY AUTHORITY: Section 24-51-414 (2), C.R.S.

REQUEST: Consistent with OSPB direction, the Department included a request for a direct distribution to the Public Employees Retirement Association (PERA).

RECOMMENDATION: The staff recommendation reflects Committee common policy.

DEPARTMENT ADMINISTRATIVE OFFICE, PERA DIRECT DISTRIBUTION TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $0 $0 $0 $0 $0 0.0 TOTAL $0 $0 $0 $0 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $0 $0 $0 $0 $0 0.0 Annualize prior year legislation 478,087 25,566 233,519 152,559 66,443 0.0 TOTAL $478,087 $25,566 $233,519 $152,559 $66,443 0.0

INCREASE/(DECREASE) $478,087 $25,566 $233,519 $152,559 $66,443 0.0 Percentage Change 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $478,087 $25,566 $233,519 $152,559 $66,443 0.0 Request Above/(Below) Recommendation $0 $0 $0 $0 $0 0.0

SALARY SURVEY

This line item pays for department staff salary increases related to the annual compensation survey. This survey compares state employee compensation to the market for comparable jobs.

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STATUTORY AUTHORITY: Section 24-50-104, C.R.S.

REQUEST: The Department requested $314,877, applying an OSPB common policy adjustment of 2.05 percent pursuant to NP BA2.

RECOMMENDATION: The staff recommendation is shown in the table below and reflects Committee common policy for a 2.5 percent increase.

DEPARTMENT ADMINISTRATIVE OFFICE, SALARY SURVEY TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $0 $0 $0 $0 $0 0.0 TOTAL $0 $0 $0 $0 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $0 $0 $0 $0 $0 0.0 Centrally appropriated line items 383,998 35,233 241,791 73,515 33,459 0.0 TOTAL $383,998 $35,233 $241,791 $73,515 $33,459 0.0

INCREASE/(DECREASE) $383,998 $35,233 $241,791 $73,515 $33,459 0.0 Percentage Change 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $314,877 $28,890 $198,269 $60,283 $27,435 0.0 Request Above/(Below) Recommendation ($69,121) ($6,343) ($43,522) ($13,232) ($6,024) 0.0

MERIT PAY

This line item is a centrally appropriated line item used to pay for performance-based pay awards for state employees.

STATUTORY AUTHORITY: Pursuant to Section 24-50-104 (1) (c), C.R.S.

REQUEST: The Department does not request an appropriation for this line item.

RECOMMENDATION: Consistent with common policy, staff does not recommend an appropriation for this line item.

WORKER'S COM PENSATION

This line item pays the Department’s share of the workers’ compensation program for state employees. This program is administered by the Department of Personnel.

STATUTORY AUTHORITY: Section 24-30-1510.7, C.R.S.

REQUEST: The Department requests $58,315 total funds for this line item consistent with OSPB common policy.

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RECOMMENDATION: The recommendation is to follow the JBC's common policy, as reflected in the table below.

DEPARTMENT ADMINISTRATIVE OFFICE, WORKERS' COMPENSATION TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $59,290 $0 $37,588 $21,702 $0 0.0 TOTAL $59,290 $0 $37,588 $21,702 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $59,290 $0 $37,588 $21,702 $0 0.0 Centrally appropriated line items (3,406) 0 (1,471) (1,935) 0 0.0 TOTAL $55,884 $0 $36,117 $19,767 $0 0.0

INCREASE/(DECREASE) ($3,406) $0 ($1,471) ($1,935) $0 0.0 Percentage Change (5.7%) 0.0% (3.9%) (8.9%) 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $58,315 $0 $37,688 $20,627 $0 0.0 Request Above/(Below) Recommendation $2,431 $0 $1,571 $860 $0 0.0

LEGAL SERVICES

This line item provides funding for the Department’s purchase of legal services from the Department of Law.

STATUTORY AUTHORITY: Sections 24-31-101 (1) (a), C.R.S., and 24-75-112 (1) (i), C.R.S.

REQUEST: The Department requests $150,363 total funds for this line item pursuant to OSPB's budget instructions. This includes a common policy adjustment based on the Department’s share of actual statewide legal services usage for the last three years.

RECOMMENDATION: This item is pending a Committee common policy decision. The table below summarizes the request.

DEPARTMENT ADMINISTRATIVE OFFICE, LEGAL SERVICES (REQUEST) TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $131,281 $0 $81,373 $49,908 $0 0.0 TOTAL $131,281 $0 $81,373 $49,908 $0 0.0

FY 2021-22 REQUESTED APPROPRIATION FY 2020-21 Appropriation $131,281 $0 $81,373 $49,908 $0 0.0 Centrally appropriated line items 19,082 0 19,082 0 0 0.0 TOTAL $150,363 $0 $100,455 $49,908 $0 0.0

INCREASE/(DECREASE) $19,082 $0 $19,082 $0 $0 0.0 Percentage Change 14.5% 0.0% 23.5% 0.0% 0.0% 0.0%

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ADMINISTRATIVE LAW JUDGE SERVICES

This line item provides funding the Department to purchase Administrative Law Judge services from the Department of Personnel. In this Department, the only entity using ALJ services is the Division of Private Occupational Schools.

STATUTORY AUTHORITY: Sections 24-30-1001 (3) and 24-30-1002, C.R.S.

REQUEST: The Department does not request funding for this line item for FY 2021-22, consistent with OSPB common policy.

RECOMMENDATION: The recommendation reflects Committee common policy, which, consistent with the request, does not include funding for this line item in the Department for FY 2021-22.

PAYMENT TO RISK MANAGEMENT AND PROPERTY FUNDS

This line item provides funding for the Department’s share of the statewide costs for the liability and property programs operated by the Department of Personnel and Administration. The state’s liability program is used to pay liability claims and expenses brought against the State. The property program provides insurance coverage for state buildings and their contents.

STATUTORY AUTHORITY: Section 24-30-1510 and 24-30-1510.5, C.R.S.

REQUEST: The Department requests an appropriation of $247,090 total funds for this line item.

RECOMMENDATION: The staff recommendation is included in the table below and reflects the Committee common policy decision for this program.

DEPARTMENT ADMINISTRATIVE OFFICE, PAYMENT TO RISK MANAGEMENT AND PROPERTY FUNDS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $162,244 $0 $154,315 $7,929 $0 0.0 TOTAL $162,244 $0 $154,315 $7,929 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $162,244 $0 $154,315 $7,929 $0 0.0 Centrally appropriated line items 116,691 0 104,920 11,771 0 0.0 TOTAL $278,935 $0 $259,235 $19,700 $0 0.0

INCREASE/(DECREASE) $116,691 $0 $104,920 $11,771 $0 0.0 Percentage Change 71.9% 0.0% 68.0% 148.5% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $247,090 $0 $227,556 $19,534 $0 0.0 Request Above/(Below) Recommendation ($31,845) $0 ($31,679) ($166) $0 0.0

LEASED SPACE This line item pays for leased space for the Department's administrative office. It moved to 18,182 square feet at 1600 Broadway, Suite 2200 in May 2018.

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REQUEST: The Department requests a continuation appropriation of $424,927 for this line item, including $112,960 cash funds and $311,967 reappropriated funds.

RECOMMENDATION: Staff recommends the continuation amount requested. The table below shows both the on-budget and off-budget portions of the DHE Leased Space payments in actual year FY 2019-20 and estimate year FY 2020-21. Although total lease payments increased by $4,200 (0.9 percent) in FY 2020-21, the adjustment was absorbed by off-budget programs, and staff assumes that this will also be true of any incremental increase in FY 2021-22. Staff anticipates that a modest inflationary adjustment will ultimately be required in this line item.

DHE LEASED SPACE CALCULATION FY 2019-20 FY 2020-21 FY 20-21 Total Lease $518,187 $ 518,187 Less property tax deduction (84,183) (84,183) Additional costs year 2 16,800 21,000 Total lease $450,804 $455,004

On -budget DHE $311,967 $311,967 DPOS 112,960 112,960 Total appropriated in LB $424,927 424,927

Off-budget balance remaining COSI $8,626 10,462 OPPE 1,232 1,308 Foster 1,232 1,308 CoHelps 4,929 6,539 GEARUp 6,161 9,154 OER 1,232 1,308 SB 19-190 1,232 0 SB 19-231 1,232 0 $25,877 $30,077

PAYMENTS TO OIT

This line item supports information technology services provided by the Governor’s Office of Information Technology.

STATUTORY AUTHORITY: Section 24-37.5-104, C.R.S.

REQUEST: The Department has requested $226,430 total funds for this line item, including the Department’s share of request items in OIT.

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RECOMMENDATION: This item is pending a Committee common policy decision. The table below summarizes the request.

DEPARTMENT ADMINISTRATIVE OFFICE, PAYMENTS TO OIT (REQUEST) TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $588,706 $147,954 $382,124 $58,628 $0 0.0 TOTAL $588,706 $147,954 $382,124 $58,628 $0 0.0

FY 2021-22 REQUESTED APPROPRIATION FY 2020-21 Appropriation $588,706 $147,954 $382,124 $58,628 $0 0.0 Centrally appropriated line items (323,125) 0 (323,125) 0 0 0.0 NP3 OIT budget request package (39,151) 0 (39,151) 0 0 0.0 TOTAL $226,430 $147,954 $19,848 $58,628 $0 0.0

INCREASE/(DECREASE) ($362,276) $0 ($362,276) $0 $0 0.0 Percentage Change (61.5%) 0.0% (94.8%) 0.0% 0.0% 0.0%

CORE OPERATIONS

This line item supports the new state accounting and budgeting system. Appropriations in department operating budgets are reappropriated to the Department of Personnel.

STATUTORY AUTHORITY: Section 24-30-209, C.R.S.

REQUEST: The Department requests $270,871 total funds for this line item, including a common policy adjustment.

RECOMMENDATION: The recommendation is to follow the JBC's common policy as reflected in the table below.

DEPARTMENT ADMINISTRATIVE OFFICE, CORE OPERATIONS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $274,875 $0 $106,792 $168,083 $0 0.0 TOTAL $274,875 $0 $106,792 $168,083 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $274,875 $0 $106,792 $168,083 $0 0.0 Centrally appropriated line items (37,662) 0 (14,632) (23,030) 0 0.0 TOTAL $237,213 $0 $92,160 $145,053 $0 0.0

INCREASE/(DECREASE) ($37,662) $0 ($14,632) ($23,030) $0 0.0 Percentage Change (13.7%) 0.0% (13.7%) (13.7%) 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $270,871 $0 $106,792 $164,079 $0 0.0 Request Above/(Below) Recommendation $33,658 $0 $14,632 $19,026 $0 0.0

STATEWIDE TRAINING [NEW LINE ITEM REQUESTED]

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This line item provides funding for payments to the Center for Organizational Effectiveness, which provides professional development and training services for state employees.

STATUTORY AUTHORITY: Section 24-50-122, C.R.S.

REQUEST: The Department requests $3,604 reappropriated funds for Statewide Training. The request includes the creation of a new line item to accommodate a new common policy.

RECOMMENDATION: Consistent with Committee common policy, staff has not included an appropriation for this line item.

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(2) COLORADO COMMISSION ON HIGHER EDUCATION AND HIGHER EDUCATION SPECIAL PURPOSE PROGRAMS

The Colorado Commission on Higher Education serves as a central policy and coordinating board for public higher education in Colorado. This division includes funding for the Commission's staff, the Division of Private Occupational Schools, and special purpose initiatives of the Department. The table below summarizes recommended Long Bill changes for the Division.

COLORADO COMMISSION ON HIGHER EDUCATION AND HIGHER EDUCATION SPECIAL PURPOSE PROGRAMS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL

FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 Appropriation FY 2020-21 Appropriation $134,832,661 $28,043,514 $73,520,135 $27,856,260 $5,412,752 87.7 TOTAL $134,832,661 $28,043,514 $73,520,135 $27,856,260 $5,412,752 87.7

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $134,832,661 $28,043,514 $73,520,135 $27,856,260 $5,412,752 87.7 R4 Wind down professional student exchange program 0 0 0 0 0 0.0 R6 Realign funding for Colorado Student Leader Institute 0 0 0 0 0 0.0 R7 Continue Open Educational Resources program 0 0 0 0 0 0.0 R8 RISE Fund for higher education 0 0 0 0 0 0.0 R9 Restore Educator Loan Forgiveness program 0 0 0 0 0 0.0 NP2 Extend pause annual depreciation lease payment 0 0 0 0 0 0.0 Annualize prior year budget actions 756,496 856,496 (100,000) 0 0 0.0 Wildfire mitigation 0 0 0 0 0.0 Annualize prior year legislation 3,727,985 3,728,260 24 (224) (75) (1.0) Lease purchase payment adjustments 141,257 542,263 (540,000) 138,994 0 0.0 Other 75 0 (7,128) 7,128 75 0.0 WICHE du es (1,000) 0 0 (1,000) 0 0.0 Indirect cost adjustments 89,118 0 (2,396) 102,403 (10,889) 0.0 Colorado Geological Survey (479,082) 54,878 (175,099) (51,958) (306,903) 0.0 Restore Teacher Mentor Grants 548,477 548,477 0 0 0 0.5 Institute for Cannabis Research 800,000 0 800,000 0 0 0.0 TOTAL $140,415,987 $33,773,888 $73,495,536 $28,051,603 $5,094,960 87.2

INCREASE/(DECREASE) $5,583,326 $5,730,374 ($24,599) $195,343 ($317,792) (0.5) Percentage Change 4.1% 20.4% (0.0%) 0.7% (5.9%) (0.6%)

FY 2021-22 EXECUTIVE REQUEST $146,667,144 $39,865,519 $73,419,442 $27,969,323 $5,412,860 87.2 Request Above/(Below) Recommendation $6,251,157 $6,091,631 ($76,094) ($82,280) $317,900 0.0

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BACKGROUND ON DEPARTMENT STRUCTURE

Much of the Department’s activities are off-budget. A detailed organizational chart is on the following page, but the major components are summarized below. Most programs that are under the Department’s Executive Director also operate under the oversight of the Colorado Commission on Higher Education, but this is not uniformly the case.

Appropriated programs are described under the relevant line items in this division. A brief description of major non-appropriated programs is included here, followed by a spreadsheet summarizing existing programs and projections.

College Invest (cash funds): This agency manages the Colorado college savings plans authorized under section 529 of the Internal Revenue Code. Savings deposited in these 529 accounts are exempt from Colorado income tax, and interest earnings and capital gains on the accounts are exempt from both state and federal tax if used for qualified purposes.

College Assist (federal funds): College Assist served as the guarantee agency for student loans issued before the federal government took over this role. The agency no longer provides student loan origination and disbursement assistance but is now focused solely on default prevention for previously-issued loans. Because the federal government now issues student loans directly, the State

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still receives revenue related to historic loans but not new ones. Staff anticipates that the program will gradually phase-out, but this appears to be slow process.

Private and Other Federal Grants: The Department typically receives at least $1.0 million total funds in grants each year from various private sources, as detailed in the table below. This currently includes funding from the Department of Labor and Employment related to the My Colorado Journey online platform and the new federal Colorado HELPS (health care apprenticeship) grant program. CDHE Non-Appropriated Expenditures and Budgets FY 2018 to FY 2022 FY 17-18 Actual FY 18-19 Actual FY 19-20 Actual Anticipated Name Expenditures Expenditures Expenditures FY 20-21 Budget FY 21-22 Budget Federal Funds

College Access Challenge Grant No Child Left Behind/Teacher Quality Grants College Assist Total 1 Operating Expenses & FISMA $ 1,891,789 $ 2,504,595 $ 2,057,005 $ 2,835,557 $ 3,500,000 College Access Initiatives $ - $ - $ 927,612 $ 1,937,400 $ 2,000,000 Servicing fees and rehabilition discount $ 30,836,121 $ 21,583,007 $ 18,409,949 $ 30,000,000 $ 20,000,000 Claims $ 213,458,681 $ 218,032,105 $ 180,159,019 $ 289,490,740 $ 215,000,000 Colorado Opportunity Fund Administration $ 358,890 $ 291,483 $ 290,969 $ 291,483 $ 300,000 College in Colorado $ 1,075,745 $ 1,337,000 $ -

Subtotal: Federal Funds $ 247,621,226 $ 243,748,190 $ 201,844,554 $ 324,555,180 $ 240,800,000

Private Funds

Own Your Future (CDC) (GC024COYF) $ 97,271 $ - $ - $ - $ - 2 Study Colorado - (GC013SCO0) $ 27,101 $ 41,478 $ 30,172 $ 80,129 $ 80,129 3 TIE Grant (Lumina) (GC0250TIE) $ 242,441 $ 91,244 $ - $ - $ - 4 Kresge Foundation (FAFSA) (GCGA2KRES) $ 140,143 $ 268,896 $ - $ - $ - 2 Colorado Workforce Development Council-Shared position (GF025SCGC-GC025SCGC) $ 46,672 $ 47,330 $ 50,000 $ 50,000 $ 50,000 3 Interagency Agreement between CDLE(CWCD) and CDHE (GC025CWDC) $ 101,942 $ 96,158 $ - $ - $ - 2 Interagency Agreement between CDE and CDHE (GC033TEAC) $ - $ - $ 245,000 $ 200,000 $ 200,000 2 Colorado Challenge (GF023CCHA) $ 1,086,242 $ 260,488 $ 50,000 $ - $ - 4 Foster (GC026FOST) $ 56,215 $ 58,485 $ 93,703 $ 136,793 $ 136,793 3 IES CE - Research Partership Grant - Federal (GF002IES0) $ 178,842 $ 106,032 $ 129,810 $ - $ - 4 GearUp 3 (GFAMOGUA0) $ 4,665,096 $ 1,555,912 $ 288,866 $ - $ - 4 GearUp 4 (GFAMOGUA4) $ 846,161 $ 1,995,467 $ 4,658,372 $ 5,162,905 3 CO HELPS (GFAMOHELP) $ 647,661 $ 11,352,339 $ 10,704,679 3 My Colorado Jounrney (GC031MCJ0) $ 2,054,381 $ 1,243,619 $ - 3 Lumina Fund for Policy Acceleration (GC018LUMI) $ - $ 25,000 $ - 3 Strong Start to Finish Strategy Site (GC034SSTF) $ - $ 299,700 $ - 3 SBIR Phase II funding from BrightHive (GC037SBIR) $ - $ 72,857 $ 97,143 3 Concurrent Enrollment research-CU-CDHE agreement (GC025SCGC) $ - $ 10,950 $ - 3 Strada Education Network, Inc. (GC222SEN0) $ - $ 250,000 $ - 3

Subtotal: Private Funds

Cash Funds

College Invest Total Operating Expenses $ 6,143,761 $ 5,989,348 $ 5,629,158 $ 6,550,000 $ 6,550,000 Scholarships & Matching Grant $ 816,662 $ 1,164,789 $ 1,667 $ - $ - Benefits Paid to Participants and Withdrawals $ 738,578,907 $ 843,258,000 $ 881,303,260 $ 915,000,000 $ 915,000,000 Servicing Fees $ 27,801,365 $ 25,660,019 $ 25,112,669 $ 38,500,000 $ 40,000,000 Subtotal College Invest $ 773,340,695 $ 876,072,156 $ 912,046,754 $ 960,050,000 $ 961,550,000

Subtotal: Cash Funds $ 773,340,695 $ 876,072,156 $ 912,046,754 $ 960,050,000 $ 961,550,000

<1> Due to the Federal CARES ACT, budgeting for these FFELP program expenses are unpredicable at this time. <2> Funding ended FY19. <3> Anticipated FY20-21 Budget depends on the FY20 carry forward balance. <4>Funding will be ending in FY20

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DECISION ITEMS - COLORADO COMMISSION ON HIGHER EDUCATION AND HIGHER EDUCATION SPECIAL PURPOSE PROGRAMS

 R4 WIND DOWN PROFESSIONAL STUDENT EXCHANGE PROGRAM

REQUEST: The Department requests a reduction of $126,025 reappropriated funds in FY 2021-22 for the Professional Student Exchange Program (PSEP), which would result in no new students receiving support from the program in the 2021-22 academic year. This request also includes further reductions of $171,775 and $78,800 in FY 2022-23 and FY 2023-24, respectively, resulting in the program being completely phased out. Out-year savings result from the elimination of program slots as current participants graduate, ensuring that no students already receiving PSEP support are affected by the reduction in funding.

RECOMMENDATION: Staff does not recommend the request at this time, given that budget constraints have declined. However, (1) staff is not recommending restoring last year’s reductions; and (2) staff believes it may be worth exploring changes that would ensure that students who participate in the program not only return to Colorado but return to work in areas of Colorado or with particular communities that are underserved by optometrists.

ANALYSIS: Background: This program funds Colorado students to enroll in out-of-state institutions with optometry programs, including private institutions, at subsidized rates through an exchange set up by WICHE. In FY 2020-21, 20 students will receive support. The exchange offers an alternative to establishing such a program in Colorado, as there is currently no optometry school in the State. In return for discounted tuition, participating students agree to return to Colorado to practice optometry for the same number of years as they were supported, or to repay the state for its investment inflated by the federal PLUS student loan rate. Of the 28 students currently in some form of repayment, just three students are in cash repayment, meaning they are not practicing optometry in the state.

The program typically serves about 25 students at any given time. The FY 2020-21 state support fee (paid by all states per student) was $18,830 per year, or about half of typical optometry school tuition. Since FY 2004-05, from 2 to 12 new students have been added to the program each year. Students are funded for their entire time in the multi-year program, so there are only a few students added each year, while others graduate (an O.D. program is typically 4 years).

In FY 2012-13, the Department proposed phasing out the program, but this was not approved, and in FY 2017-18, the General Assembly approved an increase of $51,625 to address multiple years of inflation. In FY 2019-20, as part of budget balancing, the Committee approved a reduction of $74,025 based on not bringing new students into the program (the program was reduced by 4 slots from 24 to 20). The staff recommendation at the time was for a further reduction in FY 2021-22. Seven slots will open in FY 2021-22 creating an opportunity for a more significant reduction of $126,025.

Other States: According to WICHE, 126 students participated in the PSEP optometry program. Participating states currently include: Alaska, Arizona, Colorado, Montana, New Mexico North Dakota, Utah, and Wyoming; nonparticipating states include California (which has a public optometry school), Idaho, Nevada, Oregon, South Dakota, and Washington.

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Department rationale: The Department has now proposed fully phasing out the program on the following basis: • There is no evidence that the program is necessary for ensuring a sufficient supply of optometrists in Colorado. The labor market analysis firm EMSI projects 51 new optometrist jobs annually over the next decade (new and “replacement” when someone retires). This program, with 4-19 graduates each year helps fill some demand but may not meaningfully change where students work after graduation. A 2014 joint study by the American Optometric Association and the Association of Schools and Colleges of Optometry found that “there appears to be an adequate supply of eye doctors, optometrists and ophthalmologists, inclusive of projections of new doctors, to meet current and projected demand for eye care services through 2025”.3 • Most PSEP applicants plan on enrolling in optometry school regardless of whether or not they are funded. The Department regularly receives “recertification” applications from students who were not accepted into the program for their first year but still went to optometry school. • It is not clear that participation in the program is a determining factor in returning to Colorado to practice, as some students who apply for the program but are ultimately not funded still elect to practice in Colorado upon graduation.

Response from the Colorado Optometric Association: The Optometric Association has responded to the Department request, highlighting the following: • Due to Colorado’s aging population and anticipated retirements in the Optometry field, Colorado should not interfere with an effective optometry pipeline. Colorado’s requirement that students return after receiving the PSEP works. • Optometrists in Colorado who used the program have reported that the financial assistance was very important to them, reducing their debt and thus in some cases enabling them to pursue their degrees and then work in areas where compensation might not be as high. • Colorado invests heavily in its medical, dental, pharmacy, and veterinary schools, subsidizing students in those programs, and should not treat optometry students differently.

JBC Staff Observations: • There have been a variety of conflicting projections about whether or not there is an impending shortage of eye care professionals or a glut. As noted in a publication from the National Academies of Sciences, Engineering, and Medicine, “A number of challenges make it difficult to assess whether current workforce levels, distribution patterns, and projected trends will be sufficient to meet the growing demand for eye and vision care services as the U.S. population ages. Workforce projection studies produced by different advocacy groups vary substantially….modeling projections make assumptions about the changing demographics of patient populations, the professional workforce, public health demand versus market demand, and

3 https://store.aoa.org/Product/viewproduct/?ProductId=2057922 Critiques of the study indicated that it blended a glut of optometrists with a shortage of ophthalmologist to conclude supply was adequate. https://abcmo.org/optometry-surplus-review/. More recent studies also indicate that the density of ophthalmologists has decreased, while the density of optometrists has increased. https://pubmed.ncbi.nlm.nih.gov/32445703/

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the impact of new technologies and treatments on clinical practice, which can have substantial effects on projections.” 4

• There is likely a shortage in particular regions. A heat map of eye care professionals in US counties referenced in the same National Academies study and provided below suggests that in Colorado, as in other states, urban areas are adequately supplied with optometrists, while less populated areas face greater challenges.5 A 2011 study found that 24 percent of US counties had no ophthalmologists or optometrists at all.6

From National Academies of Sciences, Engineering, and Medicine; Health and Medicine Division; Board on Population Health and Public Health Practice; Committee on Public Health Approaches to Reduce Vision Impairment and Promote Eye Health, 2016 https://www.ncbi.nlm.nih.gov/books/NBK402365/

A more recent study by the Optometry Association also shows that many rural Colorado counties have no local optometrists.

• As noted by the Optometry Association, Colorado provides significant subsidies for the medical and veterinary schools.

4 National Academies of Sciences, Engineering, and Medicine; Health and Medicine Division; Board on Population Health and Public Health Practice; Committee on Public Health Approaches to Reduce Vision Impairment and Promote Eye Health; Welp A, Woodbury RB, McCoy MA, et al., editors. Washington (DC): National Academies Press (US); 2016 Sep 15. https://www.ncbi.nlm.nih.gov/books/NBK402365/

5 Ibid., citing Gibson DM, 2015. 6 https://pubmed.ncbi.nlm.nih.gov/25602911/

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o Resident students attending CU medical school pay $39,364 in tuition, compared with $65,319 for nonresidents, with similar discounts for other professions. o At Anschutz, the State is contributing $17,691 per student across medical professions or $23,495 per resident student, based on annual budget data book submissions indicating that $80,470,049 of state support for the CU system went to the medical campus, which served 4,288 student FTE including 3,425 resident students (primarily graduate students). [The State’s contribution per capita for the veterinary school is actually considerably larger ($28,593 per student/$49,414 per resident student)]

• While outside the scope of the current Committee decision, staff notes the existing system perhaps should base tuition discounts for medical or veterinary training-- or enhanced discounts--on willingness to serve the State, and particularly underserved areas, after graduation. In fields such as medicine, graduating students are highly mobile and may not, in fact, ultimately work in their home state.

• While staff understands the Optometry Association’s interest in “equal treatment” for students studying optometry, state benefits from within-state medical and veterinary schools offer benefits that extend far beyond student tuition discounts. The medical veterinary schools in Colorado generate extensive research dollars and other regional economic and service benefit. Once auxiliary revenues are included (primarily faculty fees for medical services), the AMC budget is $2.2 billion, and doubtless offers economic multipliers well beyond that. As importantly, the presence of the medical and veterinary schools enhance the quality of medical care available to Coloradans beyond the training offered to individual students.

• Within the scope of the State budget, this is a relatively small program, and, with a rosier revenue situation, staff does not think it is problematic to retain the program as-is. However, staff believes it is worth exploring further whether this program could be modified to provide greater benefits to the State by requiring those who return from the program to work in underserved areas or with underserved communities. WICHE indicates that modifications of this type would be feasible under the WICHE program. The Optometry Association has expressed willingness to explore this option, though it would clearly prefer to leave the program as-is. For example, optometrists who joined staff on a call noted that, even with the buy-down offered by WICHE, students face barriers to entering a rural market, particularly if a practice is not presently for sale. Further, many new eye doctors will benefit from practicing initially with more senior practitioners rather than setting up alone in a rural area as their first working experience.

 R6 REALIGN FUNDING FOR COLORADO STUDENT LEADER’S INSTITUTE [LEGISLATION REQUIRED]

REQUEST: The Department requests a reduction of $218,825 General Fund and 1.0 FTE for the Colorado Student Leaders Institute (COSLI) in FY 2021-22 and ongoing. This reduction would eliminate state funding for the program. The Department requests that the JBC sponsor legislation to clarify in statute that the program is subject to available appropriations

RECOMMENDATION: Staff does not recommend the request to sponsor legislation or eliminate funding for the program.

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ANALYSIS: Background: COSLI was originally established as a pilot program by S.B. 15-290 and was reauthorized through 2024 by S.B. 19-137, which also established an ongoing annual appropriation for the Department of $218,825 General Fund and 1 FTE. COSLI is a residential summer education program for up to 100 Colorado students in tenth and eleventh grade. COSLI operates four weeks each summer on the University of Colorado Denver campus, where students participate in college-level courses, lectures, seminars, and enrichment activities. Students who complete the program receive three hours of college credit. Students must be nominated by their school district or charter school to participate and be selected to participate by the COSLI Board of Directors via a competitive application process. Operation of the program is contingent on COSLI receiving at least $40,000 annually in gifts, grants, and donations and students who are accepted are encourage to donate up to $400 each to assist in covering COSLI’s operating expenses.

Department Rationale for Proposal: Actual participation in COSLI has typically ranged from 60-75 students per year. Statute requires that at least 50% of participating students each year must be eligible for free or reduced lunch and/or be first-generation college students. From 2017 to 2019, the percentage of participants who were prospective first-generation college students has fluctuated slightly around 50%, while the percentage of participants who were both first-generation and eligible for free or reduced lunch ranged between 40-50%. COSLI is required by statute to report on the college matriculation and success of its participants, and current data shows that most participants are progressing through college and are being continuously matriculated.

Staff Rationale: The Department’s position is, in essence, that this program should be eliminated to ensure cuts are not required to programs that provide greater benefit. The program requires a modest state investment. Given the State’s improved revenue situation, staff does not believe this is a choice the State must make at this time.

 R7 CONTINUE OPEN EDUCATIONAL RESOURCES [LEGISLATION REQUIRED]

REQUEST: The Department requests $100,838 reappropriated funds and 1.0 FTE in FY 2021-22 and ongoing for the continuation of the Open Educational Resources (OER) program. This request would allow the Department to maintain a state-level Director of OER and OER Council in order to support the further development of free digital textbooks and course materials at Colorado’s public institutions of higher education. The requested funds are from savings generated by the Department’s R-04 request, which requests a reduction in reappropriated funds for the Professional Student Exchange Program. The funds are from indirect cost recoveries the Department collects from other state agencies and public institutions of higher education.

The OER Program is set to repeal on November 1, 2021. The Department requests that the JBC sponsor legislation to reauthorize the program for an additional five years.

RECOMMENDATION: • Staff recommends that the Committee sponsor legislation to continue the OER program for an additional five years, as requested. • Staff requests Committee authorize staff to work with the OER Council, the Department and other interested parties on a bill draft that may also identify new policies to move

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OER forward. For example, staff would like to establish a multi-year goal of ensuring that all courses using OER are identified in institutional catalogs. Staff would also like to see additional focus on promoting the development and use of OER in concurrent enrollment classes. • Staff recommends that, instead of the $100,383 requested, this bill instead incorporate an appropriation of $1,108,200 General Fund and 1.0 FTE (preliminary estimate pending the bill draft and further discussion about a conference and other ancillary costs), establishing the base funding level for the subsequent four years. This would essentially restore the program to the level of funding available in FY 2019-20, prior to a $200,000 budget balancing reduction applied in FY 2020-21. • Because this program repeals in FY 2021-22, staff does not recommend including an appropriation in the Long Bill, as there will not be adequate statutory authority this year.

APPROPRIATION ESTIMATE FOR

NEW LEGISLATION Prorated FTE 1.0 FTE Personal Services (excluding $71,770 centrally-appropriated) Standard Operating $1,350 Capital Outlay Other Costs Travel $2,080 OER Coun cil Costs $3,000 Other operating - conference, training $30,000 OER Grants $1,000,000

Total Expenditures $1,108,200

ANALYSIS: Background: Open educational resources (OER) are high-quality teaching, learning, and research resources that reside in the public domain or have been released under an intellectual property license that permits their free use and repurposing by others. The Joint Budget Committee initiated Colorado’s efforts to promote the use of OER in higher education via S.B. 17-258, which created an Open Educational Resources Council to study the topic. The JBC subsequently sponsored House Bill 18-1331, which authorized the Colorado Open Educational Resources Council and grant program in the Department of Higher Education for a three year period. House Bill 18-1331 included the following provisions, most of which are in Article 4.5 of Title 23:

• OER Council: Established requirements for appointments to the Council by the Executive Director of DHE and the Commissioner of Education and established Council duties including recommending statewide policies for promoting adaptation, creation, and use of OER at Colorado public institutions of higher education; facilitating professional development and sharing of knowledge about OER; implementing the OER grant program that is created in the bill; and submitting an annual report to the Colorado Commission on Higher Education and the General Assembly on the use of OER and the impact of the grant program.

• OER Grant Program: The OER grant program provides grants to public institutions of higher education to promote the use of OER at the institutions and to faculty and staff, individually or in groups, to create and adapt open educational resources.

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• Informing Students about OER (23-1-134, C.R.S.): The bill also directs the Colorado Commission on Higher Education to adopt guidelines to require public institutions of higher education to ensure that, beginning in the fall of 2021, students are informed prior to course registration concerning which courses and sections use OER or other low-cost materials.

H.B. 18-1331 provided a General Fund appropriation of $660,000 and 0.9 FTE for FY 2018-19 that increased to $1,160,877 for FY 2019-20. While a similar amount was expected in FY 2020-21, the appropriation for grants was reduced by $200,000 in FY 2020-21 due to budget balancing, leaving a total appropriation of $961,176 General Fund. The Council and grant program are repealed effective November 1, 2021.

2019 and 2020 Annual Reports: The Department submitted the annual reports as required. These indicate the significant and success of the program, despite the impacts of the pandemic in late FY 2019-20. See: http://masterplan.highered.colorado.gov/wp-content/uploads/2020/10/FINAL_OER_Report_2020_9_29_20.pdf

As outlined in the most recent report: • Over the last half century, textbook costs have increased four times faster than the CPI, and State and national organizations estimated a cost of $900 to $1,800 for books and course materials in FY 2018-19. In the first year of the OER grant program, institutional grantees reported student savings of more than $3.9 million, which was more than six times the State’s initial investment in the initiative ($550,000 in year 1). This represents just one year of savings, but, once new materials are established for a course, these savings are likely to continue in subsequent years. In the first year, grantees addressed over 100 courses, reaching over 30,000 enrolled students.

• National trends and local data indicate OER supports student learning outcomes while lowering costs. Both national and local data indicate that the majority of students and faculty who have used both OER and traditional texts believe OER are of equal or higher quality, and several OER grantees, as well as national studies, have reported data demonstrating improvements or no negative impacts to student learning outcomes.

• The program is effectively building capacity and creating a statewide ecosystem for successful OER adoption. In Colorado, 96 percent of eligible institutions have received funding from the OER grant program, signaling both a great interest in this field and an effort to build statewide collaboration. Over 120 faculty, staff and advocates have been trained through Open Educational Ambassadors program, with over 1,250 registered to attend the June 2020 OER Virtual Summit.

The 2020 report recommends:

Build Structure. Continuing to build structures that support OER. This includes continuation of the OER Council and state staff and expansion of campus-level policies and initiatives that support OER. Efforts thus far include state-level training and campus steps to support staff positions to administer OER projects. Next steps will including further partnering with national entities to build sustainable long-term support for OER and encouraging further campus level changes such as inclusion of OER in tenure and promotion criteria.

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Build Culture. Faculty, staff and administrators are increasingly aware of OER. All grantees say the majority of their colleagues have at least heard of open textbooks, and over a quarter say colleagues are “aware” or “very aware” of open text books. However, there is an ongoing need for focused, intentional efforts to target campuses that have not yet engaged on the topic.

Build Evidence. The Department collected thus far is of the impact of the program on grantees: $3.9 million in savings for 30,000 enrolled students. Next steps include partnering locally and nationally to establish a more sophisticated and comprehensive data-collection framework and expanding survey data to assess the quality of experiences for students in classrooms around the State.

Staff Observations: • As outlined by the Department, OER efforts result in real dollar savings to students, with educational outcomes that are as good or better than conventional educational materials. Previous staff briefing documents (available if desired) include extensive citations on the national research in this area, and staff is pleased to begin to see some new Colorado-specific data: $3.9 million in student savings for $550,000 in the first year’s investment is an impressive return.

• Staff continues to hope that Colorado, and other states, will move toward a “tipping point” in which use of OER is one of the first options faculty consider when developing or resigning a course. While the State has made progress, it is clearly still far from this. Higher educational institutions are slow to change, which inevitably makes progress on OER slower than desirable. However, the flip side of this is that once faculty adopt OER in their course design, this is also likely to stick for many years into the future.

• Staff believes that merely maintaining a staff position, as requested by the Department, will have far less impact on expanding use of OER statewide than the active incentive provided by grant funding. Given the State’s improved revenue situation, staff believes OER is a worthwhile investment. The staff recommendation would restore OER grants to $1.0 million per year for five years. Staff also believes that if the State receives significant additional one-time federal funds, this is an area in which Colorado should consider putting some further one-time resources, since front-end investments in redesigning course materials have long-term student benefits.

• Staff looks forward to seeing the impact of the requirement that takes effect in 2021 and requires institutions to ensure students are notified about which courses use OER prior to registration. If the Committee sponsors new legislation, as recommended by staff, staff hopes to further strengthen this requirement so that, no later than five years from now, institutions’ course catalogs consistently identify courses using free or very low cost materials (defined in current Department policy as less than $20). While staff does not foresee making many changes to the program currently outlined in statute, if the Committee authorizes staff to draft legislation, the OER Council and other stakeholders may suggest additional changes for reauthorization.

 R8 RISE FUND FOR HIGHER EDUCATION [LEGISLATION REQUIRED]

REQUEST: The Department requests a one-time appropriation of $10,000,000 General Fund in FY 2021-22 to expand on the Response, Innovation, and Student Equity (RISE) Education Fund created by the Governor in the summer of 2020. The funds would be dedicated to providing grants, in partnership with the Department of Higher Education, to Colorado’s public institutions of higher

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education to support institution-led initiatives to reduce costs, improve operational efficiency, and adapt and lead in the post-pandemic “new-normal.” The Department requests that the JBC sponsor legislation establishing the RISE Higher Education Fund and authorizing the distribution of grants.

RECOMMENDATION: Staff does not recommend this request at this time.

ANALYSIS: Department rationale: The request explains the rationale as follows: “The COVID-19 pandemic continues to disrupt operations and reduce revenues to higher education institutions. Institutions are working to adapt to these challenging times, both to preserve their fiscal stability and to best serve their students. Institutions will need to continue to innovate their service delivery to provide value for students while right sizing their operating and capital programs. Further, institutions may have to re- evaluate key aspects of their operations like their academic program portfolios and educational- delivery methods. Grants from the RISE Fund would help support and expand these efforts by institutions to reduce costs, right size operations, and adapt and lead in the “new normal” that follows the COVID-19 pandemic.”

Staff considerations:

• Additional federal support received. The request proposes that the General Assembly provide state funds to allow the Governor’s Office to pursue more of the activities it has been pursuing with federal CARES Act funds. However, since this request was submitted, the Governor’s Office has received another “tranche” of federal funds that may be used for discretionary grants for education projects. In response to staff questions, the Governor’s Office provided the following data on the federal funds it has used for education grant funding.

Summary of RISE Round I competitive grant ● 76 eligible applicants total ● 19 applications were submitted from IHEs ● 13 applications funded, 3 were IHEs ● Total RISE Award $14,116,310 (Fully funded by GEER HR748) ● IHE Award Total $8,362,140 ● IHE Award Average $2,787,380

Summary of RISE Round II competitive grant ● 96 eligible applicants total ● 18 applications were submitted from IHEs ● 19 applications funded, 4 of them were IHEs ● Total RISE Award $26,618,564 ($17,578,364 funded from GEER, $9,040,200 funded by GEER II HR133) ● IHE Award Total $9,476,390 ● IHE Award Average $2,369,098

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As might be expected with a competitive grant, there are still many unfunded requests. The RISE program is supporting some interesting educational innovations, and many of those that have not been funded could potentially provide benefits to the State. Nonetheless, providing this funding does not seem to staff to be a core function of state government. In the event the State has access to additional one-time funding (e.g., from new federal funds), this might be an appealing place for some additional resources.

• If the General Assembly wishes to develop its own grant program, staff suggests that it may want to more clearly outline goals and objectives and consider carefully who would be on the body that selects grantees. Institutions have indicated that there are areas in which support would be welcome, including funding to help “repair the pipeline” and bring students into higher education whose late high school experience was disrupted. However, if the General Assembly is eager to address particular needs, it might want to clarify program goals and, based on this, determine the types of individuals who would be most appropriate for selecting projects. This might include representation from both CCHE and K-12 entities (something suggested by the Governor’s Office) if the focus is on the K-12/higher education interface, but the focus would need to be decided first. Substantive work on shaping this program--if the General Assembly wishes to pursue it--may be more appropriate for legislators on the Education Committees than the JBC.

Additional Background: The table below summarizes the four higher education projects selected for the second round of RISE funding from the Governor’s Office to provide a sense of the types of projects that might be funded if the request for legislation moves forward.

RISE EDUCATION FUND 2ND ROUND: IHES

AWARD AWARD LEAD APPLICANT NAME REQUESTED STATUS PROJECT DESCRIPTIONS

To create a robust program across all 14 San Luis Valley school districts, in partnership with the Boys and Girls Club of San Luis Valley to prepare San Luis Valley students to be a resilient and skilled workforce ready to meet rapidly changing industry demands that fuel the region’s economic Adams State University $2,581,747 Funded growth and vitality.

To provide high schools throughout western Colorado, and their local higher education partners, with the resources and technology necessary to rebuild, dramatically grow, and sustainably scale concurrent enrollment opportunities in rural communities. Investments will be made in technology, mobile labs, and a shared infrastructure between rural high schools and higher education partners that will dramatically increase equity and access to dual and concurrent enrollment for Colorado Mountain College 2,957,466 Funded the region’s 10,500 high school students.

To enable the institution to better meet the needs and demands of its community by expanding Spanish language programs, outreach, and adult basic education, career programs in nursing and solar energy, and helping to Northeastern Junior College 1,937,177 Funded remove barriers for non-traditional students.

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RISE EDUCATION FUND 2ND ROUND: IHES

AWARD AWARD LEAD APPLICANT NAME REQUESTED STATUS PROJECT DESCRIPTIONS

To develop an innovative approach to distance learning for low-income individuals living across primarily rural areas in Colorado. Pueblo Community College will lead a consortium of several Hispanic-Serving Institutions to enable course-sharing across institutions and to train Pueblo Community College 2,000,000 Funded instructors in online teaching practices.

TOTAL $9,476,390

The Governor’s Office also provided a list of the $22.6 million in higher education projects that had not been awarded a grant.

 R9 RESTORE EDUCATOR LOAN FORGIVENESS PROGRAM

REQUEST: The Department requests $2,898,963 General Fund and 0.5 FTE in FY 2021-22 to restore the Educator Loan Forgiveness Program established by S.B. 19-003. Funding for this program was de-funded in FY 2019-20 and ongoing in order to balance the FY 2020-21 budget. This request would provide sufficient funding to pre-pay the full cost of one cohort of 100 teachers receiving 5 years of $5,000 in loan forgiveness per year.

RECOMMENDATION: Staff does not recommend this request.

ANALYSIS:

Background: S.B. 19-003 Educator Loan Forgiveness Program (Zenzinger & Coram/McLachlan & Wilson) modified and extended an older program which had not been funded in many years. Under the new Educator Loan Forgiveness Program, eligible educators, including teachers, principals, and special service providers serving in a hard-to-staff position in a rural school district or content shortage area, is eligible to receive up to $5,000 in loan forgiveness for each year of employment in a qualified position, for up to five years. The Colorado Commission on Higher Education (CCHE) was required to approve up to 100 educators per year for participation in the program. If more than 100 applications were received, CCHE was required to prioritize applicants who have contracted for a qualified position in a rural school and in a content shortage area, followed by those who had contracted for a qualified position in a rural school, and finally those who had contracted for a qualified position in a content shortage area. The program repeals September 1, 2033.

In response to staff questions in February 2020, the Department reported that after passage of S.B. 19-003, it hired a program coordinator to administer the program, created an application process, guidelines, and program policy. The program closed for applications on February 21st having received hundreds of applications. However, due to unexpected budget shortfalls associated with the COVID-

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19 pandemic, loan forgiveness funding was eliminated in FY 2019-20, and funding for the associated staff position was eliminated in FY 2020-21.

Department Rationale: “One of the most commonly cited reasons for not pursuing a career in teaching continues to be cost: the price of an education degree compared with the return on investment from that degree is a deterrent for students who may otherwise enter the field. In rural districts the problem of teacher pay is especially acute, as over 95 percent of those districts’ salaries are below the cost of living. At the same time, national research evidence suggests the effectiveness of loan forgiveness in recruiting and retaining educators. By investing in loan assistance for educators, the state has the opportunity to support this critical, high demand career pathway, especially in critical geographic and subject matter areas in the state. The Department anticipates this support will aid in the recruitment and retention of educators in critical positions and provide significant financial support to individuals, allowing 100 educators to make substantial progress on the repayment of their student loans.”

Staff Considerations: • The Department has indicated that were over 1,300 eligible qualified applicants vying for 100 slots when the program launched and before funding was pulled back. As discussed during the staff budget briefing, staff is concerned about funding a program that provides a large benefit ($25,000) to 100 individuals--a small fraction of those who apply and an even tinier fraction of those who could qualify. In 2019, the Department used publicly available data from CDE to estimate that there were approximately 60,000 educators who could potentially qualify for the program. The number who could be funded would thus represent 0.17 percent of those eligible. Staff does not believe it is appropriate to distribute substantial public funds to a few individuals via lottery while the vast majority with equal qualifications and needs receive nothing.

• In response to Committee hearing questions and subsequent follow-ups, the Department provided the following response:

“The Department does not believe the need for lottery-based selection can be completely eliminated without the program receiving a material increase in funding. Based on publicly available data, there were approximately 55,600 teachers employed by districts and BOCES in FY 2019-20. Of those, approximately 7,200 teach in districts (or BOCES) with less than 300 teachers employed district-wide; this is a rough proxy for a “rural district”. Of those, approximately 4,200 teach in districts with less than 100 teachers employed district-wide; this is a rough proxy for “small rural district”. Neither of these definitions are exact matches to the qualifications for rural and small rural districts as currently defined by SB 19-003, but it demonstrates the scale of potentially eligible educators and the substantial level of resources that would be necessary to meet the potential demand and eliminate the need for lottery-based selection.

There is a provision in SB 19-003 that seeks to address the issue of scale and demand by specifying that first priority should be granted to educators teaching in small rural districts who are also teaching in content shortage areas. However, due to the nature of educator shortages, nearly every content area is experiencing shortages in rural and small rural districts. To eliminate the need for a lottery-based selection at the current

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funding level, the eligibility criteria would have to become so narrow that only a small fraction of educators in rural and small rural districts would qualify.

If some lottery-based component is acceptable, the Department proposes that SB 19- 003 be amended in the following ways to reduce the size of the potentially eligible population. These changes would greatly reduce the number of individuals who would be eligible to apply for the benefit but would not eliminate the need for potential lottery selection, depending on the number of qualified applications received. • Only educators in small rural, or small rural and rural districts, (as defined by CDE) be eligible to apply • Definition of “educator” be limited to only teachers; as another option to limit the pool of applicants, applicants could be limited to only Special Service Providers • This will also require conforming amendments to the definition of “qualified position” • Limit the size of the benefit to each participant to $10,000 over the course of 3 years (or a similar smaller amount for only one year or two years) rather than $25,000 over the course of five years as currently required by statute. This would increase the number of participants in the program, assuming no change in funding.

The Department could also attempt to work with CDE to identify the content areas with the largest shortages to further limit eligibility.

There was some discussion during the Department’s hearing of out-sourcing selection to districts. This would require significant changes to the program’s authorizing legislation and program administration…A change of this magnitude would likely impact the fiscal and workload impact assessed by the Department.”

• Staff is not convinced that the alternatives presented by the Department are particularly attractive. Given the scale of demand, a loan forgiveness program may be best left to the federal government which both issues the loans and has more capacity to fully fund everyone who qualifies.

• Furthermore, any of changes suggested by the Department would require significant modifications to the existing statute. In light of this, staff recommends rejecting this request. If legislators choose to rethink the program and pursue related statutory changes, staff anticipates that the costs associated with the re-envisioned program will be appropriated as part of that bill.

• Staff has recommended restoring funding to other programs intended to improve teacher recruitment and retention, including in rural areas. Even with additional funding, these programs will also be underfunded compared to the demand, and there may be some use of lotteries. However, these programs offer smaller one-year benefits, are easier to administer, and the gap between demand and funding is far smaller.

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 NP2 EXTEND PAUSE ANNUAL DEPRECIATION LEASE PAYMENT [LEGISLATION REQUIRED - COM MON POLICY DECISION]

REQUEST: The Department’s request includes NP2 to eliminate funding for the Annual Depreciation Lease Payment.

RECOMMENDATION: House Bill 20-1398 suspended the annual depreciation lease equivalent payment mechanism, defined in Section 24-30-1310 (1)(a), C.R.S., for FY 2020-21. Under current law, these payments will resume in FY 2021-22. Staff thus recommends appropriating $ 4,689,433 General Fund for this line item in the FY 2021-22 Long Bill. If the Committee chooses to approve the prioritized request submitted by the Department of Personnel to suspend these payments in FY 2021-22 (DPA R10), the Committee will need to sponsor a bill that modifies this statutory provision accordingly. The associated General Fund reductions would be accomplished through that bill. The Committee will consider this potential legislation on March 12, 2021, as part of the JBC Staff Figure Setting presentation for Capital Construction.

 STAFF INITIATED ANNUALIZATION TO RESTORE MARIJUANA TAX CASH FUND APPROPRIATION FOR THE INSTITUTE FOR CANNABIS RESEARCH AND ALLOW ROLL FORWARD FOR SOME RESEARCH FUNDS

REQUEST: The Department request included $1,000,000 from the Marijuana Tax Cash Fund (MTCF) for the Institute for Cannabis Research. This was a continuation of the FY 2020-21 funding level, which included a reduction of $800,000 from the MTCF for the Institute for budget balancing.

RECOMMENDATION: Staff recommends that the Committee increase funding for the Institute by $800,000 cash funds from the MTCF, restoring the appropriation to the FY 2019-20 level of $1,800,000 cash funds. Staff also recommends a footnote authorizing the Institute to roll forward up to $250,000 of the total appropriation to FY 2022-23, representing approximately one quarter of research funding, to address multi-year research as well as any lingering research spending delays associated with the pandemic.

ANALYSIS: Background: Senate Bill 16-191 authorized the General Assembly to appropriate money from the Marijuana Tax Cash Fund (MTCF) to the Board of Governors of the Colorado State University System (CSU) to fund scientific and social science research at CSU-Pueblo concerning marijuana and other matters that impact the state and its regions. The appropriation was initially provided at the $900,000 level and was increased to $1,800,000 MTCF in FY 2017-18. House Bill 19-1311 (Institute of Cannabis Research Role and Mission by Singer/Bridges made changes to the program. The changes include, among others, creating a new 9-member board to oversee the program, approve the budget, and oversee grant awards through an open process. One intent of this structural change was to make the Institute more independent of CSU-Pueblo and thereby clarify a statewide mission, even though the institute remains housed at CSU Pueblo.

The Institute hosts an annual conference (except in FY 2020-21) and a journal. It also funds research on a wide range of topics. Studies have explored issues such as the effects of medicinal cannabinoids on seizures in those with epilepsy, a study of use of industrial hemp fibers as reinforcing agents, and

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study for an enhanced method for extracting cannabinol from cannabis leaves and flowers using pressurized liquid extraction. The Institute also hosts conferences and a journal, the Journal of Cannabis Research, launched in partnership with Springer Nature.

During the 2020 legislative session, in response to budget constraints, the JBC reduced the budget for the Institute to $1,000,000 cash funds from the MTCF for FY 2020-21. Staff anticipated that this would eliminate much of the state funding for institute-sponsored research, while leaving the core institute structure and staffing in place.

In response to staff questions, the Institute provided the following graphics indicating how funds were used in FY 2019-20 (before the budget reduction) and FY 2020-21.

Key Considerations: • At the time the JBC took the reduction to the Institute for Cannabis Research, it did not identify this as a one-time reduction. However, the rationale for the reduction was purely the need to balance the budget, rather than any deficiency in program operations.

• Marijuana tax revenues have been far more robust than anticipated.

o As noted in the JBC Staff briefing on the Marijuana Tax Cash Fund (November 11, 2020): . “The May 2020 OSPB revenue forecast, which the General Assembly used for balancing purposes, anticipated little or no growth in overall marijuana tax revenues over the forecast period (from FY 2019-20 through FY 2021- 22). . However, it now appears that marijuana sales – and the associated tax revenues – are significantly more resilient than anticipated in the May 2020

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revenue forecasts…actual FY 2019-20 revenues were $37.4 million (12.4 percent) higher than anticipated in May. Furthermore, both of the September revenue forecasts (OSPB and LCS) anticipate continued growth in revenues throughout the forecast period (with LCS anticipating revenues well above the OSPB estimates for each year).”

o The December 2020 LCS revenue forecast reflects another large jump in projected revenue to the MTCF.

• General Fund revenue projections are also far better than they were during budget balancing for FY 2020-21, reducing the need to “look under the couch cushions” for funding. As demonstrated during FY 2020-21, MTCF can be a valuable source for bolstering the General Fund, and this must be considered when increasing MTCF expenditures.

• Legislators have expressed concern about the lack of research about the health effects (benefits and risks) of modern cannabis. Apart from a few hundred thousand spent in the Department of Public Health and Environment, the Institute is the only place where the General Assembly supports research on these impacts.

• Given marijuana tax revenues in the $400-$500 million range (depending upon the projection) a total of $1.8 million from this funding source for the institute and state-funded research on cannabis seems relatively modest. The Institute has noted that funding for research on cannabis is constrained by the federal prohibition on use and sale of cannabis. It also notes that private funding is heavily driven by the existing structure of financial incentives. Thus, pharmaceutical companies have thus far shown little public interest in funding research in this area as cannabis is already legally available and thus less likely to be profitable, and businesses that grow and sell marijuana for medicinal and recreational purposes are particularly interested in research and findings that bolster their bottom line.

• The institute has also noted that it routinely faces a technical problem with spending for research, because research projects often extend beyond a year or may be temporarily delayed by any number of intervening factors. The institute notes that the federal National Institutes of Health allows roll-forward of up to 25.0 percent of research grants with little additional inquiry, and that it would be helpful to have a similar policy for state funding for research from the institute. Staff is therefore recommending a footnote to allow roll-forward of approximately 25.0 percent of research funding ($250,000) into FY 2022-23. Staff has also encouraged the institute to seek a statutory change no later than the 2022 session that would allow this on an ongoing basis, to the extent this seems to be an ongoing issue for the program.

 CORRECTION TO ANNUALIZATION REQUEST FOR DIVISION OF PRIVATE OCCUPATIONAL SCHOOLS

REQUEST: The request did not properly annualize FY 2020-21 decision item R8 for the Division of Private Occupational schools. The FY 2020-21 request, approved by the JBC, provided $200,000 cash funds spending authority in FY 2020-21 for development of a new IT system. This was expected to annualize to $100,000 in FY 2021-22.

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RECOMMENDATION: The staff recommendation reduces the appropriation to the Division of Private Occupational Schools by $100,000 cash funds to annualize the Department’s FY 2020-21 R8 decision item. The Department has confirmed that there was an error in its request and that the IT project is on track so that annualization is appropriate.

 CORRECTION TO ANNUALIZATION REQUEST FOR PROSECUTION FELLOWSHIP PROGRAM

REQUEST: The request did not properly annualize the Committee’s FY 2020-21 action to suspend funding for the Prosecution Fellowship Program. Committee action was to suspend funding for one year. However, the FY 2021-22 request included no funding for the line item, instead of restoring it to the FY 2019-20 level.

RECOMMENDATION: The staff recommendation restores funding to $356,496 General Fund, consistent with Committee action and expressed intent during FY 2020-21 budget balancing.

ANALYSIS: Program Background: Senate Bill 14-174, amended by S.B. 15-043, created the Prosecution Fellowship Program at Section 23-19.3-102, C.R.S. Through state funding appropriated to the Department of Higher Education, the Colorado District Attorney's Council (CDAC) oversees and facilitate the placement of six recent graduates from the state's two major law schools, the University of Colorado at Boulder and the University of Denver, into one year prosecution fellowships in rural jurisdictions around the state. Fellows receive an intensive trial advocacy course from CDAC over the summer before placement in the community in September. The program operated until 2020 when activities were suspended. The two universities are required to contribute 20 percent of fellows’ salaries if they wish to participate.

Update from the Colorado District Attorneys Council: Staff consulted with CDAC, which indicated that it planned to operate the program during FY 2021-22 if the General Assembly restored funding as anticipated. The six fellows selected would start training in August 2021 and be placed with rural DA offices, as in the past.

In response to staff questions, CDAC noted as follows:

“CDAC believes the program has been a tremendous success and has achieved three laudable goals. First, providing a meaningful and real-world job experience for recent law school graduates in the field of prosecution. Second, providing much needed staffing assistance to the state’s underfunded and understaffed rural prosecutor’s offices. And finally, assisting both law schools in their efforts to place graduates of their outstanding juris doctorate programs. To date, the only criticism we have heard in relation to the program is the one-year duration. Originally, the bill sought to provide a two-year fellowship for each graduate, but it was deemed too expensive as the bill moved through the legislature.”

CDAC reports that to date 29 fellows have participated in the program. Of these, 16 have been retained in District Attorney offices and 2 absorbed in city attorney offices, while 4 are still considered

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fellows. Of the others, 3 did not pass the bar (but 1 of these was retained in an administrative position), 3 moved out of states, and the whereabouts of 4 others is unknown.

 CORRECTION TO ANNUALIZATION REQUEST AND STAFF-INITIATED ADJUSTMENT TO RURAL EDUCATOR RECRUITMENT, RETENTION, AND PROFESSIONAL DEVELOPMENT LINE ITEM

REQUEST: The Department’s formal request did not include any adjustment to the Rural Teacher Recruitment, Retention and Professional Development line item. However, in response to questions raised during the Department’s budget hearing and subsequent staff inquiries the Department reported the following:

“SB 16-104 stated that funding for the Center [for Rural Education] would be reexamined after a five year period ending with FY 2020-21. Due to budget constraints the $145,000 for the Center was not recommended for continued funding in the Governor’s budget request this year. However, the $145,000 was inadvertently left in the Rural Teacher Recruitment, Retention, and Professional Development line item in the budget request documents; because the amount was not intended to be included in the Governor’s budget request, the $145,000 should have been removed from the line.”

In addition, the request did not restore a reduction of $500,000 applied in FY 2020-21. The reduction was applied in light of roll-forward funding available from prior years for expenditure in FY 2020-21. The Committee’s intent with respect to whether the reduction would be continued or restored in FY 2021-22 and subsequent years was not clear at the time from the staff Budget Balancing document.

RECOMMENDATION: Staff does not recommend the request to eliminate funding for the Rural Education Coordinator contract, as this appears to be based purely on budget constraints, which are not as severe as originally anticipated. Further, staff recommends restoring the $500,000 General Fund reduced from this line item in FY 2020-21. If this amount is felt to be too large, staff would still recommend restoring a minimum of $100,000 General Fund, which would restore the program to the level of FY 2019-20 actual expenditures.

This program was cut in FY 2020-21 based on the availability of $500,000 rolled forward from prior years. Those funds will be expended by the end of FY 2020-21, so to restore the program to the FY 2020-21 level of available funds will require $500,000. The alternative, restoring $100,000, is based on the level of actual expenditure in FY 2019-20 when this program was funded through two separate line items and the second line item (for Rural Teaching Fellowships) was spending approximately $100,000 of the annual $500,000 appropriated for it.

The staff recommendation is intended to provide a reasonable level of base ongoing funding, but staff does believes that this is a line item that can be temporarily increased or decreased in response to short-term available funding. Staff is aware of widespread concern about a particularly acute educator shortage following the pandemic, and this might be a program that could have some impact on the problem in rural areas with additional temporary resources.

ANALYSIS:

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Line Item and Funding Background: In FY 2020-21, the Rural Teacher Recruitment, Retention, and Professional Development line item is used to support:

• Programs authorized under Sections 23-76-101 through 106, including funding for a rural education coordinator (now housed at the University of Northern Colorado), funding for the high school teacher cadet program in rural schools, stipends for student teachers doing student teaching in rural areas (up to $4,000 per student teacher), stipends for teachers in rural areas pursuing alternative teacher certification, and stipends for rural teachers who are pursuing National Board Certification and teachers pursuing other specified professional development activities (up to $6,000 per teacher).

• The Rural Teaching Fellowship Program, authorized under section 23-78-302 through 307, which provides $10,000 fellowships for student teachers in rural areas that are jointly supported by the state and the higher education institution where the student is studying. The State’s contribution is $5,000 per student teacher. This program was previously funded in a separate line item and was consolidated into the Rural Teacher Recruitment, Retention, and Professional Development line item in FY 2020-21.

The Rural Teaching Fellowship Program was significantly underspent for multiple years but was allowed to roll-forward unspent funds. Senate Bill 20-158 (Professional Training for Educators; Todd/McLachlan, Wilson) made changes to how the various rural teacher programs were managed, allowing unused funds from the Fellowship Program to be used for the various teacher stipend programs but also terminating the Fellowship Program’s authority to roll forward funds after FY 2020- 21. Under the provisions of this bill:

• Teaching fellowships, which are matched by higher education institutions, are funded up to the level of demand; • Of the remaining funds, 50.0 percent is allocated for stipends for alternative licensure teachers, 25.0 percent for stipends for rural student teachers, and the remaining 25.0 percent for the other stipend programs (current rural teachers seeking National Board certification or credentials to allow them serve as concurrent enrollment teachers.

Total funding for the stipend programs was enhanced in FY 2020-21 by over $500,000 in roll-forw ard funds from the Rural Teaching Fellowship Program, which facilitated an FY 2020-21 budget balancing reduction by the General Assembly of $500,000 General Fund for FY 2020-21.

FY 2020-21 Use of Funds and Funds Available Compared to FY 2021-22 Request RURAL TEACHER RECRUITMENT, RETENTION, AND PROFESSIONAL DEVELOPMENT APPLICATIONS, AWARDS, AND REVENUE FOR COMBINED PROGRAMS FY 2018-19 FY 2019-20 FY 2020-21 Stipends/ Amount per Projected Stipends/Fellowships Stipends/Fellowships Fellowships Award Expenditures Expenditures Applied Awarded Applied Awarded Applied Awarded Rural student teacher stipend 68 57 87 18 131 55 $4,000 $220,000 (23-76-104) Alt Licensure teacher stipends 144 43 120 48 140 100 4,500 453,000 (23-76-106)

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RURAL TEACHER RECRUITMENT, RETENTION, AND PROFESSIONAL DEVELOPMENT APPLICATIONS, AWARDS, AND REVENUE FOR COMBINED PROGRAMS FY 2018-19 FY 2019-20 FY 2020-21 Stipends/ Amount per Projected Stipends/Fellowships Stipends/Fellowships Fellowships Award Expenditures National Board Certification 35 24 13 13 13 11 4,250 51,000 (23-76-106) Teachers seeking credential for concurrent enrollment (23-76- 20 17 6 6 87 25 6,000 150,000 106) Rural teacher fellowship program (Section 23-78-305, 14 14 18 14 22 22 5,000 110,000 CRS) Subtotal Total #s and Expenses - 281 155 244 99 393 213 $984,000 stipends/fellowships

Department Administration 42,300 Teacher Cadet Program (23-76- 50,000 105) Rural Education Coordinator 145,000 (23-76-103) Total Estimated 1,221,300 Expenditures

Revenue Rural Teacher Recruitment, Retention & Prof Dev. Line $709,354 Item Roll forward from prior years 510,000 Total Base Revenue $1,221,300 Department Request for FY 2021-22, including request to

eliminate Rural Education Coordinator $564,373 FY 2021-22 Informal Request Above/(below) FY 2020-21 Funding ($656,927)

Rural Educator Shortages and Current and Future Demand for the Program: As reflected in the chart above, demand for the Rural Teacher programs has been growing, and, even with the funding restoratio n recommended by staff, there will be more applicants than funds available. The table below is from the Department of Education’s Rural Educator Shortage Survey results (FY 2018-19).7 As shown, the survey shows up to 600 positions per year in rural areas that are unfilled or filled with teachers pursuing alternative licensure, retired teachers, or other “stop gap” measures.

7 https://www.cde.state.co.us/educatortalent/edshortage-surveyresults

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Based on these figures, it appears to staff that the portions of the Rural Educator programs that support rural student teachers and teachers pursuing alternative licensure in rural areas could make a significant impact on rural teacher shortages.

Rural Educator Shortages (FY 2018-19 CDE Survey) Rural and Small Rural Districts Open positions 157 Filled by long term substitutes 63 Filled by retired 77 Filled by alternative licensure candidates 193 Filled by emergency candidates 65 Unfilled 43 Total 598

Program Outcomes: In response to Committee hearing questions the Department noted that programs funded in this line item are already demonstrating results. For example, recipients of a $4,000 stipend for completing their student teaching a rural areas are three times more likely to be hired by a rural district than other educator preparation program graduates. Likewise, recipients of in-services rural teacher stipends had 100% one-year retention compared to 80.7 percent of all rural teachers in the state during a similar period. Staff looks forward to future data on the programs’ impacts.

 STAFF-INITIATED RESTORE TEACHER MENTOR GRANT PROGRAM FUNDING

REQUEST: The Department did not request that funding for this program be restored.

RECOMMENDATION: Staff recommends that the Committee partially or fully restore funding for the Growing Great Teachers - Teacher Mentor Grant Program. Staff’s preliminary recommendation is to provide funding of $548,477 and 0.5 FTE. This would restore the funding for a staff position and $500,000 of the $1,125,000 in grants originally anticipated for the program. This would create a foundation from which legislators could choose to go up or down depending upon funds available. Staff is currently seeking additional information on whether there is likely to be sufficient demand to justify a higher level of funding in this first post-pandemic year if the State has sufficient resources available.

ANALYSIS: Background: Senate Bill 19-190 (Teacher Preparation Program Support by Todd & Rankin/McLachlan & Wilson) created the Teacher Mentor Grant Program in the Department to provide money to partnering local education providers and educator preparation programs to provide training and stipends for teachers who serve as mentors for teacher candidates participating in clinical practice. The Department established the grant application, review, and award procedures and collaborated with the Department of Education to create a new mentor endorsement through the State Board of Education, which was adopted in November 2019. However, due to budget shortfalls, the program grant funding was eliminated in FY 2019-20 (so it was never made available), and funding for the associated staff position was eliminated in FY 2020-21.

This bill also required that the Department to research best practice in educator preparation programs, adopt guidelines in collaboration with the Department of Education by January 1, 2020, and prepare a report, to assist educator preparation programs in adopting and implementing best practice.

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Under the statute added by this bill at Section 23-78-101 through 105, C.R.S., subject to available appropriation, the grant program: • Provides money to partnering local education providers and education preparation programs to provide training and stipends for teachers serving as mentors for teacher candidates. • The duration of each grant is to be for up to three years. • Applicants must include a plan by which the applicant intends to sustain the mentor program after the grant period ends. • The Department is to ensure, to the extent practicable, that grant recipients include applicants of varying size from rural, urban, and suburban areas across the state. • The Department may only award grants to applicants that: o Commit to implementing programs that recruit teachers with three years of experience (as practical), are rated effective or higher, and who hold a masters certification or are national board certified; o Provide training in mentoring best practices; o Ensure that the employing local education provider provides time for the mentor to provide mentoring o Pays each mentor teacher a stipend of at least $2,000 or $2,500 if masters level or national board certified. o Provide mentoring for teacher candidates and for newly employed teachers through and induction program for at least two school years after employment o Collect required data.

Staff Considerations: • The statutory and regulatory framework exist for this program to be re-launched. o During budget balancing, staff recommended eliminating most funding for this program in FY 2019-20 and FY 2020-21, given that it was a new grant program and relatively easy to stop before it was fully launched. (The window for grant award submissions was in March 2020, so funding was pulled back before any grants were awarded.) However, staff did not recommend (and the Committee did not act) to strike the statutory provisions created by S.B. 19-190. This enables funding to be restored if desired. o Consistent with the requirements of S.B. 19-190, the Department of Education has established a certification program for teacher mentors. Thus, the necessary regulatory framework also exists for re-launching this program. • Legislators have expressed great concern about teacher shortages. The COVID-19 pandemic will likely exacerbate an already difficult situation. • A considerable body of data indicates that an important driver in teacher shortages is the inability to retain teachers. This, in turn, seems to be related to insufficient support for new teachers entering the field. As noted in the legislative declaration for S.B. 19-190:

“Local education providers who hire teachers who have not completed an adequate preparation program, including high-quality clinical practice, are likely to experience a high turnover rate because new teachers who are not well trained leave the profession in their first year of teaching at more than twice the rate of those who have had clinical practice and rigorous preparation” [Section 23-78-102 (1)(b), C.R.S.]

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• The teacher mentor program established in S.B. 19-190 seems reasonably designed to help address teacher retention. • The fiscal note for this bill indicated a need for grant funding of $1,125,000 General Fund based on the following calculation: Teacher preparation programs place over 1,000 pre-service teacher candidates in clinical experience annually. One half will be partnered with a mentor teacher w ho will be compensated (half with a highly qualified mentor and half with a regularly qualified mentor). If each grant lasts three years, the funding originally outlined in the fiscal note appears designed to meet the demand to provide financial support for half of the state’s teacher mentors within three years.

 STAFF-INITIATED COLORADO GEOLOGICAL SURVEY COMMON POLICY/INFLATIONARY ADJUSTMENT AND ELIMINATE INFORMATIONAL AMOUNTS FROM LINE ITEM

REQUEST: The Department did not request any adjustment for the Colorado Geological Survey line item.

RECOMMENDATION: Staff recommends:

• For FY 2021-22 provide an increase consistent with the Committee’s community provider common policy adjustment of 2.5 percent. While staff does not believe this line item should necessarily be considered a “community provider”, staff believes it should receive inflationary adjustments broadly consistent with the level of increase provided for state agency staff. Given Committee decisions to provide a 2.5 percent salary survey increase and a 2.5 percent community provider rate increase, staff recommends using 2.5 percent for this line item. If the Committee determines that it is unable to provide a community provider increase at this level, staff requests permission to adjust the appropriation for this line item to remain consistent with the community provider common policy for FY 2021-22.

• Staff recommends funding the proposed increase from the General Fund, rather than the Operational Account of the Severance Tax Trust Fund. As the Committee is aware, severance tax revenues have been significantly reduced, and the Executive Branch and Legislative Branch are considering how to manage the decline. In this environment, staff does not wish to add to the problem of the shortfall but also does not believe that the CGS should be more negatively affected than other Tier 1 Severance Tax programs by losing access to an inflationary adjustment based on the program’s historic funding source.

• Staff also recommends eliminating the amounts in this line item for cash funds, reappropriated funds and federal funds shown for informational purposes. With this change, the only fund sources that would be shown in the line item would be General Fund and Tier 1 Severance Tax appropriations. When this program was located in the Department of Natural Resources, the cash and reappropriated amounts represented true appropriations and actual expenditure data was available through the state accounting system. Now that the Geological Survey is at the Colorado School of Mines, this data can only be obtained through annual data requests. While this background information may be periodically of interest, similar informational amounts are not included for the other programs funded through this section of the Long Bill.

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COLORADO GEOLOGICAL SURVEY REMOVE 2.5 FY 2020-21 FY 2021- INFORMATIONAL PERCENT APPROP 22 REC. AMOUNTS INCREASE General Fund $567,208 $54,878 $622,086 Severance Tax 1,627,932 * 1,627,932

Fees from non-state agencies 175,099 (175,099) 0 Fees from state agencies 51,958 (51,958) 0

Federal funds 306,903 (306,903) 0

Total $2,729,100 ($533,960) $54,878 $2,250,018 * $40,678 for a 2.5 percent inflationary increase is assigned to the General Fund for FY 2021-22.

Associated with eliminating the informational fund, staff recommends reducing the FTE shown by 3.0 FTE, which reduces the appropriation from 15.5 FTE to 12.5 FTE.

ANALYSIS: Background on the Colorado Geological Survey: Pursuant to H.B. 12-1355 and H.B. 13-1057 and an MOU between the Department of Natural Resources and the Colorado School of Mines, the Colorado Geological Survey (CGS), excluding the Avalanche Information Center, was transferred to the Colorado School of Mines in mid-FY 2012-13. The transfer downsized the CGS and the amount of money it received from the Operational Account of the Severance Tax Trust Fund (reduction of $908,000), although the JBC subsequently added $300,000 General Fund to the appropriation to retain some functions that were not included in the original transfer plans. An additional $105,494 General Fund and 1.0 FTE was added in FY 2015-16.

The CGS is the only entity funded from "Tier I" of the Operational Account of the Severance Tax Trust Fund that is not within the Department of Natural Resources.

Most State funding provided for the Survey is for Geologic Hazard mitigation, consistent with an MOU between the school of Mines and the Department of Natural Resources when the CGS was transferred. However, the General Fund provided by the General Assembly has allowed the Division to retain a nucleus of activities in a broader range of areas.

• land use reviews, funded through fees paid by local governments (new subdivision proposals and new school locations must be reviewed by CGS for geologic hazards); • other geologic hazard work supported with Severance tax (e.g., identifying areas of natural geologic hazards, providing related technical assistance to state and local governments, creating guidelines for land use in natural hazard areas); • surface mapping activities, which are closely related to and integrated with the geologic hazard work and are supported with both Severance tax and federal funds. • groundwater activities, including mapping, reporting, and technical assistance and advisory work for state and local governments (1.0 FTE supported with General Fund). • energy and minerals activities, including mapping and reporting on mineral deposits and energy resources, as well as reporting on the status of the energy industry. This includes projects related

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to geothermal energy and carbon sequestration (1.5 FTE total for energy and minerals activities supported with General Fund). The Oil and Gas Commission in the Department of Natural Resources is now doing this work internally for oil and gas deposits. The CGS continues to do some work in this area for other minerals.

The CGS is expected to bring in additional matching funds to augment the state support provided. The move to the Colorado School of Mines was expected to facilitate growth of such outside funding opportunities.

As specified in the Legislative Declaration the statute authorizing this program (Section 23-41-202), “It is the intent of the General Assembly that sufficient funds be provided to cover the direct costs of a base staff and their operating expenses to ensure functional continuity of the Colorado geological survey as provided by statute and as determined to any memorandum of understanding [with the Department of Natural Resources]….”

Recent History Regarding Inflationary and Common Policy Increases • Starting with the FY 2017-18 Long Bill, the JBC moved centrally-appropriated items for the Colorado Geological Survey (CGS) to the CGS line item. At the time, staff anticipated that future growth in the line item would be based on alternative growth factors, rather than actual pots (centrally appropriated line item) calculations, since benefits for CGS staff are no longer incorporated in the state benefits system. CGS staff now receive benefits through the Colorado School of Mines, which charges the CGS a flat 40 percent for benefits for all staff.

• Nonetheless, for FY 2018-19 and FY 2019-20, CGS, in consultation with the Department, chose to submit a request based on state common policy for salary survey and other benefits.

• This mechanism was complex and appeared to generate many errors. Further, it could lead to unreasonable swings in funding for a small agency. As described in the FY 2019-20 figure setting:

“….staff believes that the best solution is simply to provide an annual inflationary increase for the line item. For FY 2019-20, staff recommends using CY 2018 inflation. The Committee could consider using a different inflationary proxy, such as the annual community provider rate increase, to provide an annual adjustment. In years in which funding for increases for staff statewide is limited, increases may simply not be available. However, the community provider rate increase, as set in recent years, has typically run below the amounts required to adequately maintain programs, leading to periodic “rebasing” of program rates to address shortfalls. Staff would like to avoid this type of rebasing process if feasible and instead provide for consistent annual increases on a slightly larger scale.“

• For FY 2020-21, the Department included no increase for the CGS--either through common policy or through an inflationary adjustment. Staff initially recommended an inflationary adjustment but subsequently removed this through the FY 2020-21 budget balancing process.

• Staff continues to believe the CGS should receive routine inflationary increases. The CGS represents a specialty function of the Colorado School of Mines with a statutory mission focused on providing specified public services, rather than educational functions.

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• The Department did not submit a request for an inflationary adjustment for CGS for FY 2021-22 but the Executive Request also included no community provider increases, no increases above funding restoration for higher education governing boards, and, initially, no staff salary adjustments. As the common policy adopted by the JBC thus far includes community provider and staff salary increases, staff has recommended an aligned increase for the Geological Survey. However, in light of statewide shortfalls in severance tax revenue, staff recommends that any inflationary increase be funded from the General Fund for FY 2021-22.

 TECHNICAL ADJUSTMENT: HIGHER EDUCATION FEDERAL MINERAL LEASE COP PAYMENTS

REQUEST: The Department requested adjustments for the Higher Education Federal Mineral Lease Certificate of Participation (COP) payment based on Federal Mineral Lease (FML) funds available and the COP payment schedule. The adjustments include a decrease in the total appropriation of $1,006 and a fund split adjustment that reduces the cash funds appropriation by $140,000 and increases the General Fund amount by $138,994, leaving a total cash funds appropriation of $360,000.

BACKGROUND: In 2008, the General Assembly authorized the State to enter into lease-purchase agreements (certificates of participation/COPs) to fund capital construction projects for state- supported institutions of higher education. The decision reflected: (1) a desire to fund additional capital construction projects at state higher education institutions despite limited available capital construction funds; and (2) projected increases in federal mineral lease (FML) revenue due to natural gas leases on the Roan Plateau. Pursuant to S.B.08-233 and H.J.R 08-1042, the General Assembly authorized COP payments to fund 17 projects for higher education academic buildings across the state. Funding was ultimately sufficient to fund the first 12 projects, with some additional controlled maintenance projects authorized through H.B. 12-1357 using unspent COP proceeds.

Section 23-1-106.3 (1)(b)(IV), C.R.S. specifies that the anticipated annual state-funded payments for the principal and interest components under all lease purchase agreements on the projects may not exceed an average of $16,200,000 per year for the first ten years of payment and may not exceed an average of $16,800,000 for the second ten years of payment. Payments will end in FY 2027-28, and no new issuances are allowed under current law.

The COP payments are made from the Higher Education FML Revenues Fund (Revenues Fund), created in Section 23-19.9-102, C.R.S. The Revenues Fund receives statutory allocations of FML revenue, including “spillover” from other funds that receive FML revenue and, per H.B. 16-1229, 50 percent of FML “bonus” payments. However, under statute and the COP agreements, if amounts in the Higher Education FML Revenues Fund are insufficient to cover COP payments due, the General Assembly transfers other funds into the Revenues Fund to make the necessary payment.

Since FY 2011-12, the General Assembly has frequently had to partially or entirely replace appropriations from the FML Revenues Fund with General Fund due to insufficient FML revenues. The table below compares funding sources for COP payments since the program’s inception.

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HIGHER EDUCATION FML LEASE PURCHASE APPROPRIATIONS HISTORY CAPITAL HIGHER CONSTRUCTION EDUCATION FUND/ FML GENERAL REVENUES FUND FUND TOTAL

FY 2008-09 $0 10,000,000 $10,000,000 FY 2009-10 0 16,652,725 16,652,725 FY 2010-11 0 8,877,550 8,877,550 FY 2011-12 4,066,510 8,379,790 12,446,300

FY 2012-13 420,184 18,165,191 18,585,375 FY 2013-14 18,587,975 0 18,587,975 FY 2014-15 18,587,556 0 18,587,556 FY 2015-16 5,781,075 11,991,975 17,773,050 FY 2016-17 12,125,175 5,650,000 17,775,175 FY 2017-18 16,073,025 1,700,000 17,773,025 FY 2018-19 17,035,263 650,000 17,685,263 FY 2019-20 16,294,250 1,140,000 17,434,250 FY 2020-21 16,933,244 500,000 17,433,244 Total to-date $125,904,257 $83,707,231 $209,611,488

Notes: The initial appropriation was included S.B. 08-233, which authorized the program (Capital Development Committee bill). Subsequent appropriations appeared in the Capital Construction section of the Long Bill (Treasury) until FY 2015-16, when the appropriation was included in the Treasury operating appropriations section. From FY 2016-17 on, appropriations are in the Department of Higher Education. Obligations end FY 2027-28.

RECOMMENDATION: Staff recommends the Department’s request for Lease Purchase of Academic Facilities Pursuant to Section 23-19.9-102, C.R.S., including the requested fund source adjustment. The Department calculates a current balance of $510,283 available for FY 2021-22 based on revenue received through January 2021 and spending obligations for FY 2020-21. Based on the variability of FML funding, including bonus funds which support this line item, staff does not rely on projected FML revenue) Further, in light of periodic negative adjustments to the FML Revenues Fund based on federal actions, staff recommends retaining a small uncommitted balance. The request will leave $150,000 in the fund as cushion.

Pursuant to statute and the state’s COP agreements, if amounts in the Higher Education FML Revenues Fund are insufficient to cover COP payments due, the General Assembly transfers other funds (in this case General Fund) into the Revenues Fund to make the necessary payment. As specified by H.B. 16-1229, these appropriations are made to the Department of Higher Education for transfer to the Treasurer for payment of the COPs. The Department of the Treasury has continuous spending authority for the funds received.

In the table below:

• The first line item deposits General Fund into the Higher Education FML Revenues Fund.

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• The second line item provides appropriations for the FY 2021-22 COP payments, including both cash funds (from FML revenues) and reappropriated funds (from the General Fund appropriated in the first line item). • As shown, the staff recommendation includes the $360,000 from cash funds requested; as a result, nearly $140,000 additional from the General Fund is required compared to FY 2020-21.

COLORADO COMMISSION ON HIGHER EDUCATION AND HIGHER EDUCATION SPECIAL PURPOSE PROGRAMS, LEASE PURCHASE PAYMENTS AND CAPITAL-RELATED OUTLAYS, APPROPRIATION TO THE HIGHER EDUCATION FEDERAL MINERAL LEASE REVENUES FUND FOR LEASE PURCHASE OF ACADEMIC FACILITIES TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $16,933,244 $16,933,244 $0 $0 $0 0.0 TOTAL $16,933,244 $16,933,244 $0 $0 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $16,933,244 $16,933,244 $0 $0 $0 0.0 Lease purchase payment adjustments 138,994 138,994 0 0 0 0.0 TOTAL $17,072,238 $17,072,238 $0 $0 $0 0.0

INCREASE/(DECREASE) $138,994 $138,994 $0 $0 $0 0.0 Percentage Change 0.8% 0.8% 0.0% 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $17,072,238 $17,072,238 $0 $0 $0 0.0 Request Above/(Below) Recommendation $0 $0 $0 $0 $0 0.0

COLORADO COMMISSION ON HIGHER EDUCATION AND HIGHER EDUCATION SPECIAL PURPOSE PROGRAMS, LEASE PURCHASE PAYMENTS AND CAPITAL-RELATED OUTLAYS, LEASE PURCHASE OF ACADEMIC FACILITIES PURSUANT TO SECTION 23-19.9-102 TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $17,433,244 $0 $500,000 $16,933,244 $0 0.0 TOTAL $17,433,244 $0 $500,000 $16,933,244 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $17,433,244 $0 $500,000 $16,933,244 $0 0.0 Lease purchase payment adjustments (1,006) 0 (140,000) 138,994 0 0.0 TOTAL $17,432,238 $0 $360,000 $17,072,238 $0 0.0

INCREASE/(DECREASE) ($1,006) $0 ($140,000) $138,994 $0 0.0 Percentage Change (0.0%) 0.0% (28.0%) 0.8% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $17,432,238 $0 $360,000 $17,072,238 $0 0.0 Request Above/(Below) Recommendation $0 $0 $0 $0 $0 0.0

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 TECHNICAL ADJUSTMENT: UNIVERSITY OF COLORADO, LEASE PURCHASE OF ACADEMIC FACILITIES AT FITZSIMONS

REQUEST: The Department requests $14,156,976 for FY 2021-22 Fitzsimons Lease Purchase Payments. The total includes a technical adjustment total funds related to the COP payment schedule and an adjustment based on anticipated Tobacco Settlement revenue available. The request includes $7,617,736 from the General Fund and $6,539,240 tobacco settlement funds.

BACKGROUND: The General Assembly authorized the State to enter into a lease purchase agreement for the University of Colorado Health Sciences Center at Fitzsimons pursuant to H.B. 03-1256 (Section 23-20-136 (3.5), C.R.S. The bill authorized an agreement for up to twenty-five years, with the total amount of the agreement not to exceed $202,876,109 plus administrative, monitoring, closing costs and interests. The bill further specified that annual aggregate rentals authorized would not exceed $15,100,000. The General Assembly further authorized use of up to $8,000,000 per year of Tobacco Master Settlement revenues for this purpose in Section 23-20-136 (3.5), C.R.S. The annual amount is based on total tobacco settlement funds received and the statutory allocation of the funds. These funds are deposited to the Fitzsimons Trust Fund.

This line item was moved from the capital construction section of the Long Bill to the operating section in FY 2015-16.

RECOMMENDATION: The Department requests $14,156,976 for FY 2022-23 Fitzsimons Lease Purchase Payments. While staff recommends the same total funding as the request, staff recommends a $400,000 fund split adjustment, increasing the General Fund by $400,000 and reducing the Tobacco Settlement figure by the same amount, based on the FY 2022-22 forecast for tobacco settlement revenue and reserve funds available to $6,100,000.

• The FY 2022-23 tobacco revenue forecast for this program is $6,111,390. • CU reports a projected starting FY 2021-22 fund balance of $516,941 in the Fitzsimons Trust Fund that can be used to cover a shortfall if tobacco revenue (received in April 2021) is less than the projection. If it is more, the balance goes into this fund balance. With the staff-recommended adjustment, the fund balance is projected to provide a cushion of 8.5 percent against a forecast error.

COLORADO COMMISSION ON HIGHER EDUCATION AND HIGHER EDUCATION SPECIAL PURPOSE PROGRAMS, LEASE PURCHASE PAYMENTS AND CAPITAL-RELATED OUTLAYS, UNIVERSITY OF COLORADO, LEASE PURCHASE OF ACADEMIC FACILITIES AT FITZSIMONS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $14,153,707 $7,653,707 $6,500,000 $0 $0 0.0 TOTAL $14,153,707 $7,653,707 $6,500,000 $0 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $14,153,707 $7,653,707 $6,500,000 $0 $0 0.0 Lease purchase payment adjustments 3,269 403,269 (400,000) 0 0 0.0 TOTAL $14,156,976 $8,056,976 $6,100,000 $0 $0 0.0

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COLORADO COMMISSION ON HIGHER EDUCATION AND HIGHER EDUCATION SPECIAL PURPOSE PROGRAMS, LEASE PURCHASE PAYMENTS AND CAPITAL-RELATED OUTLAYS, UNIVERSITY OF COLORADO, LEASE PURCHASE OF ACADEMIC FACILITIES AT FITZSIMONS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE INCREASE/(DECREASE) $3,269 $403,269 ($400,000) $0 $0 0.0 Percentage Change 0.0% 5.3% (6.2%) 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $14,156,976 $7,617,736 $6,539,240 $0 $0 0.0 Request Above/(Below) Recommendation $0 ($439,240) $439,240 $0 $0 0.0

 PENDING COMMITTEE DECISION ON WILDFIRE MITIGATION FUNDING

RECOMMENDATION: During figure setting for the Department of Natural Resources on March 3, 2021, the JBC analyst for that department recommended additional funding for two programs operated by the Colorado State Forest Service at Colorado State University. The recommendation was that funding for these programs be provided through Long Bill appropriations in the Department of Higher Education, as is allowed under current law. Specifically, staff recommended an increase of $7,000,000 General fund appropriated to the Forest Restoration and Wildfire Risk Mitigation Program Cash Fund, bringing the total appropriation for the line item to $8,000,000 General Fund. Staff also recommended an appropriation of $2,000,000 General Fund to the Healthy Forests and Vibrant Communities Cash Fund.

COMMITTEE ACTION: Committee action on this recommendation is pending. If the Committee approves additional funding through the Long Bill, staff will include any approved amounts in the FY 2021-22 Long Bill section for the Department of Higher Education, Colorado Commission on Higher Education Special Purpose programs.

 OTHER TECHNICAL ADJUSTMENTS: WICHE, VETERINARY MEDICINE CAPIT AL OUTLAY, BA1 ACCELERATION STIMULUS

The recommendation includes:

• A decrease of $1,000 (General Fund/reappropriated funds from indirect cost recoveries) for dues required for the Western Interstate Commission on Higher Education (WICHE)

• A fund split adjustment for Veterinary Medicine Capital Outlay that increases the state share by $7,128 (General Fund/reappropriated funds from departmental indirect cost recoveries)

• No FTE notation adjustment for the Department’s BA1 increase for the Colorado Opportunity Scholarship Initiative. The Department had requested 1.0 FTE (and no dollars) assuming a $15 million supplemental increase. As that has not been approved thus far, no FY 2021-22 adjustment has been applied. Staff notes that FTE notations are not binding.

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LINE ITEM DETAIL – COLORADO COMMISSION ON HIGHER EDUCATION

(A) ADMINISTRATION

ADMINISTRATION

This line item pays for personal services, contracts, and operating expenses associated with CCHE and staff. The sources of cash funds include indirect cost recoveries paid by CollegeInvest and College Assist, and fees paid by private institutions for program approval pursuant to Section 23-1-125 (5) and Section 23-2-104.5, C.R.S. The sources of reappropriated funds include indirect cost recoveries and a transfer from the Department of Education for aligning public education with postsecondary and workforce readiness standards.

Master Plan and Institutional Performance • Develop a master plan with institutions to achieve statewide expectations and goals [23-1-108] • In collaboration with the public institutions of higher education, ensure the Master Plan is implemented [23-1-108 (1.5)] • Submit annual reports to the General Assembly, and post on-line, each institution’s progress toward meeting Master Plan goals [23-1-108 (1.5)] • Negotiate performance contracts with the Colorado School of Mines and private institutions that participate in the College Opportunity Fund Program [23-41-104.6 and 23-1-108 (14)] • Implement policies to assure students can complete programs in a timely fashion [23-1-108 (13), 125] after reviewing o advising and counseling o the availability of courses o barriers to transferring course credits o costs o the implementation of core courses

Institutional Role and Mission and System Coordination • Define the role and mission of each institution within statutory guidelines [23-1-108] • Set admissions criteria consistent with the roll and mission of each institution, including enforcing requirements related to percentages of non-resident students that may be enrolled [23-1-108 (1) (d), (e), 113, 113.5, 113.7] • Establish service areas, designate regional education providers, and monitor courses provided out of state to ensure that no state funds are used for these [23-1-109, 127, 23-5-116, 23-60-207] • Authorize bachelor of applied science degrees at community colleges based on demonstrated need, cost-effectiveness, and considering whether such program could instead be provided conjunction with an accredited four-year institution. [23-1-133] • Establish and enforce transfer agreements and common course numbering, and resolve disputes [23-1-108 (7), 108.5] • Coordinate a system of core courses and associates degrees that may be transferred from one state institution to another. [23-1-125]

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• Standardize assessments of basic skills, specify which institutions may offer basic skills courses and supplemental academic instruction, and report to the General Assembly on program effectiveness [23-1-113, 113.3] • Coordinate a process to ensure eligible students are aware of their eligibility for an associate’s degree (reverse transfer program) [23-1-131] • Approve comprehensive academic and facilities master plans for the Auraria campus and resolve disputes [23-70-115, 23-70-106.5] • Establish policies for community colleges to become local district colleges [23-71-205]

State Support for Institutions • Develop and report on the system of funding for higher education established pursuant to H.B. 14-1319 [23-18-301 through 307] • Request operating funds for state institutions [23-1-109.7] • Negotiate fee-for-service contracts [23-1-109.7] • Oversee stipends [23-18-101 et seq.] • Report on College Opportunity Fund Program [23-18-207] • Prepare fiscal notes to help the legislature assess the impact of legislation • Approve the acceptance of gifts by institutions, if they require on-going state expenditures [23-5- 112]

Capital Construction • Regulate capital construction [23-1-106 [except as waived by CCHE], 106.3, 24-82-1202], including o setting space utilization standards to measure the need for new projects o approving long range and individual facility master plans o prioritizing projects for state funding • Managing appropriations from the Higher Education Federal Mineral Lease Revenues Fund for certificates of participation paid by the FML Revenues Fund [23-1-106.3]

Financial Aid, Student Loans, College Savings Accounts • Oversee financial aid programs [23-3.3-101 et seq.] • Distribute financial aid to institutions [23-3.3-101 et seq.] • Act as designated state agency to administer federal loan programs [23-3-101 through 107, 23-3.1- 103; being phased out] • Oversee CollegeInvest [23-3.1-205.7] • Oversee the Colorado Opportunity Scholarship Initiative (COSI) under the Executive Director and the COSI advisory board [23-3.3-1001 et. seq.]

Tuition and Fee Policy • Set tuition and fee policies based on roll and mission [23-1-108 (12)] • Approve fixed tuition policies [23-5-131] • Negotiate reciprocal tuition agreements [23-1-108 (10), 112, 23-3.3-601] • Adopt policies concerning the definition, assessment, increase, and use of fees, and the minimum necessary student input [23-1-123]

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Outreach • Perform outreach to potential students [23-1-119.1, 23-1-119.2, 23-15-110.5, 23-18-205]

Oversee Select Statewide Policies • Establish policies for determining student residency status within statutory guidelines [23-1-105, 23-7-101 et seq.] • Adopt statewide affirmative action policies [23-1-108 (1) (f)] • Ensure academic credit for American sign language courses [23-1-128]

Coordinate with State Board of Education and Department of Labor on Workforce Needs • Analyze state workforce needs versus credential production in coordination with other agencies [23-1-130] • Coordinate with the State Board of Education to define postsecondary and workforce readiness, align admissions criteria and assessments, and report to school districts on whether students are prepared [23-1-113, 113.2, 113.3, 119] • Coordinate with the state board of education to ensure that parents and guardians of public school students receive notice regarding postsecondary admissions requirements and precollegiate course requirements [23-1-119.1, 119.2] • Develop a strategic plan for improving Pre-K-16 mathematics, science, and technology education [22-81-104, 22-83-102] • Coordinate with the State Board of Education regarding concurrent enrollment [22-35-107] • Review, approve, and regulate preparation programs for K-12 educators [23-1-121 et seq.] • Provide financial aid to teachers [23-3.3-901, 23-3.9-102] • Evaluate and implement 2-year educational programs for professional registered nursing [23-1- 126] • Provide financial aid to nursing professionals [23-3.3-701, 23-3.6-102; funding not presently available] • Collaborate with the Workforce Development Council in the Department of Labor and Employment, the Department of Education, and the community college system to develop and publicize career pathways for students. [24-46.3-104]

Data Reporting and Collecting • Prescribe uniform reporting and collect data regarding o financial information [23-1-105] o counting and classifying student FTE [23-1-105] o academic data [23-1-108 (8)] o students eligible for stipends [23-18-202, 203] o financial aid [23-3.3-101] o shared data with the state board of education [23-1-109.3, 119.3] o performance [23-1-108, 23-41-104.6] o facility inventories [24-30-1303.5] o auxiliary bonds [23-5-102] o students convicted of riot offenses [23-5-124, 126] o information requested by federal agencies in anti-terrorism investigations [23-5-126]

Promote Technology Transfer

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• Coordinate technology policy • Facilitate the transfer of technology from higher education to the private sector [23-1-106.7, 23- 5-121] • Facilitate the establishment of the statewide telecommunications network [24-30-1804]

Staffing: The staff in this line item were identified in 2020 as falling into the following major categories:

• Executive and administrative – Includes director, chief operating officer, chief of staff, special projects and industry partnerships, communications staff (2.5 FTE), and support staff – 9.3 FTE excluding the IT director. • Budget and finance – 7.9 FTE • Research/policy/IT and data management – 8.0 FTE including the IT director • Academic affairs – 4.2 FTE

Since FY 2013-14, the General Assembly has added $289,227 and 3.0 FTE to this line item for data analysis staff (1.0 FTE position was internally redirected by the Department to a "communications manager" position) and $306,169 and 3.0 FTE for financial management staff pursuant to H.B 14- 1319.

In part because this Department receives significant off-budget grant funds, over the years staff roles and financing sources may shift.

REQUEST: The Department requests $3,435,107 total funds from fees and indirect cost collections that offset General Fund otherwise required, including.

RECOMMENDATION: The following table summarizes the staff recommendation. The recommendation differs from the request due to committee common policy on S.B. 18-200 (PERA) annualization.

TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $3,434,851 $0 $202,082 $3,232,769 $0 30.0 TOTAL $3,434,851 $0 $202,082 $3,232,769 $0 30.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $3,434,851 $0 $202,082 $3,232,769 $0 30.0 Annualize prior year legislation (224) 0 0 (224) 0 0.0 TOTAL $3,434,627 $0 $202,082 $3,232,545 $0 30.0

INCREASE/(DECREASE) ($224) $0 $0 ($224) $0 0.0 Percentage Change (0.0%) 0.0% 0.0% (0.0%) 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $3,435,107 $0 $202,082 $3,233,025 $0 30.0 Request Above/(Below) Recommendation $480 $0 $0 $480 $0 0.0

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(B) DIVISION OF PRIVATE OCCUPATIONAL SCHOOLS

This program is responsible for reviewing the curriculum and establishing standards for private occupational schools in Colorado, pursuant to Section 12-59-101, C.R.S., et. seq. The Division regulates over 356 private occupational schools in Colorado and 40 out-of-state schools that deliver education or training in areas such as cosmetology, real estate, IT/business, massage therapy, trucking, automotive, bartending and allied healthcare professions. The vast majority of schools regulated by the Division are not subject to any other accreditation or quality review process. The Division thus helps to protect students from deceptive trade practices and substandard educational programs. It also maintains the student records of any institution that closes, among other functions.

As outlined in statute, the Division reports to the executive director of the Department, rather than to the Division of Occupational Education within the Community College System. The Board of Private Occupational Schools, which consists of seven members appointed by the Governor and confirmed by the Senate, advises the executive director and has regulatory oversight and rule-making authority.

Division FTE are supported through fees on the regulated schools. This includes the Director, Deputy Director who focuses on investigation and compliance, 1.0 administrative staff who supports both the DPOS board and staff, and 4.0 program specialists who assist schools through the application and renewal process and focus heavily on technical assistance. For FY 2017-18, the General Assembly approved a 2.0 FTE increase for the Division, including an investigative specialist to identify noncompliance issues, including substandard education and deceptive sales and trade, and a data and research specialist. Among other responsibilities, the data and research specialist will assist the Division in moving from a paper-based to an electronic system for managing records.

Current fees on schools subject to DPOS review are as follows: • Approval for a provisional school (a new school) is $5,000 per school and $2,500 per campus • Renewal (every 3 years) is $2,000 • Review of new programs and courses is $500 • Quarterly assessments per student are $5.00 ($20/year/student)

STATUTORY AUTHORITY: Section 12-59-101, C.R.S., et. seq.

REQUEST: The Department requests $1,011,100 cash funds and 9.8 FTE for this line item, including annualization of FY 2020-21 request R8 (Division of Private Occupational Schools)

RECOMMENDATION: The staff recommendation is reflected in the table below and annualizes FY 2020-21 request R8.

COLORADO COMMISSION ON HIGHER EDUCATION AND HIGHER EDUCATION SPECIAL PURPOSE PROGRAMS, DIVISION OF PRIVATE OCCUPATIONAL SCHOOLS, DIVISION OF PRIVATE OCCUPATIONAL SCHOOLS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION

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COLORADO COMMISSION ON HIGHER EDUCATION AND HIGHER EDUCATION SPECIAL PURPOSE PROGRAMS, DIVISION OF PRIVATE OCCUPATIONAL SCHOOLS, DIVISION OF PRIVATE OCCUPATIONAL SCHOOLS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE FY 2020-21 Appropriation $1,011,100 $0 $1,011,100 $0 $0 9.8 TOTAL $1,011,100 $0 $1,011,100 $0 $0 9.8

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $1,011,100 $0 $1,011,100 $0 $0 9.8 Annualize prior year legislation 24 0 24 0 0 0.0 Annualize prior year budget actions (100,000) 0 (100,000) 0 0 0.0 TOTAL $911,124 $0 $911,124 $0 $0 9.8

INCREASE/(DECREASE) ($99,976) $0 ($99,976) $0 $0 0.0 Percentage Change (9.9%) 0.0% (9.9%) 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $1,011,167 $0 $1,011,167 $0 $0 9.8 Request Above/(Below) Recommendation $100,043 $0 $100,043 $0 $0 0.0

(C) SPECIAL PURPOSE

WESTERN INTERSTATE COMMISSION ON HIGHER EDUCATION (WICHE)

The line provides funding for Colorado's dues to support WICHE. This coalition of 15 western states works to benefit members through shared research data and the development of reciprocity and student exchange programs. WICHE provides the following main services:

▸ coordinates the undergraduate, graduate and professional student exchange programs; ▸ operates conferences on national and western higher education issues; ▸ conducts research and develops publications on regional and national higher education issues (tuition and fee report, summary of recent legislation, student demographics, etc.); and ▸ provides a forum for exchanging information, such as interstate technology efforts.

Through WICHE's undergraduate exchange program, students pay 150 percent of resident tuition rates. Colorado sends more students out of state than it accepts through this program. Each state controls the circumstances under which they accept students.

The graduate education exchange program allows students to attend selected uncommon, specialized, or high-quality graduate programs in other WICHE states at resident tuition rates. For the receiving institution, accepting out-of-state students at the reduced WICHE rate can help fill out low-enrollment courses.

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In WICHE's professional exchange program, students pay resident tuition rates and the sending state pays a support fee to the receiving state. Colorado is a net importer of students through the professional exchange program.

Examples of WICHE's research publications and data sharing initiatives can be found at WICHE's web site: http://www.wiche.edu/

Dues represent approximately one-third of WICHE's annual budget and are equally apportioned among the 15 members. Grants from foundations and corporations and federal support represent the remainder of WICHE's budget.

This line item relies on General Fund appropriations that are entirely offset by indirect cost recoveries. WICHE dues are now included in the pool of recoverable costs in the Department’s indirect cost collection plan.

STATUTORY AUTHORITY: Sections 24-60-601 and 23-1-108 (10), C.R.S..

REQUEST: The Department requests $159,000 reappropriated funds for this line item, including $1,000 in fee decreases.

RECOMMENDATION: Staff recommends the request $159,000, including the requested fee adjustment.

WICHE – OPTOMETRY

This line provides funding for Colorado students to enroll in out-of-state institutions with optometry programs, including private institutions, at subsidized rates through an exchange set up by WICHE. The exchange offers an alternative to establishing such a program in Colorado, as there is currently no optometry school in the State. In return for discounted tuition, participating students agree to return to Colorado to practice optometry for the same number of years as they were supported, or to repay the state for its investment inflated by the federal PLUS student loan rate. As of FY 2015-16, 87 percent of graduates returned to the State.

The program typically serves about 25 students at any given time. The FY 2017-18 state support fee (paid by all states per student) was $17,725 per year, or about half of typical optometry school tuition. Since FY 2004-05, from 2 to 12 new students have been added to the program each year. Students are funded for their entire time in the multi-year program, so there are only a few students added each year, while others graduate (an O.D. program is typically 4 years).

Fiscal Year 2012-13 request BRI 7 proposed to phase out the program, but the General Assembly did not approve this request. In FY 2017-18, based on request R4, the General Assembly increased the appropriation by $44,125 to address the impact of inflation over multiple years. This annualized to add an additional $7,500 in FY 2018-19. In response to an FY 2017-18 RFI, the Department expressed its continued support for the program but did not support adding additional professional exchange programs.

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Due to revenue shortfalls, beginning in FY 2020-21, the JBC authorized reduction for the program to eliminate funding for positions that were vacated as students graduated.

The program is supported by General Fund that is offset by departmental and state indirect cost recoveries. The program is not included in the pool of recoverable costs in the Department’s indirect cost collection plan.

STATUTORY AUTHORITY: Sections 24-60-601 and 23-1-108 (10), C.R.S.

REQUEST: Through Request R4, the Department proposed a further reduction to the program in FY 2021-22 and a gradual program phase-out.

RECOMMENDATION: Staff recommends the request as reflected in the table below.

COLORADO COMMISSION ON HIGHER EDUCATION AND HIGHER EDUCATION SPECIAL PURPOSE PROGRAMS, SPECIAL PURPOSE, WICHE - OPTOMETRY TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $376,600 $0 $0 $376,600 $0 0.0 TOTAL $376,600 $0 $0 $376,600 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $376,600 $0 $0 $376,600 $0 0.0 R4 Wind down professional student (126,025) 0 0 (126,025) 0 0.0 exchange program TOTAL $250,575 $0 $0 $250,575 $0 0.0

INCREASE/(DECREASE) ($126,025) $0 $0 ($126,025) $0 0.0 Percentage Change (33.5%) 0.0% 0.0% (33.5%) 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $250,575 $0 $0 $250,575 $0 0.0 Request Above/(Below) Recommendation $0 $0 $0 $0 $0 0.0

DISTRIBUTION TO THE HIGHER EDUCATION COMPETITIVE RESEARCH AUTHORITY

The Higher Education Competitive Research Authority is created in Section 23-19.7-102, C.R.S. The authority is overseen by a board comprised of the presidents or designees of the research institutions and a Governor appointee. Its role is to provide matching funds for federal research grants.

The Authority was initially supported by waste tire fees and more recently by Limited Gaming Funds. Senate Bill 13-133 provided for a limited gaming funds transfer of $2,100,000 at the end of FY 2012- 13 and subsequent years. This has been the sole source of revenue in recent years. Due to steep declines in limited gaming revenues, the JBC sponsored and the General Assembly adopted legislation to suspend allocations to this program that are received in FY 2020-21 (based on FY 2019-20 limited gaming revenue) and FY 2021-22 (based on FY 2020-21 limited gaming revenue). Under current law, gaming allocations to the program will resume in FY 2022-23.

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Although new funding was suspended for two years, the program has continued to spend from its considerable existing reserves on both prior and new commitments. The table below reflects calendar year revenues and disbursements in 2020 to provide matching funds for various grants at the research institutions. Disbursements for projects are typically spread over two to six years. While the grants funded vary from year to year, the table below (the most recent provided to staff) demonstrates the types of activities supported. Staff notes that the program significantly increased disbursements after the sharp decline in state revenues in 2020 and is therefore spending down its sizeable fund balance.

COLORADO HIGHER EDUCATION COMPETITIVE RESEARCH AUTHORITY SUMMARY OF FINANCIAL ACTIVITY - CALENDAR YEAR 2020 PREPARED FOR JANUARY 2021 2020

Balance Available January 1 $6,082,092

Revenues

Limited Gaming Funds 0 Interest earnings 77,388 Total Revenues 77,388

Disbursements Colorado State University ARPA Egrant 101,033 IAC Extension to Underserved Areas 87,756

Colorado School of Mines Engineering Research Center - Reinventing Urban Water Infrastructure 800,000 IACMI Advanced Composites Manufacturing Innovation 100,000 REMADE - Clean Energy Manufacturing Institute 66,435 MRI - 2019 MSF 170,000

University of Colorado - Boulder QLCI-CI - Quantum Leap Challenge Institute for Enhanced Sensing Using Quantum States 400,000 NSF Science and Technology Center on Real-Time Function Imaging (STROBE) award notification (5 payments of $400,000) 400,000 5 payments of $400,000 MRI: NSF HS LEIS and STED 330,000

University of Northern Colorado

Total Disbursements $2,455,224

Balance Available at December 31 3,704,256

STATUTORY AUTHORITY: Section 23-19.7-102, C.R.S.

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REQUEST: The Department requests a continuation level of funding of $2,000,000 cash funds for this line item.

RECOMMENDATION: Staff recommends the Department’s request for a continuation of $2,000,000 cash funds spending authority.

VETERINARY SCHOOL CAPITAL OUTLAY

This line represents cash funds and state funds for capital outlay associated with CSU's veterinary medicine program consistent with the provisions of 23-31-118 (2), C.R.S. The funding split is based on the ratio of resident students to non-resident students in the veterinary medicine program. Statute requires that a fee of $1,001 be assessed to all non-resident and WICHE students. The state appropriation covers this cost-component for resident students, and states participating in the WICHE agreement cover this cost-component for their students. The funds are used for the purchase and replacement of equipment used in the education of veterinary students, with about half ($496.98 per student) used for capital equipment for use of veterinary students and the balance used for capital construction funding directly related to the veterinary medicine program.

The State’s contribution is shown as reappropriated funds from indirect cost recoveries, but this represents indirect cost recoveries that offset General Fund otherwise required. (The appropriation is not included in the Department’s pool of recoverable costs.) The balance of the appropriation is shown for informational purposes and represents CSU’s collections from non-resident and WICHE students. The cash funds do not pass through the state accounting system.

STATUTORY AUTHORITY: Sections 23-31-118(2), C.R.S.

REQUEST: The Department requests a continuation level of funding of $285,000 total funds for this line item, including $134,232 from indirect cost recoveries.

RECOMMENDATION: Staff recommends the request for $285,000. Funding sources are based on the ratio of resident to non-resident students in the program: reported to be 281 residents, 229 nonresidents, and 57 WICHE students. Thus, the resident share is 49.6 percent of the total and the state share should be $141,360 and the remainder (cash funds) should be $143,640. Staff has included a related adjustment.

COLORADO GEOLOGICAL SURVEY AT THE COLORADO SCHOOL OF MINES

Pursuant to H.B. 12-1355 and H.B. 13-1057 and an MOU between the Department of Natural Resources and the Colorado School of Mines, the Colorado Geological Survey (CGS), excluding the Avalanche Information Center, was transferred to the Colorado School of Mines in mid-FY 2012-13.

The transfer was accompanied by budget cuts. The budget for the CGS at the Department of Natural Resources prior to transfer was $4.5 million, including $2.3 million from the Operational Account of the Severance Tax Trust Fund. As part of the transfer, overall appropriations from the Operational Account of the Severance Tax Trust Fund were reduced by 42 percent ($908,000). The JBC subsequently added $300,000 General Fund to the appropriation to retain some functions that were

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not included in the original transfer plans, and additional $105,494 General Fund and 1.0 FTE was added in FY 2015-16 to help maintain hazard mitigation services.

The CGS is the only entity funded from "Tier I" of the Operational Account of the Severance Tax Trust Fund that is not within the Department of Natural Resources.

Most State funding provided for the Survey is for Geologic Hazard mitigation, consistent with an MOU between the school of Mines and the Department of Natural Resources when the CGS was transferred. However, the General Fund provided by the General Assembly has allowed the Division to retain a nucleus of activities in a broader range of areas.

• land use reviews, funded through fees paid by local governments (new subdivision proposals and new school locations must be reviewed by CGS for geologic hazards); • other geologic hazard work supported with Severance tax (e.g., identifying areas of natural geologic hazards, providing related technical assistance to state and local governments, creating guidelines for land use in natural hazard areas); • surface mapping activities, which are closely related to and integrated with the geologic hazard work and are supported with both Severance tax and federal funds. • groundwater activities, including mapping, reporting, and technical assistance and advisory work for state and local governments (1.0 FTE supported with General Fund). • energy and minerals activities, including mapping and reporting on mineral deposits and energy resources, as well as reporting on the status of the energy industry. This includes projects related to geothermal energy and carbon sequestration (1.5 FTE total for energy and minerals activities supported with General Fund). The Oil and Gas Commission in the Department of Natural Resources is now doing this work internally for oil and gas deposits. The CGS continues to do some work in this area for other minerals.

The CGS is expected to bring in additional matching funds to augment the state support provided. The move to the Colorado School of Mines was expected to facilitate growth of such outside funding opportunities.

STATUTORY AUTHORITY: Sections 23-41-201 through 210, C.R.S.

REQUEST: The Department of Higher Education requests a continuation of $2,729,100 total funds and 15.5 FTE, including $567,208 from the General Fund and $1,627,932 from the Operational Account of the Severance Tax Trust Fund, among other sources.

RECOMMENDATION: The staff recommendation is reflected below. As discussed previously in this packet, the recommendation eliminates cash and reappropriated funds shown for informational purposes, leaving General Fund and Severance Tax amounts in the line item, and adds a 2.5 percent inflationary adjustment from the General Fund.

COLORADO COMMISSION ON HIGHER EDUCATION AND HIGHER EDUCATION SPECIAL PURPOSE PROGRAMS, SPECIAL PURPOSE, COLORADO GEOLOGICAL SURVEY AT THE COLORADO SCHOOL OF MINES TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION

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COLORADO COMMISSION ON HIGHER EDUCATION AND HIGHER EDUCATION SPECIAL PURPOSE PROGRAMS, SPECIAL PURPOSE, COLORADO GEOLOGICAL SURVEY AT THE COLORADO SCHOOL OF MINES TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE FY 2020-21 Appropriation $2,729,100 $567,208 $1,803,031 $51,958 $306,903 15.5 TOTAL $2,729,100 $567,208 $1,803,031 $51,958 $306,903 15.5

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $2,729,100 $567,208 $1,803,031 $51,958 $306,903 15.5 Colorado Geological Survey (479,082) 54,878 (175,099) (51,958) (306,903) 0.0 TOTAL $2,250,018 $622,086 1,627,932 $0 $0 15.5

INCREASE/(DECREASE) ($479,082) $54,878 ($175,099) ($51,958) ($306,903) 0.0 Percentage Change (17.6%) 9.7% (9.7%) (100.0%) (100.0%) (19.4%)

FY 2021-22 EXECUTIVE REQUEST $2,729,100 $567,208 $1,803,031 $51,958 $306,903 15.5 Request Above/(Below) Recommendation $479,082 ($54,878) $175,099 $51,958 $306,903 3.0

INSTITUTE OF CANNABIS RESEARCH AT CSU-PUEBLO

Senate Bill 16-191 authorized the General Assembly to appropriate money from the Marijuana Tax Cash Fund (MTCF) to the Board of Governors of the Colorado State University System (CSU) to fund scientific and social science research at CSU-Pueblo concerning marijuana and other matters that impact the state and its regions. The appropriation was initially provided at the $900,000 level and was increased to $1,800,000 MTCF in FY 2017-18. House Bill 19-1311 (Institute of Cannabis Research Role and Mission by Singer/Bridges made changes to the program. The changes include, among others, creating a new 9-member board to oversee the program, approve the budget, and oversee grant awards through an open process.

CSU reported that in 2019, the institute supported 16 research projects led by 20 CSU-Pueblo faculty and staff, and employed five staff directly. CSU-P consults with the Department of Public Health and Environment to avoid any funding overlap. Studies have explored issues such as the effects of medicinal cannabinoids on seizures in those with epilepsy, a study of use of industrial hemp fibers as reinforcing agents, and study for an enhanced method for extracting cannabinol from cannabis leaves and flowers using pressurized liquid extraction. The Institute also hosts conferences and a journal, the Journal of Cannabis Research, launched in partnership with Springer Nature.

During the 2020 legislative session, in response to budget constraints, the JBC reduced the budget for the Institute to $1,000,000 cash funds from the MTCF. Staff anticipated that this would eliminate most of the state funding for institute-sponsored research, while leaving the core institute structure and staffing in place.

STATUTORY AUTHORITY: Sections 23-31.5-112, C.R.S.

REQUEST: The Department of Higher Education requests continuation of $1,000,000 cash funds from the Marijuana Tax Cash Fund.

RECOMMENDATION: As previously discussed, staff recommends restoring funding for the program to $1,800,000 cash funds from the Marijuana Tax Cash Fund.

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GEAR UP

PROGRAM BACKGROUND: The federally-funded GEAR UP program places full-time advisors in more than two dozen middle and high schools across the state. The goal is to help students, who are typically first in their family to attend college, to become college-ready. Advisors recruit roughly 100 students per grade level, starting with eighth-graders, and work with them throughout middle and high school. Middle-school students may begin with ‘early remediation’ courses (remedial courses that would be required to begin college work if they were college-age) in order to demonstrate that they are college ready. Older students participate in dual enrollment courses that earn college credits while they are in high school in order to build students’ confidence and save them money and time in college. They also take CLEP exams (e.g., in Spanish) to demonstrate proficiency and earn college credit. GEAR UP students graduate high school having earned an average of 17 college credits. These are far more likely to graduate from high school and pursue and persist in college than their peers. The program reports that 87 percent graduate from high school, 84 percent enroll in college in the fall after high school graduation, and 81 percent persist through their first year of college.

The program was moved to the Department of Higher Education in FY 2012-13 and a line item to show full federal funding was added in FY 2014-15

FEDERAL GRANT: In FY 2018-19, Colorado received a fourth seven-year GEAR UP grant for $5,000,000 per year. This funding will be available through FY 2024-25. Fifty percent of the total ($2.5 million) is allocated to scholarship/tuition assistance to GEAR UP participants, while the balance primarily supports the salaries of the GEAR UP student advisors, including pre-collegiate advisors, college advisors, and management and support staff.

REQUEST: The Department requests of $5,000,108 federal funds and 29.1 FTE shown for informational purposes, including annualization of S.B. 20-200 (PERA).

RECOMMENDATION: Staff recommends $5,000,000 federal funds and 29.1 FTE shown for informational purposes. Staff notes that any increases and decreases, including related to common policy for staff compensation, will be absorbed within the fixed base grant amount. Since this line item is shown for informational purposes, the staff recommendation is simply to maintain the current $5.0 million appropriation. Actual expenditures vary from year to year, but this amount is consistent with the overall federal grant award.

PROSECUTION FELLOWSHIP PROGRAM

Senate Bill 14-174, amended by S.B. 15-043, created the Prosecution Fellowship Program. Through state funding appropriated to the Department of Higher Education, the Colorado District Attorney's Council (CDAC) oversees and facilitate the placement of six recent graduates from the state's two major law schools, the University of Colorado at Boulder and the University of Denver, into one year prosecution fellowships in rural jurisdictions around the state. Fellows receive an intensive trial advocacy course from CDAC over the summer before placement in the community in September.

The fellowships were filled beginning in FY 2015-16, and CDAC has reported that the program is achieving its goals of providing prosecution work experience for law school graduates and assisting understaffed rural prosecutor's office

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In response to budget constraints, the Joint Budget Committee eliminated funding for the program for FY 2020-21.

STATUTORY AUTHORITY: Sections 23-19.3-101 and 102, C.R.S.

REQUEST: The Department requested $0 funding for the program, reflecting a continuation of JBC action for FY 2020-21. However, in response to JBC staff questions, it indicated that this was an error and the funds should be restored in FY 2021-22.

RECOMMENDATION: Staff recommends restoring $356,496 General Fund, based on JBC action in FY 2020-21 indicating that funding for this program was being eliminated on a temporary basis only.

RURAL TEACHER RECRUITMENT, RETENTION, AND PROFESSIONAL DEVELOPMENT

Senate Bill 16-104 (Incentives to Build Number of Rural Teachers) created several new programs to provide incentives for individuals to become teachers in rural school districts, and to support the needs of professional educators in rural school districts. The bill included statutory authorization and funding for:

• a rural education coordinator ($145,000); • financial stipends for student teachers who agree to teach in rural areas ($112,000), • support for teacher cadet programs to support high school students interested in pursuing teaching careers in rural schools ($50,000); • funds for national board certification, concurrent enrollment certification, and other professional development for rural teachers ($120,000; increased under S.B. 18-085 to $360,000); and • support to the Department of Higher Education to oversee these programs.

The University of Northern Colorado was selected as the host institution after a statewide RFP competition. UNC has created a new Center for Rural Education. The Community College System has directed the teacher cadet expansion into the rural regions of the state.

Senate Bill 18-085 added stipends for additional teachers to pursue concurrent enrollment educator qualifications and National Board teacher certification.

Senate Bill 20-158 modified the program funding structure to combine it with Rural Teaching Fellowships program and allocate any grant funds remaining after the fellowships so that 50.0 percent is available for rural teachers pursuing alternative licensure, 25.0 percent is student teachers who agree to teach in rural areas, and 25.0 percent is for the various continuing education stipends for existing teachers.

STATUTORY AUTHORITY: Sections 23-76-101 through 106, C.R.S.

REQUEST: The Department requests $709,373 General Fund and 0.8 FTE for this program. The request includes an adjustment for S.B. 18-200 (PERA) but no other changes in its formal request. However, the Department informally reported that the line item should be reduced by $145,000, based

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on the Department/OSPB’s recommendation not to continue funding for the rural education coordinator program.

RECOMMENDATION: The staff recommendation is included in the table below. The recommendation does not annualize funding for the rural education coordinator, as the reduction seemed to be based solely on revenue constraints which have become less severe. Further staff recommends higher overall program funding for stipends to retain funding at a level similar to that in FY 2020-21, when additional resources were available from funds rolled forward from prior years. The recommendation also reflects Committee common policy on the S.B. 18-200 (PERA) annualization.

COLORADO COMMISSION ON HIGHER EDUCATION AND HIGHER EDUCATION SPECIAL PURPOSE PROGRAMS, SPECIAL PURPOSE, RURAL TEACHER RECRUITMENT, RETENTION, AND PROFESSIONAL DEVELOPMENT TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $709,354 $709,354 $0 $0 $0 0.8 TOTAL $709,354 $709,354 $0 $0 $0 0.8

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $709,354 $709,354 $0 $0 $0 0.8 Annualize prior year budget actions 500,000 500,000 0 0 0 0.0 Annualize prior year legislation 3 3 0 0 0 0.0 TOTAL $1,209,357 $1,209,357 $0 $0 $0 0.8

INCREASE/(DECREASE) $500,003 $500,003 $0 $0 $0 0.0 Percentage Change 70.5% 70.5% 0.0% 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $709,373 $709,373 $0 $0 $0 0.8 Request Above/(Below) Recommendation ($499,984) ($499,984) $0 $0 $0 0.0

OPEN EDUCATIONAL RESOURCES INITIATIVES

House Bill 18-1331 created the Colorado Open Educational Resources (OER) Council and grant program in the Department of Higher Education (DHE). Open educational resources are high-quality teaching, learning, and research resources that reside in the public domain or have been released under an intellectual property license that permits their free use and repurposing by others. Establishes requirements for appointments to the Council by the Executive Director of DHE and the Commissioner of Education. Council responsibilities include:

• Recommending statewide policies for promoting adaptation, creation, and use of OER at Colorado public institutions of higher education; • Facilitating professional development and sharing of knowledge about OER; • Implementing the OER grant program that is created in the bill; and • Submitting an annual report to the Colorado Commission on Higher Education and the General Assembly on the use of OER and the impact of the grant program.

The OER grant program provides grants to public institutions of higher education to promote the use of OER at the institutions and to faculty and staff, individually or in groups, to create and adapt open

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educational resources. The bill also directs the Colorado Commission on Higher Education to adopt guidelines to require public institutions of higher education to ensure that, beginning in the fall of 2021, students are informed prior to course registration concerning which courses and sections use OER or other low-cost materials. Provides a General Fund appropriation of $660,000 and 0.9 FTE for FY 2018-19 that was expected to increase to $1,160,877 for FY 2019-20 and a similar amount in FY 2020-21. The Council and grant program are repealed effective November 1, 2021.

STATUTORY AUTHORITY: Section 23-4.5-101 et. seq., C.R.S.

REQUEST: The Department’s R7 request was for $100,838 and 1.0 FTE for FY 2021-22. As statutory authority for the program is ending, the Department requested that the Committee sponsor new legislation to reauthorize the program. However, it proposed only enough funding to maintain the existing staff position and did not request any grant funding for the program.

RECOMMENDATION: As discussed earlier in the packet, staff does not recommend any funding in the Long Bill for this program, as the statutory authority for the program expires early in FY 2021-22. However, staff recommends that the Committee sponsor legislation to reauthorize the program and that this legislation includes sufficient funding to provide grants and not merely funds for a Department staff position. . FOREST RESTORATION AND WILDFIRE RISK MITIGATION GRANT PROGRAM CASH FUND

The Forest Restoration and Wildfire Risk Mitigation Grant Program Cash Fund supports Colorado State Forest Service cost-share grants for local community groups, government entities, public or private utilities, state agencies, and nonprofits for projects to reduce the risk to people and property in the wildland-urban interface. [Section 23-31-310, C.R.S.]

This fund also receives annual transfers of Severance Tax funds (Tier 2/Natural Resources and Energy Grant Program Distributions of up to $1,050,000). Previously, the program was only supported through these statutory transfers, but changes included in H.B. 19-1006 made it possible to appropriate to this fund through the Long Bill. The program received a one-time appropriation in H.B. 19-1006. The Joint Budget Committee recommended retaining the appropriation, rather than eliminating it, in FY 2020-21 and indicated that its intent was that this funding would be ongoing.

STATUTORY AUTHORITY: Section 23-31-310, C.R.S.

REQUEST: The request is for a continuing appropriation of $1,000,000 General Fund.

RECOMMENDATION: Staff recommends the request to continue $1,000,000 General Fund for this program. In addition, a staff recommendation in the Department of Natural Resources figure setting would add $7,000,000 million General Fund in this line item and $2,000,000 million in a new Healthy Forests and Vibrant Communities Cash Fund line item. This recommendation for additional funding for both line items is pending a JBC decision.

Background on the Colorado State Forest Service: The Colorado State Forest Service is a service and outreach agency of Colorado State University which works with a wide range of stakeholders (federal, state,

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nonprofit, and local governments, and individual landowners) “to achieve stewardship of Colorado’s diverse forest environments for the benefit of present and future generations.” In February 2021, the agency reported the following budget.

COLORADO STATE FOREST SERVICE BUDGET (STATE AND NON-STATE SOURCES) -

FY 2020 FY 2021 ACTUAL PERCENTAGE ESTIMATED PERCENT AGE Revenue State General Fund through CSU line item (“part of the CSU system’s “specialty education” funding) $3,838,870 23% $3,685,315 24% General Fund appropriations to FRWRM 1,000,000 6% 1,000,000 State Severance Tax Transfers to FRWRM and HFVC Funds 2,355,000 14% 942,970 6% Federal Grants 6,252,762 37% 6,125,916 39% Self-funded Operations and Other 3,267,879 20% 3,754,737 24% Total $16,714,511 $15,508,938

Expenditures Personal Services 8,117,626 52% 8,018,779 61% Operating Expenses 4,689,420 30% 3,693,329 28% Grants to Others 2,813,481 18% 1,033,994 8% Payments to other Agencies 47,565 0% 155,398 1% Capital/equipment -2928 0% 150,835 1% Total $15,665,164 $13,052,335

FY 2020 FY 2021 Estimated Estimated State General Fund 47 FTE 44.5 FTE State Severance Tax Transfers (Healthy Forests & Vibrant Communities) 10.8 FTE 10.6 FTE Federal Grants 44.18 FTE 47.42 FTE Self-Generated Funds and Other 20.17 FTE 18.74 FTE Total FTE 122.15 FTE 121.3 FTE 1This excludes amounts that are used by the CSU System for CSFS staff benefits and indirect costs. (approximately $1.6 million).

Severance Tax Transfers As noted above, statute provides this fund with a $1.05 million transfer from Severance Tier 2 funds and also provides a $1.305 transfer for the Health Forests and Vibrant Communities Cash Fund, but only when Tier 2 Severance funding is available. No such funding is expected in FY 2021-22. The instability of Severance Tax has been a significant challenge for the program.

COLORADO STUDENT LEADERS INSTITUTE

The Colorado Student Leaders Institute is a competitive residential summer academic program for students who are entering tenth or eleventh grade in the coming fall semester. The institute operates at the University of Colorado at Denver for four weeks each summer during which time participating students attend college level classes ( and enrichment activities. The program is overseen by an eleven- member board, appointed by the Governor and confirmed by the Senate, which is responsible for selecting students for the program. The program was created as a pilot in the Lieutenant Governor’s Office in 2015 and moved to the Department of Higher Education in FY 2017-18. The program was reauthorized during the 2019 session through S.B. 19-137 and the appropriation structure modified to provide a direct General Fund appropriation.

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STATUTORY AUTHORITY: Section 23-77-101 through 106, C.R.S.

REQUEST: Department request R6 proposed eliminating funding for this program. The Department requested that the Committee sponsor legislation to facilitate this.

RECOMMENDATION: Staff recommends a continuation-level of appropriation of $218,825 General Fund and 1.0 FTE for FY 2021-22. Eliminating funding, as requested, will require statutory change and cannot be accomplished through the Long Bill alone. Furthermore, staff does not recommend that the Committee pursue legislation to eliminate the program at this time.

EDUCATOR LOAN FORGIVENESS PROGRAM

S.B. 19-003 modified and extended an older program which had not been funded in many years. Under the new Educator Loan Forgiveness Program, eligible educators, including teachers, principals, and special service providers serving in a hard-to-staff position in a rural school district or content shortage area, is eligible to receive up to $5,000 in loan forgiveness for each year of employment in a qualified position, for up to five years. The Colorado Commission on Higher Education (CCHE) was required to approve up to 100 educators per year for participation in the program. If more than 100 applications were received, CCHE was required to prioritize applicants who have contracted for a qualified position in a rural school and in a content shortage area, followed by those who had contracted for a qualified position in a rural school, and finally those who had contracted for a qualified position in a content shortage area. The program repeals September 1, 2033.

In response to staff questions in February 2020, the Department reported that after passage of S.B. 19-003, it hired a program coordinator to administer the program, created an application process, guidelines, and program policy. The program closed for applications on February 21st having received over 2500 inquiries and 500 submitted applications. However, due to unexpected budget shortfalls associated with the COVID-19 pandemic, loan forgiveness funding was eliminated in FY 2019-20, and funding for the associated staff position was eliminated in FY 2020-21.

STATUTORY AUTHORITY: Section 23-3.9-101 through 104, C.R.S.

REQUEST: Department Request R9 proposes to restore funding for this program with an appropriation of $2,898,963 General Fund and 0.5 FTE.

RECOMMENDATION: As discussed previously in this packet, staff does not recommend restoring funding for this program. In light of the scale of demand for the program, only a fraction of those who qualify and apply will ever receive funding from the program and the program will only be able to award funds based on a lottery. Staff does not believe a substantial state benefit of this type should be awarded based on a lottery.

FINANCIAL AID ASSESSMENT TOOL

H.B. 19-1196 (Financial Aid for Students with In-State Tuition; Gonzales-Gutierrez/Moreno) extended access to state financial aid for a subset of undocumented students who met the requirements for receiving in-state tuition at state higher education institutions. These students, known as ASSET (Advancing Students for a Stronger Tomorrow) students, are not eligible for federal

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financial aid and therefore do not complete the federal Free Application for Federal Student Aid (FAFSA). However, since these students will now be eligible for state financial aid, the State must ensure there is a consistent method used for determining these students’ financial need.

Funds were added on a supplemental basis in FY 2019-20 to enable the state to purchase a software solution that provides an on-line FAFSA-like tool that ASSET students can use to assess their eligibility for financial aid. The tool performs the same needs-analysis as the FAFSA methodology. Costs include a 0.5 FTE to manage the system (in collaboration with the vendors) and serve as a liaison to the higher education institutions and students.

From the beginning, costs for the new system were paid by the higher education institutions. Funds added in FY 2019-20 annualized in FY 2020-21 to reflect ongoing (as opposed to start-up) costs associated with the new tool. Beginning in FY 2021-22, ongoing costs have been incorporated in the Department’s regular indirect cost assessment process.

STATUTORY AUTHORITY: Sections and 23-7-110 and 23-3.3-101 et. seq., and C.R.S.

REQUEST: The request is for a continuation amount of $154,069 reappropriated funds.

RECOMMENDATION: Staff recommends the request for a continuation amount of $154,069 reappropriated funds. The funding source for this line item will now be indirect cost recoveries.

TEACHER MENTOR GRANTS

Senate Bill 19-190 created the Teacher Mentor Grant Program in the Department to provide money to partnering local education providers and educator preparation programs to provide training and stipends for teachers who serve as mentors for teacher candidates participating in clinical practice. The Department established the grant application, review, and award procedures and collaborated with the Department of Education to create a new mentor endorsement through the State Board of Education, which was adopted in November 2019. However, due to budget shortfalls, the program grant funding was eliminated in FY 2019-20, and funding for the associated staff position was eliminated in FY 2020-21.

This bill also required that the Department to research best practice in educator preparation programs, adopt guidelines in collaboration with the Department of Education by January 1, 2020, and prepare a report, to assist educator preparation programs in adopting and implementing best practice. This was implemented.

STATUTORY AUTHORITY: Section 23-78-105, C.R.S.

REQUEST: The Department did not request funding for this program for FY 2021-22.

RECOMMENDATION: Staff recommends partially restoring funding for the program FY 2021-22, as reflected in the table below.

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COLORADO COMMISSION ON HIGHER EDUCATION AND HIGHER EDUCATION SPECIAL PURPOSE PROGRAMS, SPECIAL PURPOSE, GROWING GREAT TEACHERS - TEACHER MENTOR GRANTS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $0 $0 $0 $0 $0 0.0 TOTAL $0 $0 $0 $0 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $0 $0 $0 $0 $0 0.0 Restore Teacher Mentor Grants 548,477 548,477 0 0 0 0.5 TOTAL $548,477 $548,477 $0 $0 $0 0.5

INCREASE/(DECREASE) $548,477 $548,477 $0 $0 $0 0.5 Percentage Change 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Request Above/(Below) Recommendation ($548,477) ($548,477) $0 $0 $0 (0.5)

RISE EDUCATION INNOVATION FUND

REQUEST: The Executive Branch request that the JBC sponsor new legislation that would allow for the appropriation of $10,000,000 General Fund for RISE Education Innovation Fund grants for higher education.

RECOMMENDATION: Staff does not recommend an appropriation for this program in the Long Bill, as new authorizing legislation would be required for the program if the General Assembly wishes to pursue this.

(D) LEASE-PURCHASE PAYMENTS AND CAPITAL-RELATED OUTLAYS

UNIVERSITY OF COLORADO, LEASE PURCHASE OF ACADEMIC FACILITIES AT FITZSIMONS

The General Assembly authorized the State to enter into a lease purchase agreement for the University of Colorado Health Sciences Center at Fitzsimons pursuant to H.B. 03-1256. The bill authorized an agreement for up to twenty-five years, with the total amount of the agreement not to exceed $202,876,109 plus administrative, monitoring, closing costs and interests. The bill further specified that annual aggregate rentals authorized would not exceed $15,100,000.

The General Assembly further authorized use of up to $8,000,000 per year of Tobacco Master Settlement revenues for this purpose in Section 23-20-136 (3.5), C.R.S. The annual amount is based on total tobacco settlement funds received and the statutory allocation of the funds. These funds are deposited to the Fitzsimons Trust Fund.

This line item was moved from the capital construction section of the Long Bill to the operating section in FY 2015-16.

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STATUTORY AUTHORITY: Sections 23-20-136 (3.5), C.R.S., and H.B. 03-1256.

REQUEST: The Department requests $14,156,976 total funds for FY 2021-22, including $7,617,736 from the General Fund and $6,539,240 tobacco settlement funds.

RECOMMENDATION: While staff recommends the same total funding as the request, as reflected in the table below, staff recommends a $400,000 fund split adjustment, increasing the General Fund by $400,000 and reducing the Tobacco Settlement amount, based on the FY 2021-22 forecast for tobacco settlement revenue to $6,100,000.

COLORADO COMMISSION ON HIGHER EDUCATION AND HIGHER EDUCATION SPECIAL PURPOSE PROGRAMS, LEASE PURCHASE PAYMENTS AND CAPITAL-RELATED OUTLAYS, UNIVERSITY OF COLORADO, LEASE PURCHASE OF ACADEMIC FACILITIES AT FITZSIMONS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $14,153,707 $7,653,707 $6,500,000 $0 $0 0.0 TOTAL $14,153,707 $7,653,707 $6,500,000 $0 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $14,153,707 $7,653,707 $6,500,000 $0 $0 0.0 Lease purchase payment adjustments 3,269 403,269 (400,000) 0 0 0.0 TOTAL $14,156,976 $8,056,976 $6,100,000 $0 $0 0.0

INCREASE/(DECREASE) $3,269 $403,269 ($400,000) $0 $0 0.0 Percentage Change 0.0% 5.3% (6.2%) 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $14,156,976 $7,617,736 $6,539,240 $0 $0 0.0 Request Above/(Below) Recommendation $0 ($439,240) $439,240 $0 $0 0.0

APPROPRIATION TO THE HIGHER EDUCATION FEDERAL MINERAL LEASE REVENUES FUND

This line item is used to appropriate General Fund into the Higher Education Federal Mineral Lease (FML) Revenues Fund (revenues fund). Once in the revenues fund, the money ii subject to annual reappropriation for the Lease Purchase of Academic Facilities Pursuant to Section 23-19.9-102, C.R.S.

BACKGROUND: The revenues fund was created to support lease-purchase (certificate of participation /COP) payments for higher education capital construction projects authorized in 2008. Created in Section 23-19.9-102, C.R.S., the fund receives the "spillover" (amounts that exceed caps) from other funds that receive statutory allocations of FML revenue, as well as 50 percent of FML bonus revenues.

In most recent years, FML revenues deposited to the revenues fund have not been sufficient to cover required COP payments, and the General Assembly has appropriated General Fund to make up the difference.

The Master Indenture for the COPs states that “payment of Rent and all other payments by the State under the Leases shall constitute currently appropriated expenditures of the State and shall be paid solely from the Higher Education Federal Mineral Lease Revenues Fund and any moneys in the

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Higher Education Institutions Lease Purchase Cash Fund.” (This second fund receives institutional contributions.) The Indenture also specifies that if FML revenues are insufficient, the State may deposit General Fund into the revenues fund to make up the difference.

In light of this, all moneys to be used for the COP payments, including General Fund, are deposited to the revenues fund. This line item is included in the Long Bill to make the necessary General Fund deposit. The amount appropriated in this line item is then reappropriated in the subsequent line item (Lease Purchase of Academic Facilities Pursuant to Section 23-19.9-102, C.R.S.) for payment of the COPs.

STATUTORY AUTHORITY: Section 23-19.9-102, C.R.S.

REQUEST: The Department requests a continuation of $17,072,238 General Fund.

RECOMMENDATION: The staff recommendation is for $17,432,238 General Fund. The amount included is based on the difference between the COP payments due in 2021-22 and FML revenues available (none). Note that staff bases the amount of revenues available on the amounts currently available in the Higher Education Revenues Cash Fund less annual obligations to be paid, rather than relying on an FML revenues forecast.

LEASE PURCHASE OF ACADEMIC FACILITIES PURSUANT TO SECTION 23-19.9-102, C.R.S.

In 2008, the General Assembly authorized the State to enter into lease-purchase agreements (certificates of participation/COPs) to fund capital construction projects for state-supported institutions of higher education. The General Assembly anticipated significant increases in federal mineral lease (FML) revenue due to natural gas leases on the Roan Plateau and, in light of this, modified the formula allocation for FML revenue to direct a portion to support the new COPs. The Higher Education FML Revenues Fund (revenues fund), created in Section 23-19.9-102, C.R.S., receives the "spillover" (amounts that exceed caps) from other funds that receive statutory allocations of FML revenue plus 50 percent of all FML bonus revenue. Amounts in this fund are subject to annual appropriation for the higher education COP payments.

Through S.B. 08-233 and H.J.R 08-1042, the General Assembly authorized COP payments to fund 17 projects for higher education academic buildings. Funding was ultimately sufficient to fund the first 12 projects, with some additional controlled maintenance projects authorized through H.B. 12-1357 using unspent COP proceeds. Pursuant to Section 23-1-106.3 (1)(b)(IV), C.R.S. the anticipated annual state-funded payments for the principal and interest components under all lease purchase agreements on the projects is not to exceed an average of $16,200,000 per year for the first ten years of payment and is not to exceed $16,800,000 for the second ten years of payment. Payments will end in FY 2027- 28. Although the General Assembly anticipated funding would be provided through the FML revenues fund, this revenue stream has been extremely inconsistent, and General Fund backfill has thus been required to make the COP payments in many years.

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During the 2016 legislative session, the JBC sponsored H.B. 16-1229 to make some changes to the funding structure for the COP payments. This bill:

• Transferred the amount in the former Higher Education FML Reserve Fund ($7.6 million) into the revenues fund upon enactment. Of this amount $1.9 million was used to help cover FY 2015- 16 COP payments and address a shortfall in the fund, while the balance of $5.7 million was available for appropriation in FY 2016-17. • Eliminated the Higher Education FML Reserve Fund and directed 50 percent of FML bonus revenue that would previously have been deposited to the reserve fund into the revenues fund. This was expected to add about $1.0 million per year in FML money to the revenues fund. • Clarified that appropriations for higher education COPs are made to the Department of Higher Education for transfer to the State Treasurer. Amounts transferred to the Treasurer are continuously appropriated to the Treasurer for purposes of making related payments.

The chart below summarizes the flow of FML revenue used for these Higher Education COP payments including the changes in H.B. 16-1229.

STATUTORY AUTHORITY: Sections 23-1-106.3, 23-19.9-101 and 102, and 34-63-102, C.R.S.

REQUEST: The Department requested $17,432,238 total funds, including $17,072,238 reappropriated funds from General Fund appropriated in the line item above.

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RECOMMENDATION: The staff recommendation is reflected in the table below.

COLORADO COMMISSION ON HIGHER EDUCATION AND HIGHER EDUCATION SPECIAL PURPOSE PROGRAMS, LEASE PURCHASE PAYMENTS AND CAPITAL-RELATED OUTLAYS, LEASE PURCHASE OF ACADEMIC FACILITIES PURSUANT TO SECTION 23-19.9-102 TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $17,433,244 $0 $500,000 $16,933,244 $0 0.0 TOTAL $17,433,244 $0 $500,000 $16,933,244 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $17,433,244 $0 $500,000 $16,933,244 $0 0.0 Lease purchase payment adjustments (1,006) 0 (500,000) 498,994 0 0.0 TOTAL $17,432,238 $0 $0 $17,432,238 $0 0.0

INCREASE/(DECREASE) ($1,006) $0 ($500,000) $498,994 $0 0.0 Percentage Change (0.0%) 0.0% (100.0%) 2.9% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $17,432,238 $0 $360,000 $17,072,238 $0 0.0 Request Above/(Below) Recommendation $0 $0 $360,000 ($360,000) $0 0.0

ANNUAL DEPRECIATION-LEASE EQUIVALENT PAYMENT

Senate Bill 15-211, as amended by S.B. 16-020, created a process to annually set aside an amount equal to the calculated depreciation of a capital asset funded through the capital construction section of the Long Bill. Beginning with projects funded in the 2015 Long Bill, the bill established three set-asid e mechanisms based on how a project is funded. • For projects funded from a cash fund, the state agency annually credits an amount equal to the recorded depreciation to a capital reserve account in the cash fund. • For projects funded from the General Fund, the Capital Construction Fund, or the Controlled Maintenance Trust Fund, the General Assembly is required to include an annual deprecation-lease equivalent payment line item payable from the General Fund in the operating section of the Long Bill for each state agency, including the Department of Higher Education. Amounts in this line item are credited to the Capital Construction Fund, except that an amount equal to one percent of the project cost is deducted from the payment and credited to the Controlled Maintenance Trust Fund. • If the project is funded through a financing arrangement, such as a lease-purchase payment, the General Assembly must include an annual controlled maintenance line item payable from the General Fund equal to one percent of the project cost. • If a project is funded from more than one cash fund or from a cash fund and from state funds, the set-aside amounts are shared proportionately between the various fund sources. The set-aside amounts may be appropriated for future capital expenses such as routine maintenance, equipment replacement, or the construction of a new building.

The program took effect for capital construction projects first funded in FY 2015-16 from the date of acquisition or the date of completion of the project. Fiscal year FY 2018-19 was the first year in which a depreciation-lease equivalent payment has been required within the Department of Higher

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Education. Because higher education institutions receive a large share of total state capital construction appropriations, this line item is expected to grow significantly over time.

For FY 2020-21, the JBC sponsored H.B. 20-1398 to suspend this program for one year. Under current law, it takes effect again in FY 2021-22.

STATUTORY AUTHORITY: Section 24-30-1310, C.R.S.

REQUEST: The Department requested no appropriation for this line item, based on the Executive Branch request (NP2 in this department) that the Committee sponsor legislation to further delay restoration of this funding mechanism for capital construction.

RECOMMENDATION: Because current law requires this program, staff recommends including funding for this program in the Long Bill. If the General Assembly adopts separate legislation to suspend funding for this program in FY 2021-22, that legislation will include an appropriation clause that eliminates the appropriation in the Long Bill.

COLORADO COMMISSION ON HIGHER EDUCATION AND HIGHER EDUCATION SPECIAL PURPOSE PROGRAMS, LEASE PURCHASE PAYMENTS AND CAPITAL-RELATED OUTLAYS, ANNUAL DEPRECIATION- LEASE EQUIVALENT PAYMENT TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $0 $0 $0 $0 $0 0.0 TOTAL $0 $0 $0 $0 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $0 $0 $0 $0 $0 0.0 Annualize prior year legislation 4,689,433 4,689,433 0 0 0 0.0 NP2 Extend pause annual depreciation lease payment 0 0 0 0 0.0 TOTAL $4,689,433 $4,689,433 $0 $0 $0 0.0

INCREASE/(DECREASE) $4,689,433 $4,689,433 $0 $0 $0 0.0 Percentage Change 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $1 $1 $0 $0 $0 0.0 Request Above/(Below) Recommendation ($4,689,432) ($4,689,432) $0 $0 $0 0.0

(E) TUITION/ENROLLMENT CONTINGENCY

This line item provides spending authority that CCHE may transfer to any of the governing boards in the event that enrollment increased above projected levels, resulting in greater revenue and expenditures than expected. It is included because the cash fund appropriations to the governing boards in the Long Bill represent a cap on higher education expenditures.

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After a five-year hiatus, tuition was again appropriated in FY 2016-17. In light of this, the line item was reinstated in FY 2016-17. If tuition expenditures reach the appropriation cap and there is no contingency, schools could be forced to stop enrolling additional students because they would not have sufficient spending authority to serve the additional students.

Staff anticipates that annual tuition appropriations to each governing board will be "trued up" each year through late supplemental action (a Long Bill add-on). Nonetheless, (1) there will still be some variance between supplemental appropriations and final institutional spending, due to late student decisions and summer sessions; and (2) in some years, some institutions may experience extraordinary enrollment adjustments due to macro-economic factors. Under such circumstances these institutions could approach their annual spending cap before a late supplemental is adopted.

STATUTORY AUTHORITY: Section 23-1-104(b), C.R.S., authorizes the General Assembly to appropriate tuition.

REQUEST: The Department requested a continuation level of appropriation for this line item.

RECOMMENDATION: Staff recommends a continuing appropriation of $60,000,000 cash funds (tuition spending authority) for this line item for FY 2020-21. This represents less than 3.0 percent of total appropriations for tuition spending authority. Staff also recommends continuing the footnote that explains the purpose of the line item and a footnote requesting data on how it is used.

(F) INDIRECT COST ASSESSMENTS

This line item was added in FY 2020-21. All indirect cost assessments are reflected in this line item, and the total is then reappropriated in Department Administration and other sections and line items, offsetting General Fund otherwise required.

STATUTORY AUTHORITY: Section 23-1-105(8), C.R.S.

REQUEST: The November 1, 2020 request included a continuation amount, but the Department submitted an updated calculation in February 2021, consistent with the usual timeframe for submitting this data.

RECOMMENDATION: The staff recommendation, discussed earlier in this packet, is reflected below.

COLORADO COMMISSION ON HIGHER EDUCATION AND HIGHER EDUCATION SPECIAL PURPOSE PROGRAMS, INDIRECT COST ASSESSMENTS, INDIRECT COST ASSESSMENTS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $7,272,391 $0 $353,154 $6,813,388 $105,849 0.0 TOTAL $7,272,391 $0 $353,154 $6,813,388 $105,849 0.0

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COLORADO COMMISSION ON HIGHER EDUCATION AND HIGHER EDUCATION SPECIAL PURPOSE PROGRAMS, INDIRECT COST ASSESSMENTS, INDIRECT COST ASSESSMENTS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $7,272,391 $0 $353,154 $6,813,388 $105,849 0.0 Indirect cost adjustments 89,118 0 (2,396) 102,403 (10,889) 0.0 TOTAL $7,361,509 $0 $350,758 $6,915,791 $94,960 0.0

INCREASE/(DECREASE) $89,118 $0 ($2,396) $102,403 ($10,889) 0.0 Percentage Change 1.2% 0.0% (0.7%) 1.5% (10.3%) 0.0%

FY 2021-22 EXECUTIVE REQUEST $7,272,391 $0 $353,154 $6,813,388 $105,849 0.0 Request Above/(Below) Recommendation ($89,118) $0 $2,396 ($102,403) $10,889 0.0

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(3) COLORADO COMMISSION ON HIGHER EDUCATION FINANCIAL AID

This section includes all appropriations for financial aid in the Higher Education budget. This includes appropriations for need based aid, work study, merit based aid, and various special purpose programs. Financial aid is represents about 20 percent of the Department of Higher Education’s General Fund budget. The table below summarizes the recommended changes to the Division appropriation for FY 2021-22.

COLORADO COMMISSION ON HIGHER EDUCATION FINANCIAL AID TOTAL GENERAL CASH REAPPROPRIATED FEDERAL

FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 Appropriation FY 2020-21 Appropriation $215,640,219 $214,320,698 $0 $1,319,521 $0 0.0 TOTAL $215,640,219 $214,320,698 $0 $1,319,521 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $215,640,219 $214,320,698 $0 $1,319,521 $0 0.0 R1 State operating funding for public higher education 0 0 0 0 0 0.0 Inflationary adjustment for institutions 4,707,701 4,707,701 0 0 0 0.0 Tuition buy down at access institutions 2,757,618 2,757,618 0 0 0 0.0 R3 Fort Lewis Native American tuition waiver 2,254,481 2,254,481 0 0 0 0.0 Other 0 0 0 0 0 0.0 Indirect cost adjustments 0 430,927 0 (430,927) 0 0.0 TOTAL $225,360,019 $224,471,425 $0 $888,594 $0 0.0

INCREASE/(DECREASE) $9,719,800 $10,150,727 $0 ($430,927) $0 0.0 Percentage Change 4.5% 4.7% 0.0% (32.7%) 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $218,529,815 $217,210,294 $0 $1,319,521 $0 1.0 Request Above/(Below) Recommendation ($6,830,204) ($7,261,131) $0 $430,927 $0 1.0

ADDITIONAL PROGRAM BACKGROUND

Of state appropriations for higher education in FY 2020-21, $215.6 million total funds, including $214.3 million General Fund, is for financial aid. In recent years financial aid has been about 20.0 percent of state higher education General Fund appropriations, although FY 2020-21 was an exception due to reductions in other program funding.

State financial aid: For most of the financial aid programs, the General Assembly appropriates state financial aid funds to the Colorado Commission on Higher Education, which allocates them to institutions, including to some private institutions, based on formulas that consider financial need at the schools, total student enrollment, student retention, and program eligibility criteria. A total of 72,922 students received state-supported financial aid in FY 2019-20. The average state need-based award was $2,556 and the average state work-study award was $2,940.

There have been significant financial aid increases in recent years, including $19.1 million (10.7 percent) in FY 2018-19 and $23.4 million (11.9 percent) in FY 2019-20. Although appropriations for

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the governing boards were cut sharply in FY 2020-21, financial aid remained largely intact. Nonetheless, overall demand for aid continues to outstrip available funding. In FY 2001-02, total state financial aid disbursements equaled 26.8 percent of resident tuition revenue at state institutions; for FY 2019-20 this figure was 16.9 percent.

Statutory Guidance on State Financial Aid Funding: Section 23-3.3-103, C.R.S. requires that the annual appropriations for student financial assistance (need-based, merit-based, work-study, and assistance to national guard members and to dependents of deceased or disabled national guard members and first-responders), and the Colorado Opportunity Scholarship Initiative, increase, in total, by at least the same percentage as the aggregate percentage increase of all General Fund appropriations to institutions of higher education.

Student Need and Other Sources of Support: Most sources of student financial aid are not reflected in the state budget. Yet even when these other funding sources are included, financial aid support is far less than the cost of higher education. The following chart compares grants and loans awarded in FY 2019- 20 to full-time resident undergraduate students with financial need (calculated based on federal formulas) and the average cost of attendance for a resident student at various institutions. The average cost of attendance includes the cost of room, board, transportation, and learning materials, in addition to tuition and fees. Depending on the institution, these other costs of attendance may dwarf the price of tuition. The total cost of attendance for a resident student in FY 2019-20 ranged from $17,424 at Aims Community College to $37,920 at the Colorado School of Mines.

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*This shortfall may be addressed by the student by reducing their out-of-pocket costs, e.g., by living with family or in less expensive accommodation than the cost of attendance formula calculates, by additional earned income or savings, or by private unsubsidized loans taken out by the student or family.

Federal Grants: The largest source of need-based aid is the federal government. The federal Pell grant program provided up to $6,195 per eligible student in FY 2019-20, with an average grant of $3,852 in Colorado. Among undergraduate resident students attending Colorado state institutions of higher education, 31.3 percent qualified for the Pell grant in FY 2019-20.

Institutional Grants: Of the aid granted at public institutions to resident undergraduates with need in FY 2019-20, $170.8 million (27.1 percent) was from institutional awards.

Federal Student Loans: In order to fill the gap between cost of attendance and available grant funds, students typically rely on student loans. In addition to grant funds, the federal government provides guaranteed loans and tax credits and deductions for tuition.

• Of students completing a bachelor’s degree from a public institution, 50.7 percent graduated with federal student loan debt in FY 2019-20, and the average debt at graduation for these students was $26,289. • For students completing an associate’s degree, the average federal student loan debt at graduation ranged from $8,347 to $15,169 in FY 2019-20. In FY 2018-19, the Department reported that approximately 42.0 percent of students completing an associate’s degree from a public institution graduate with federal student debt.

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Other Sources: There is a substantial gap between the calculated cost of attendance for students with need and known sources of student support. A portion of this gap may be filled with additional unsubsidized student or family loans, which are not included in these figures.

Program Administration: The state financial aid structure is built around the federal financial aid structure. It nonetheless gives institutions a high level of autonomy in managing their financial aid programs. State financial aid statutes, in Article 3.3, 3.5, and 3.7 of Title 23 generally date back to 1977 or 1979 and provides little guidance around program structure. Historically, the Colorado Commission on Higher Education established state financial aid policies. However, in 2010, the General Assembly adopted changes in S.B. 10-003 specifying that “each state institution shall administer a financial assistance program according to the policies and procedures established by the governing board of the institution” (Section 23-3.3-102 (3), C.R.S. As a result, the Department now allocates funds among the governing boards, but the governing boards are able to adopt their own administrative policies.

Because institutions must comply with federal rules to obtain federal need-based financial aid for their students, they still all follow certain procedures and comply with certain reporting requirements. For example, any student applying for federal financial aid, whether a grant or loan, must complete the “FAFSA” or free application for federal student assistance., a detailed questionnaire that considers a family’s income and size, number of students attending college, and various other factors to identify an amount that the student’s household should be able to contribute to the student’s higher education. This is the “expected family contribution”. Some public higher education institutions may ask students and families to complete an additional questionnaire to determine if the family has other assets that may help cover a student’s educational costs, even if the FAFSA indicates that the student is eligible for financial aid. Students not eligible for federal financial aid who are eligible for state financial based on living and graduating from a Colorado high school complete a FAFSA-like application.

The Colorado Department of Higher Education distributes funds to the higher education institutions based on the number of students eligible for the federal Pell grant at each institution. Institutions predominantly use the state funds to support students on the lower-end of the income range (particularly students who are eligible for the Pell grant but not the full Pell grant). However, they may also choose to use the state funds to serve students higher up the income scale, so long as the student has a gap between the calculated cost of attendance and the student’s expected family contribution. For resident full-time students with need in FY 2017-18, 12 percent of state grant funds for full-time resident students were directed to students who did not qualify for the Pell grant but who qualified as having need.

Higher Education Affordability: Because institutions “package” both institutional and state financial aid following their own policies, it can be difficult to predict what any particular student will pay at any particular higher education institution. At state public institutions, approximately 60 percent of all students receive need-based aid, with the percentage is as high as 94 percent at some institutions; approximately 42 percent receive merit based aid, with as many as 82 percent receiving aid at some institutions. A student with the same economic profile may receive a different level of funding at the same institution depending upon factors such as when he or she applies.

The charts below are built to show the affordability of college for students from families with various percentages of the median family income. They assume families with incomes above 200 percent of

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the poverty level will be able to save a portion of their income for college, that students will work 500 hours per year, and that “affordable” debt is debt that can be paid by the student by paying ten percent of their income for ten years after college. Anything above that is considered unaffordable. While a viewer may differ with (and choose to adjust) some assumptions, the approach makes it easier to visualize how affordable college is or is not.

The model is active, and viewers may adjust it at: https://college-affordability.css.uwb.edu/

The line in the middle of the model represents tuition. The top of the rectangle represents costs associated with the full cost of attendance. While some of the data in the model could be refined, it provides a useful tool for understanding some of the financial barriers students face before and after college.

As shown:

• As of 2016, tuition was consistently covered by grants for students at all types of institutions who were eligible for a full Pell grant. This was still true in FY 2017-18 at all institutions except the Colorado School of Mines. However, grant aid did not cover the full cost of attendance for these students.

• Families with incomes below the median family income of $86,000 are likely to face unaffordable debt at all types of institutions in the State if the student is not living with his or her family.

• Students who attend comprehensive regional institutions may face larger financial challenges than students who attend research institutions, which have more resources to subsidize students at the lower end of the income scale. This burden is likely to fall most heavily on students in the middle-low income range whose income is too high for a full Pell grant.

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The snapshots above are built on the following data and assumptions (Lumina benchmarks) • Median Colorado family income of $85,920; • Students considered “dependent” on their families but living away from home; • Families saving 10 percent of discretionary income (amounts over 200 percent of poverty) for ten years; • Students working 500 hours per year during college; • “Affordable” debt consisting of student paying 10 percent of his/her post-college income for ten years; • Students assumed to earn 20 percent of the median income in the years post-college ($24,080 for a student completing a 2-year degree to $32,510 for a student completing a 4-year degree at a research institution).

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DECISION ITEMS – COLORADO COMMISSION ON HIGHER EDUCATION FINANCIAL AID

 R3 FORT LEWIS NATIVE AM ERICAN TUITION WAIVER

REQUEST: As part of the November 2020 budget request, the Department submitted a request for an increase of $2,889,596 General Fund for the Fort Lewis College Native American Tuition Waiver. Funding is made one year in arrears. Thus, the FY 2021-22 request is based on the FY 2020-21 estimate.

RECOMMENDATION: The staff recommendation for R3 is for an increase of $2,254,481 General Fund, for a total $24,045,076 General Fund. The recommendation is based on an updated projection from Fort Lewis received in February 2021 and represents a decrease of $635,115 General Fund from the original request. The recommendation includes the adjustments in this line item, consistent with past practice.

• To comply with a federal treaty and the contract that granted the Fort Lewis property to the state in 1911, Section 23-52-105, C.R.S. requires that the General Assembly appropriate funds to cover 100 percent of the cost of tuition for qualified Native Americans who wish to attend Fort Lewis College. The college waives tuition for these students up front, and then receives reimbursement in the following fiscal year.

• Consistent with past practice, the staff recommendation is based on the projected current year (FY 2020-21) Native American Tuition Waiver cost. The lower staff figure is based on revised estimates provided (as in prior years) in February. Each year’s appropriation is based on the prior year’s actual experience, including a “true up” component. Thus, the FY 2021-22 request is based on the FY 2020-21 actual to-date plus an estimated figure for 2021 summer enrollment and a “true-up” for the final FY 2019-20 actual enrollment.

• The state's obligation to waive tuition for Native Americans has been challenged and upheld in court. In 1971, Colorado passed legislation requiring Native American students at Fort Lewis who came from outside Colorado to pay tuition, while resident Native American students would be admitted free of charge. The federal government brought suit against the State, resulting in an injunction requiring that tuition be waived for all Native American students. The 1972 District Court ruling against the State was subsequently upheld by the federal Court of Appeals.

ADDITIONAL BACKGROUND AND ANALYSIS: History of the Fort Lewis Native American Tuition Waiver: In 1882, the federal government set aside Fort Lewis in Hesperus for an Indian reservation school. The school remained in operation after the lands composing the reservation were released to the public domain. In 1910, the federal government included the property in a land grant to the State subject to the condition that “said lands and buildings shall be held and maintained by the State of Colorado as an institution of learning, and that Indian pupils shall at all times be admitted to such school free of charge for tuition and on terms of equality with white pupils.” The General Assembly accepted the land grant in 1911 with the condition. Fort Lewis College moved to Durango in 1956, but the State continued to uphold the terms of the original grant. In 1970, Colorado sought to limit the waiver to Colorado residents. The federal government

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and Indian students brought suit. In 1973, the Tenth Circuit Court of Appeals affirmed the federal district court decision in favor of the government and the Indian students (Tahdooahnippah v.Thinnig).

Fort Lewis College Student Population: In FY 2019-20, 41.9 percent of the school’s population was Native American, with most of these (37.3 percent of the total school population) non-resident Native American students. For these non-resident students, the State pays the full “sticker price” for non- resident tuition. For the last decade, the population served at Fort Lewis has declined, but the share of the population comprised of non-resident, Native American students has increased. As a result, the State now provides more than 2/3rd of the Fort Lewis College operating budget, based on FY 2019-20 data, once all state financial aid is included. This is substantially more than for any other school, including the other small institutions.

FORT LEWIS COLLEGE FUNDING SOURCES

ACTUAL TOTAL GOVERNING NATIVE OTHER STATE PERCENTAG AFTER FUND BOARD AMERICAN FINANCIAL AID E OF SOURCE EXPENDITURE TUITION FOR STUDENTS AT COLLEGE ADJUSTMENT S (BUDGET WAIVER FLC BUDGET S DATA BOOK)

Resident tuition total $9,265,006 ($1,048,785) ($1,806,224) $6,409,997 11.7% Nonresident tuition 31,085,188 (20,520,324) 0 10,564,864 19.2%

IC Recoveries, fees, other 472,169 0 472,169 0.8% State General Fund 14,136,436 21,569,109 $1,806,224 37,511,769 68.3% Total 54,958,799 0 0 54,958,799 100.00%

• Currently 95.5 percent of costs for the Native American Tuition Waiver are due to costs associated with non-resident students. For FY 2020-21 (used for the FY 2021-22 request), funding requested includes $1.1 million for resident students and $22.9 million for non-resident Native American students.

FY 2019-20 FY 2020-21 Change Actual Estimate* Enrollment Resident Native American Student FTE 133 138.4 5.4 Nonresident Native American SFTE 1,075 1,200.9 125.9 Total 1,208 1,339.3 131.3

Tuition Waiver Cost Resident Native American Student FTE $1,048,785 $1,091,174 $42,389 Nonresident Native American SFTE 20,520,324 22,923,146 2,402,822 Total $21,569,109 $24,014,320 $2,445,211 *SFTE figures represent JBC staff estimates. Excludes adjustments for prior years that are part of the FY 2021-22 appropriation request.

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• In response to staff questions, Fort Lewis indicates that, of the non-resident students, approximately 64.5 percent are from tribes with historical connections to Colorado.

The table below shows the long-term trend for the waiver. As shown, after years of large increases, the waiver amount declined in FY 2017-18 (after the College temporarily tightened enrollment standards) and included a modest increase for FY 2018-19, but costs have since increased sharply.

FORT LEWIS NATIVE AMERICAN TUITION WAIVER APPROPRIATIONS/RECOMMENDATION CHANGE OVER GENERAL PRIOR PERCENTAGE FUND YEAR INCREASE FY 2011-12 $11,785,002 $1,354,631 13.0% FY 2012-13 $12,773,557 $988,555 8.4% FY 2013-14 $14,466,230 $1,692,673 13.3% FY 2014-15 $14,841,981 $375,751 2.6% FY 2015-16 $16,157,618 $1,315,637 8.9% FY 2016-17 $17,364,248 $1,206,630 7.5% FY 2017-18 $16,948,194 ($416,054) (2.4%) FY 2018-19 $17,024,859 $76,665 0.5% FY 2019-20 $19,626,044 $2,601,185 15.3% FY 2020-21 $21,790,595 $2,164,551 11.0% FY 2021-22 $24,045,076 $2,254,481 10.3%

Most recent increases have been driven by increases in enrollment of nonresident students, although the JBC also agreed to a 5.0 percent increase in nonresident tuition in FY 2018-19 which contributed to the FY 2019-20 cost increase. In the last few years Fort Lewis College has also launched graduate programs which are contributing to enrollment growth and waiver costs.

Staff anticipates that the College will avoid nonresident student tuition increases, given the impact on the General Fund budget. Fort Lewis has argued that the college should be treated no differently from other state higher education institutions in the Long Bill but is aware that the State now pays 2/3rds of its nonresident tuition.

• Every 1.0 percent increase in nonresident tuition will drive a General Fund increase of $229,231 for Native American Tuition Waiver payments in the subsequent fiscal year excluding any change in enrollment.

• Whether or not tuition rates increase, enrollment drives increases. Nonresident Native American enrollment has been increasing at an average annual rate of 10.4 percent since FY 2017-18.

• The average tuition cost for each of the 1,075 nonresident Native American students enrolled in Fort Lewis College in FY 2019-20, including summer enrollment, was $19,089 per student.

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• Fort Lewis College’s overall enrollment has declined over the last fifteen years. The only population that has grown has been nonresident Native American students.

• President Stritikus of Fort Lewis College sent a letter to the Committee dated February 16, 2021 providing a status update on the College’s efforts to secure federal funding. The letter notes that that “…we should be proud that we live in a state that understands the moral, ethical, and legal dimensions of [the waiver program]” but recognizes that “given the national scope of the waiver program, there is a case to made that federal support is justified.” The College spent $1.3 million in previous years in an effort to obtain federal support for the waiver. The effort was unsuccessful in part because it was opposed by the American Indian Higher Education Council, which represents Tribal Colleges and Universities. President Stritikus explains recent developments, including that the College has received permission to work directly with the State’s public affairs partner in Washington to assist in exploring federal possibilities.

• Staff notes that the General Assembly has memorialized Congress in the past about the waiver and could do so again.

 ALLOCATION OF FINANCIAL AID, INCLUDING TO PRIVATE INSTITUTIONS

The Colorado Commission on Higher Education allocates financial aid appropriations from the General Assembly. While most state funding for higher education is distributed to public institutions

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only, state financial aid--like federal financial aid--is also distributed to private not-for-profit and even for-profit institutions. As described, above, the Department allocates funds to public institutions based on their share of Pell-eligible students, with higher amounts per student based on their retention over time. The Department reports:

• The private nonprofit institutions are treated the same way in the allocation process as the public institutions, receiving different amounts of funding each year based on the number of Pell-eligible students they served in the prior actual year. • In contrast, the limited subset of eligible proprietary schools receive an increase to their allocation that is aligned with the overall increase in funding for state need based aid. The institutions must meet various requirements (operated in Colorado and successfully administered federal campus- based aid programs, meet accreditation standards, submit an application). The Department indicates that its process makes an effort to ensure that the participating schools are “good players”.

Private nonprofit and proprietary schools must comply with Department guidelines in administering the aid. These guidelines are designed to align with federal financial aid program requirements. The total allocations are shown in the table below.

During budget balancing, staff presented recommendations and options that included eliminating funding for the for-profit institutions as options for eliminating funding for the non-profits and graduate education programs based on statewide budget constraints. The JBC did not pursue those.

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Colorado Commission on Higher Education FY 2020-21 Financial Aid Allocations UG Need Grad Need Work-Study CTE TOTAL State Public Institutions Adams State University 2,192,023 - 451,522 - 2,643,546 Colorado Mesa University 8,107,383 15,899 981,736 4,648 9,109,667 Colorado School of Mines 1,664,050 544,093 509,691 - 2,717,833 CSU System 17,642,236 1,507,380 3,183,382 22,332,998 Colorado State University 13,200,570 1,427,453 2,313,550 - 16,941,573 Colorado State University - Pueblo 4,441,666 79,927 869,832 - 5,391,424 Fort Lewis College 1,452,632 - 353,591 - 1,806,224 Metropolitan State University of Denver 20,958,120 59,101 2,708,394 - 23,725,616 CU System 32,104,524 7,369,358 3,995,403 - 43,469,285 University of Colorado Boulder 11,073,632 711,616 2,005,880 - 13,791,127 University of Colorado Colorado Springs 9,179,750 241,917 883,751 - 10,305,417 University of Colorado Denver 11,851,142 6,415,826 1,105,773 - 19,372,741 University of Northern Colorado 7,644,014 364,884 1,282,609 - 9,291,507 Western State Colorado University 1,270,889 8,300 281,161 - 1,560,350 Community College System (13 institutions) 43,751,650 64,401 6,634,883 370,077 50,821,011

Local District Colleges Aims Community College 3,802,342 - 405,166 20,865 4,228,373 Colorado Mountain College 2,150,720 - 189,928 16,639 2,357,287

Area Technical Colleges 3 Institutions $1,426,375 $0 $96,980 $37,768 $1,561,123 Subtotal - Public Institutions 144,166,958 9,933,416 21,074,449 449,997 175,624,820

Private Not-for-Profit Institutions Colorado Christian University $2,276,002 $8,825 $250,214 $0 $2,535,041 Colorado College 154,113 - 157,050 - 311,163 Naropa University 133,193 - 33,026 - 166,219 Regis University 2,337,903 1,408,744 541,133 - 4,287,780 University of Denver 1,513,060 233,619 539,077 - 2,285,757 Subtotal - Private Not-for-Profit $6,414,270 $1,651,188 $1,520,500 $0 $9,585,958

Private For Profit Insitutions Colorado Technical Univ $226,373 $0 $0 $0 $226,373 ConCorde Career Inst 278,283 0 0 0 278,283 International Bty 71,825 0 0 0 71,825 IBMC 80,284 0 0 0 80,284 Rocky Mtn Col A&D 104,384 0 117,119 0 221,503 Subtotal - Private For Profit $761,148 $0 $117,119 $0 $878,266 Total - FY 2020-21 $151,342,376 $11,584,604 $22,712,068 $449,997 $186,089,045

 DEPARTMENT LEGISLATIVE PROPOSAL FOR THE DEPENDENT TUITION ASSISTANCE PROGRAM [REQUEST FOR LEGISLATION]

REQUEST: On February 25, 2021 the Department provided staff with information on a legislative proposal to add restrictions to the Dependent Tuition Assistance Program. In light of the timing of the request, staff is not providing a recommendation on the proposal at this time but is bringing it to the Committee’s attention.

Background: The Dependent Tuition Assistance Program, authorized in Section 23-3.3-204 and 23-3.3- 205, C.R.S., pays tuition, room, and board for Colorado dependents of deceased or permanently disabled members of the National Guard, law enforcement, firefighters, prisoners of war and military personnel missing in action. Pursuant to Section 23-3.3-202, C.R.S. this is the first priority of any state

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financial aid funds. If the appropriation in this line is insufficient to cover costs, CCHE must use money appropriated in other financial aid line items for this purpose.

Qualified dependents are eligible to pursue an undergraduate education leading to a first baccalaureate degree or a certificate of completion. The educational benefits provided vary depending upon the type of school a student attends. Students attending a public in-state institution of higher education receive free tuition, and if the institution has on-campus living, the room and board (half of double- occupancy) is also included. Students attending private in-state institutions receive the average cost of undergraduate instruction calculated for student at a comparable public institution. Students attending an out-of-state institution receive tuition assistance only, up to the average cost of undergraduate tuition at a comparable Colorado state institution.

The FY 2020-21 appropriation, which included a staff-initiated increase, is $956,000. The Department indicates that it expects actual FY 2020-21 expenditures to be $1,176,000 .

Program costs have grown due to tuition and room and board cost increases and as more students and families have become aware of the program. Excess program expenditures are taken “off the top” of Need Based Aid appropriations.

Department Proposal: The Department seeks legislation that would make the following changes:

• Amend C.R.S. Sections 23-3.3-204 and 205 to require that at the time of their initial application students must demonstrate they have an Expected Family Contribution (EFC) of no more than 250% of a Pell-eligible EFC.

• Amend C.R.S. Section 23-3.3-205 to limit eligibility to the dependents of law enforcement officers and firefighters who served and were killed or permanently occupationally disabled while serving in Colorado.

The Department indicates that adopting these changes could reduce expenditures by approximately half when fully implemented.

It is not clear to staff to what extent these savings would be due to the first part of the proposal (making the program means-tested) or the second part of the proposal (ensuring that the program is restricted to the dependents of individuals who were killed or disabled while serving in Colorado).

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LINE ITEM DETAIL – COLORADO COMMISSION ON HIGHER EDUCATION FINANCIAL AID

(A) NEED BASED GRANTS

This line item includes grants for full-time and part-time graduate and undergraduate students with demonstrated financial need attending eligible institutions in Colorado, which include some private institutions.

Determining Need: Financial need is determined by the formula of [cost of attendance] – [estimated family contribution] = need. The federal Pell grant formula determines the estimated family contribution and is the amount the family is expected to contribute before any aid (including low interest subsidized federal loans) can be offered. The State Auditor’s Office confirms that need-based aid, including both state and federal need-based aid, has been authorized consistent with this formula.

Allocations to Institutions: Pursuant to Section 23-3.3-102, C.R.S., CCHE is responsible for determining the allocation of financial aid among the institutions. However, public institutions are authorized to administer their financial assistance program according to policies and procedures established by their governing boards. According to CCHE, some public institutions’ need-based aid policies authorize use of state-funded need based aid for individuals with estimated family contribution of up to 150 percent of Pell-grant eligibility.

The CCHE’s current formula for allocating need-based aid is based on the number of Pell-eligible individuals at each institution. It provides an increasing level of funding depending upon whether the student is a freshman, sophomore, junior, etc. The formula is designed to incentivize institutions in their efforts to retain students. In FY 2018-19, the program served 57,346 students with an average award of $2,308.

STATUTORY AUTHORITY: Section 23-3.3-501, C.R.S.

REQUEST: The Department requests a continuation amount of $163,314,446 General Fund.

RECOMMENDATION: The staff recommendation is reflected in the table below and incorporates increases associated with the staff recommendation for increases in support for the governing boards. In addition, the staff recommendation adjusts reappropriated funds from indirect cost collections to offset General Fund otherwise required in this line item. The fund split adjustment has no impact on program administration.

COLORADO COMMISSION ON HIGHER EDUCATION FINANCIAL AID, NEED BASED GRANTS, NEED BASED GRANTS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $163,314,446 $161,994,925 $0 $1,319,521 $0 0.0 TOTAL $163,314,446 $161,994,925 $0 $1,319,521 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $163,314,446 $161,994,925 $0 $1,319,521 $0 0.0

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COLORADO COMMISSION ON HIGHER EDUCATION FINANCIAL AID, NEED BASED GRANTS, NEED BASED GRANTS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE Inflationary adjustment for institutions 4,707,701 4,707,701 0 0 0 0.0 Tuition buy down at access institutions 2,757,618 2,757,618 0 0 0 0.0 R1 State operating funding for public higher education 0 0 0 0 0 0.0 Indirect cost adjustments 0 430,927 0 (430,927) 0 0.0 TOTAL $170,779,765 $169,891,171 $0 $888,594 $0 0.0

INCREASE/(DECREASE) $7,465,319 $7,896,246 $0 ($430,927) $0 0.0 Percentage Change 4.6% 4.9% 0.0% (32.7%) 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $163,314,446 $161,994,925 $0 $1,319,521 $0 0.0 Request Above/(Below) Recommendation ($7,465,319) ($7,896,246) $0 $430,927 $0 0.0

(B) WORK STUDY

Work Study allows resident undergraduates to earn money to help pay for college. Students with financial need as well as students who can benefit from work experience are eligible, but statutes require that at least 70 percent of the funds be awarded based on need. Students may work at state- funded educational institutions, non-profit organizations, or government agencies.

The Department has indicated in the past that students receiving work study have better achievement and retention rates than both students who don't work and students who find work on their own, speculating that work study creates a sense of investment, while the regulated hours and locations ensure that employment doesn't interfere with study. In FY 2018-19, the program served 8,281 students with an average amount of $2,888 per student.

STATUTORY AUTHORITY: Section 23-3.3-401, C.R.S.

REQUEST: The Department requests a continuation amount of $23,413,178 for this line item.

RECOMMENDATION: Staff recommends the Department's request for continuation funding of $23,413,178 General Fund.

(C) MERIT BASED GRANTS

Prior to FY 2009-10 merit based grants provided awards to both undergraduate and graduate students attending eligible institutions in Colorado, which include some private institutions. The awards were used to recognize and encourage outstanding achievement in academic and other talent areas. In FY 2009-10 funding was eliminated to address the budget shortfall. It was restored in S.B. 14-001 but again eliminated in FY 2020-21 due to statewide revenue shortfalls associated with the COVID-19 pandemic.

STATUTORY AUTHORITY: Section 23-3.3-501, C.R.S.

REQUEST: The Department did not request funding for this line item.

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RECOMMENDATION: Staff does not recommend an appropriation for this line item.

(D) SPECIAL PURPOSE

VETERANS'/LAW ENFORCEMENT/POW TUITION ASSISTANCE

This line item pays tuition, room, and board for Colorado dependents of deceased or permanently disabled members of the National Guard, law enforcement, firefighters, prisoners of war and military personnel missing in action. Pursuant to Section 23-3.3-202, C.R.S. this is the first priority of any state financial aid funds. If the appropriation in this line is insufficient to cover costs, CCHE must use money appropriated in other financial aid line items for this purpose.

Qualified dependents are eligible to pursue an undergraduate education leading to a first baccalaureate degree or a certificate of completion. The educational benefits provided vary depending upon the type of school a student attends. Students attending a public in-state institution of higher education receive free tuition, and if the institution has on-campus living, the room and board (half of double- occupancy) is also included. Students attending private in-state institutions receive the average cost of undergraduate instruction calculated for student at a comparable public institution. Students attending an out-of-state institution receive tuition assistance only, up to the average cost of undergraduate tuition at a comparable Colorado state institution.

STATUTORY AUTHORITY: Section 23-3.3-204 and 23-3.3-205, C.R.S.

REQUEST: The Department requests a continuation of $956,000 General Fund for this line item. The Department is also seeking a statutory change to add additional limitations to the program. It indicates that it estimates that FY 2020-21 program costs will be $1,176,000 for 77 students.

RECOMMENDATION: Staff recommends a continuation of $956,000 General Fund. The line item has been difficult to project due to the relatively small number of students who receive the benefit. If there is no related legislative action that reduces program costs, staff anticipates that the Department will request an appropriation adjustment for FY 2022-23.

Pursuant to the current interpretation of Section 23-3.3-102 (7), C.R.S., a funding shortfall of up to 10 percent may be addressed via transfers from other financial aid programs. (Transfers from money rolled forward in the work-study line item addressed shortfalls in prior years.) When the difference exceeded 10 percent in prior years, additional transfers have been authorized through the Governor’s transfer authority (for like-purposes, up to $5.0 million; Section 24-75-108, C.R.S.).

NATIVE AMERICAN STUDENTS/FORT LEWIS COLLEGE

To comply with a federal treaty and the contract that granted the Fort Lewis property to the state in 1911, Section 23-52-105, C.R.S. requires that the General Assembly appropriate funds to cover 100 percent of the cost of tuition for qualified Native Americans who wish to attend Fort Lewis College. The college waives tuition for these students up front, and then receives reimbursement in the following fiscal year.

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STATUTORY AUTHORITY: Section 23-42-105, C.R.S.

REQUEST: The Department requests an appropriation of $21,790,595 General Fund for this line item, including an increase for request R3.

RECOMMENDATION: The staff recommendation is summarized in the table below and reflects updated data from Fort Lewis for request R3, as discussed at the beginning of this division.

COLLEGE OPPORTUNITY SCHOLARSHIP INITIATIVE (COSI)

The College Opportunity Scholarship Initiative promotes public/private partnerships to fund scholarships and support services for gifted low-income students who might not otherwise pursue or complete higher education. Created in H.B. 14-1384, it was initially seeded with a transfer of $33.4 million from the CollegeInvest Financial Need Scholarship Fund and a $1.0 million appropriation. In FY 2015-16 and FY 2016-17, the General Assembly appropriated $5.0 million General Fund to the COSI Fund, from which the Department has continuous spending authority. In FY 2018-19, the Long Bill appropriation was increased to $7.0 million. Senate Bill 20-006 modified the program to allow greater program flexibility. The appropriation was reduced by $1.0 million in FY 2020-21 to assist in addressing the state budget shortfall related to the COVID-19 pandemic.

• Student Support Services: Funds may be awarded to state agencies and nonprofit organizations to assist such agencies and organizations with ensuring that student-success and precollegiate, postsecondary student support services are available to students who are classified as Colorado residents for tuition purposes; increasing the capacity for student support services at postsecondary institutions; and developing connections between local employers, public schools, precollegiate organizations, and postsecondary institutions.

• Administration: Up to 7.5 percent of amounts expended in the prior fiscal year may be used for direct and indirect administrative costs. Allows for a larger amount to be used for administration if authorized in any fiscal year by a footnote in the Long Bill.

• Scholarships: Moneys not used for the purposes above must be used to build a financial corpus capable of providing tuition assistance to eligible Colorado students attending eligible Colorado higher education institutions. Such assistance may include direct awards; matching incentives to create or increase other scholarships; loans, or any combination of these.

• Eligible Students: To the extent practicable, tuition assistance must be awarded to students representing rural and urban areas and students attending all types of higher education institutions (vocational schools, community colleges, 4-year institutions, research institutions). Also, to the extent practicable, tuition assistance must be evenly distributed between students with an expected family contribution (EFC) of less than 100 percent of the annual federal PELL grant award and students with an EFC between 100% and 250% of the annual federal PELL grant award.

The program has an advisory board comprised of the executive committee of the State Workforce Development Council, and three Governor appointees to represent research institutions, four-year postsecondary institutions and community colleges and area vocational schools. It requires this board to establish:

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• eligibility for state agencies, nonprofit organizations, and public institutions of higher education to participate in the initiative; • criteria for eligibility of students to apply for and receive grants from the initiative; and • rules establishing permissible uses of grant and scholarship moneys from the initiative.

The program provides several different kinds of grants, described below.

Community Partner Program (CPP) Grants: Consistent with the legislation, the program funds community partner grants for student support programs operated by non-profits, K-12 and higher education institutions with pre-collegiate, collegiate, and bridge programs to support student participation and success in higher education.

• For programs at the K-12 level, the program supports a ‘future center” model. This program is a collaborative approach between partner organizations and/or a school district that is embedded in a school’s counseling department. The hub serves all students at the school with curriculum and activities that address career and college options and pathways, provide academic support (e.g. tutoring), assist students with FAFSA completion, offer classes dedicated to precollegiate curriculum, provide summer bridge programming, and support other wrap-around services. The program enriches existing high school counseling resources.

• For programs at the postsecondary level, programs must provide intrusive advising, wrap-aro und student support services to assist students in overcoming academic and other barriers to success. The grantee must use the Colorado Challenge model and curriculum, which includes a collaborative approach between the institution and the Colorado Challenge as a peer coach.

Matching Student Scholarship (MSS) Grants: The program offers grants to counties, higher education institutions, and workforce programs for matching scholarship grants. These grants have historically represented $7.0 to $7.5 million of annual COSI allocations. State grants are matched by scholarship funds from state and philanthropic sources. State higher education institutions and institutional foundations operating on behalf of county governments provide the matching funds. These entities then distribute the grants (state funds and matching funds) to income-eligible students. Disbursements vary between one and four years.

STATUTORY AUTHORITY: Section 23-3.3-1001 through 1005, C.R.S.

REQUEST: The Department requests a continuation of $6,000,000 General Fund for this line item.

RECOMMENDATION: The staff recommendation restores funding to the FY 2019-20 level of $7,000,000 General Fund.

TUITION ASSISTANCE FOR CAREER AND TECHNICAL EDUCATION CERTIFICATE PROGRAMS

House Bill 15-1275 (Winter/Heath, Marble) directed the Colorado Commission on Higher Education to create a tuition assistance program for students enrolled in career and technical education certificate

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programs, subject to available appropriations. The program is for students who meet the income eligibility requirements for the federal Pell grant but do not qualify for the grant because the certificate program in which they are enrolled does not meet minimum credit hour requirements. The bill included a General Fund appropriation of $450,000 for tuition assistance for such students attending community colleges, Colorado Mesa University, area vocational schools, and local district junior colleges.

STATUTORY AUTHORITY: Section 23-3.3-1101, C.R.S.

REQUEST: The Department requests a continuing appropriation of $450,000 General Fund for this line item.

RECOMMENDATION: Staff recommends the request for continuation funding of $450,000 General Fund.

RURAL TEACHER FELLOWSHIP PROGRAM (H.B. 18-1002)

House Bill 18-1002 (Hamner & Rankin/Coram and Todd) created a teaching fellowship program for rural local education providers and institutions of higher education that offer a teacher preparation program. It authorized up to 100 one-year fellowships that are designed by participating rural education providers and institutions of higher education to meet the needs of the rural education provider and the higher education student who receives the teaching fellowship. Teaching fellows receive a $10,000 stipend, in addition to any other financial assistance available to the fellow. Stipends are funded 50 percent by the participating institution of higher education and 50 percent from state support. The education provider commits to extending an offer of employment to students who successfully complete a fellowship, and students receiving a job offer commit to two full years of employment or repaying their fellowship stipend. Requires reporting from participating institutions and an annual report from the Department of Higher Education to the Joint Budget Committee, Education Committees, the State Board of Education, and the Colorado Commission on Higher Education.

STATUTORY AUTHORITY: Section 23-78-305 through 307, C.R.S. [relocated]

REQUEST: The Department did not request an appropriation for this line item, which has been merged with the Rural Teacher Recruitment, Retention, and Professional Development line item.

RECOMMENDATION: Consistent with the request, staff does not recommend an appropriation for this line item.

COLORADO SECOND CHANCE SCHOLARSHIP

Senate Bill 19-231 (Moreno and Bridges/Exum and Tipper) created the second chance scholarship program in the Department to assist persons who were previously committed to the Division of Youth Services and are pursuing a postsecondary credential. The Executive Director of the Colorado Commission on Higher Education (CCHE) must appoint a program coordinator to regularly meet with and support scholarship recipients to set employment and education goals, and to connect students with wraparound services.

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The bill creates a five-member advisory board to review grant applications and make awards based on specified criteria. The board includes representatives from the Division of Youth Services, CCHE, the Department of Human Services, the program coordinator, and an individual previously committed to the Division of Youth Services. The board must meet at least four times per year, and establish application procedures and deadlines for the scholarship program. The advisory board must award scholarships of up to $10,000, with the specific amount based on the applicant's financial need, the cost of attendance, the available funding, and the number of applicants. The program is repealed September 1, 2022, following a sunset review.

In response to staff questions in February 2020, the Department reported that the Second Chance Scholarship program had focused on preparing for the launch of the Scholarship Application period. The Department had hired a program coordinator and formed an Advisory Board as mandated by SB 19-231. The program expected to open the scholarship to applications beginning March 1. However, due to the COVID-19 pandemic and related state fiscal impacts, funding for most scholarships was eliminated for FY 2019-20 and the balance of funding was removed for FY 2020-21.

STATUTORY AUTHORITY: Section 23-3.3-1201 through 1203, C.R.S.

REQUEST: The Department did not request an appropriation for this line item.

RECOMMENDATION: Staff does not recommend an appropriation for this line item. Because the program repeals September 1, 2022, staff recommends that funding only be provided in conjunction with a statutory change to extend the repeal date.

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(4) COLLEGE OPPORTUNITY FUND PROGRAM

The College Opportunity Fund Program section includes line items for stipends for students at state operated institutions, stipends for students at private institutions, and fee-for-service contracts with state supported institutions. The Governing Board section includes the reappropriated funds spending authority for the higher education institutions to receive and expend the stipend payments on behalf of students, and to receive and expend the fee-for-service contracts. Both fee-for-service and student stipend requirements codified in article 18 of Title 23. Provisions added in H.B. 14-1319 were significantly modified by H.B. 20-1366.

COLLEGE OPPORTUNITY FUND PROGRAM TOTAL GENERAL CASH REAPPROPRIATED FEDERAL

FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 Appropriation FY 2020-21 Appropriation $345,440,572 $345,440,572 $0 $0 $0 0.0 TOTAL $345,440,572 $345,440,572 $0 $0 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $345,440,572 $345,440,572 $0 $0 $0 0.0 R1 State operating funding for public higher education 41,828,929 41,828,929 0 0 0 0.0 Inflationary adjustment for institutions 20,521,308 20,521,308 0 0 0 0.0 Tuition buy down at access institutions 12,180,357 12,180,357 0 0 0 0.0 R5 Restore Cybercoding Cryptology program 2,000,000 2,000,000 0 0 0 0.0 NP4 Increased Medicaid match for financing payments 0 0 0 0 0.0 Annualize prior year budget actions 432,877,384 432,877,384 0 0 0 0.0 Annualize prior year legislation 1,771,766 1,771,766 0 0 0 0.0 TOTAL $856,620,316 $856,620,316 $0 $0 $0 0.0

INCREASE/(DECREASE) $511,179,744 $511,179,744 $0 $0 $0 0.0 Percentage Change 148.0% 148.0% 0.0% 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $817,717,233 $817,717,233 $0 $0 $0 0.0 Request Above/(Below) ($38,903,083) ($38,903,083) $0 $0 $0 0.0 Recommendation

ADDITIONAL PROGRAM BACKGROUND

STIPENDS • With some exceptions, resident undergraduate students who attend a state operated higher education institution are eligible for a stipend per credit hour taken. • The General Assembly annually sets the stipend rate through the Long Bill. • Statutes express the intent of the General Assembly that the Department request at least inflation and enrollment growth for the stipends. • Stipends are not considered a state grant for purposes of determining the enterprise status of higher education institutions. • The General Assembly must appropriate spending authority to the higher education institutions for money received from stipends.

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• Students that qualify for the federal need-based Pell grant that attend a participating private institution are eligible for a stipend equal to half of the stipend for students attending a state supported institution.

FEE-FOR-SERVICE CONTRACTS • Provisions related to fee-for-service contracts were significantly changed pursuant to H.B. 20- 1366. Statute specifies that each governing board's annual fee-for-service contract includes the amount of funding appropriated to the governing board pursuant to sections 23-18-303.5, 23-18- 304, and 23-18-308, C.R.S. minus the amount of funding appropriated to the board for College Opportunity Fund stipends pursuant to Section 23-18-202, C.R.S. • Section 23-18-303.5 includes provisions for performance funding that compare each institution’s improvement in performance on metrics specified in statute versus the improvements of other boards. The results are then calibrated to the current appropriation for the board. This mechanism will adjust funding to boards gradually over time. • Section 23-18-303.5 also provides statutory authorization for the General Assembly to add funding on an ongoing or temporary basis. Statute identifies a mechanism for adding ongoing additional funding based on the number of first generation students served by a board; however, the General Assembly has flexibility in decisions to add funds for ongoing additional funding or temporary additional funding. • Section 23-18-304 provides for fee-for-service contracts for the delivery of specialty educational programs, defined as the CU health sciences center campus, the CSU veterinary school, and various CSU extension programs. Statute requires that funding for these fee-for-service contracts increase or decrease at the same rate as total funding for performance contracts under Section 23- 18-303.5. (This requirement also applies to grants to the local district colleges and area technical colleges.) • Section 23-18-308 provides for limited purpose fee-for-service contracts that fund boards for the specific activities identified in this part of statute. • Fee-for-service contracts are not considered a state grant for purposes of determining the enterprise status of higher education institutions.

DECISION ITEMS – COLLEGE OPPORTUNITY FUND PROGRAM

The Department’s sole request affecting this section was R1 State Funding Increase for Public Higher Education. This request is addressed at the beginning of the packet.

 CONTINUE AND UPDATE REQUEST FOR INFORMATION TO EXPLORE ELIMINATING THE COF STIPEND PROGRAM AND INSTEAD USING SOLELY FEE-FOR-SERVICE CONTRACTS TO FUND STATE INSTITUTIONS OF HIGHER EDUCATION

RECOMMENDATION: Staff recommends that the Committee retain the following request for information with the amendments shown:

1 Colorado Department of Higher Education, Colorado Commission on Higher Education, Administration --- The Department, in collaboration with the governing boards, is requested to CONTINUE TO explore the implications of eliminating the current College Opportunity Fund

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student stipend structure and instead funding the state governing boards solely through fee-for- service contracts. The Department is requested to submit a report by November 1, 2020, September 1, 2021 that addresses the following issues and any other concerns it believes are relevant: RESPONSE IT HAS RECEIVED FROM THE ATTORNEY GENERAL’S OFFICE ON THE IMPLICATIONS OF THIS CHANGE, AND, BASED ON THIS, WHETHER THE DEPARTMENT AND THE GOVERNING BOARDS SUPPORT MAKING THIS TRANSITION. IF SO, THE DEPARTMENT IS REQUESTED TO OUTLINE ANY SPECIFIC RECOMMENDATIONS FOR IMPLEMENTING THE CHANGE, INCLUDING A TIMELINE THAT WILL MINIMIZE DISRUPTIONS TO INSTITUTIONAL OPERATIONS.

o What administrative processes and costs at the state and institutional level are driven by the current student stipend structure? o How would eliminating the requirement that students apply for stipends affect these processes? Would there be costs or savings associated with such a change? o How does the current system affect students and families? How would changing it affect them? o If the state wished to transition away from the current system, how much time would be required to modify accounting, reporting, and other systems to achieve this? What outreach or education would be required? o One of the benefits of the current system is that it informs students about state support for higher education. Could some other notification on student bills provide the same benefit? o Statutes on concurrent enrollment, early college, and similar programs indicate that higher education institutions are supported for their components of these programs through student stipend payments, while local education providers receive per pupil operating funds. Changes to the higher education funding model are likely to reduce the significance of postsecondary student enrollment in the state higher education funding structure. Eliminating the COF stipend would make this change more visible. Is this a concern? If so, does the Department of Higher Education, after consulting with the Department of Education, school districts, and concurrent enrollment providers, have any suggestions for addressing this? o Currently, students at some private institutions who qualify for financial aid receive a COF stipend for students attending private institutions. Could this funding be moved into the state’s financial aid system? Does the Department have any related concerns?

ANALYSIS: Background: Senate Bill 04-189 established the current system of student stipends and fee-for-service contracts for higher education. Under this system, all funding for the state institutions is either classified as a payment to the institution on behalf of a resident undergraduate student or as a contract between the State and the governing board for specific services. The purpose and result has been to enable the state’s higher education institutions to be classified as enterprises under TABOR.

For much of the time this system has been in effect, decisions about funding for the governing boards has had little or no relationship to the number of students qualifying for stipends. While the previous H.B. 14-1319 funding model allocated funding based on students earning stipends, this was ultimately one of the factors that led the model to be replaced. The new H.B. 20-1366 funding model allocates funding in a manner that is not directly related to the number of students earning student stipends.

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Instead, after determining funding allocations, the General Assembly will simply designate some portion for stipends and the balance for fee-for-service contracts.

In response to the FY 2020-21 information request on this issue, institutions reported significant workload and costs associated with the student stipend system. They also indicate that it adds a layer of complexity that can be a barrier to students. However, both the Department and some institutions express anxiety about whether any change will jeopardize the governing boards’ status as TABOR enterprises.

The Office of Legislative Legal Services has noted that institutions should be able to retain their enterprise status if all funding flows through fee-for-service contracts, rather than having some of the funds flow through student stipends. The Department indicates that it has solicited an informal opinion from the Attorney General’s Office, but this will not be ready until the end of the legislative session.

Staff believes there would be significant benefits to unwinding the current system but agrees that further legal input would be helpful given related legal risks. Staff also does not believe this is an issue that requires legislative action during the 2021 legislative session; however, staff hopes that a favorable response from the Attorney General’s Office will help move this issue forward during the 2022 legislative session. Based on Department feedback to the first response, staff anticipates that eliminating the stipend system will take up to two years if this moves forward.

 FOOTNOTE RELATED TO SCHOOL OF MEDICINE UPPER PAYMENT LIMIT

During figure setting for the Department of Health Care Policy and Financing (HCPF), staff explained a request from the University of Colorado to update figures in a footnote and adjust appropriations in HCPF consistent with Committee decisions in the Department of Higher Education for fee-for- service payments for specialty education programs. Staff will adjust the footnote based on the Committee’s final decision on this issue. The following information is background on the origins of the footnote and its impact on the two departments thus far.

• In FY 2017-18, the JBC approved new footnotes in HCPF and Higher Education and an appropriation in HCPF that enables the vast majority of the appropriation for specialty education programs at the University of Colorado, (almost all funding for educational services at the University of Colorado Health Sciences Center) to be transferred to the Department of Health Care Policy and Financing.

• These funds are used to enhance Medicaid medical payments to physicians who are faculty at the School of Medicine and who provide clinical care at University of Colorado Hospital and Children’s Hospital. The state funds transferred to HCPF are then matched by federal funds as part of enhanced physician reimbursements under the Upper Payment Limit (UPL).

• School of Medicine educational programs are “held harmless” because educational programs are reimbursed by a component unit of the University of Colorado that is responsible for physician billing before any real increase in payments to physicians.

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• As a result of this arrangement, access and services for Medicaid-eligible clients at University Hospital, Children’s Hospital, and other locations served by the faculty of the School of Medicine are enhanced, the Commission on Family Medicine Residency Training Program is increased, and staff are added at the Department of Health Care Policy and Financing to manage the program and related accounting.

• The Centers for Medicare and Medicaid Services approved the Upper Payment Limit arrangement during 2017, and HCPF and CU entered into a formal agreement to implement this program and identify and measure resulting benefits.

Current Footnote The FY 2020-21 version of this footnote reads as follows:

26 Department of Health Care Policy and Financing, Grand Totals; Department of Higher Education, College Opportunity Fund Program, Fee-for-service Contracts with State Institutions, Fee-for-service Contracts with State Institutions for Specialty Education Programs; and Governing Boards, Regents of the University of Colorado -- Due to the operating budget reduction for public institutions of higher education, for FY 2020-21 only, it is assumed that the University of Colorado School of Medicine will use clinical revenues to make an intergovernmental transfer of up to $800,000 to the Department of Health Care Policy and Financing for administrative costs and family medicine placements associated with care provided by the faculty of the health sciences center campus at the University of Colorado that are eligible for payment pursuant to Section 25.5-4-401, C.R.S. If the federal Centers for Medicare and Medicaid services continues to allow the Department of Health Care Policy and Financing to make supplemental payments to the University of Colorado School of Medicine, it is assumed that the University of Colorado School of Medicine will use clinical revenues to make an intergovernmental transfer in the amount approved, up to $45,389,025 to the Department of Health Care Policy and Financing. The Department of Higher Education shall transfer the remaining amount approved, up to $32,609,135, to the Department of Health Care Policy and Financing pursuant to Section 23-18-304(1)(c), C.R.S. If permission is discontinued, or is granted for a lesser amount, the Department of Higher Education shall transfer any portion of the $32,609,135 that is not transferred to the Department of Health Care Policy and Financing to the Regents of the University of Colorado.

 COF STIPEND AND FEE-FOR-SERVICE ADJUSTMENTS INCORPORATED IN T7 AND R1 REQUESTS

REQUEST: Requests T7 and R1 incorporated a restoration of total funding for the state governing boards to the FY 2019-20 level. The request did not explicitly address the COF stipend amount, the COF-eligible student FTE assumed, or the related calculation. However, total amounts shown suggest a restoration of the stipend to $94 or $95 per credit hour from the $40 per hour included in the FY 2020-21 Long Bill

RECOMMENDATION: As part of the restoration of funds under T7, the staff recommendation includes restoring the COF stipend amount to the FY 2019-20 level of $94 per credit hour or $2,820 for a student taking 30 credit hours per year (a full time course load). The FY 2020-21 Long Bill included $1,200 for such a student FTE. Staff also recommends making the related calculation on the basis of

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the FY 2019-20 actual COF stipends used. This has been the practice since the adoption of H.B. 14- 1319. Statute provides flexibility for the Department to make end of year adjustments between fee- for-service and stipend amounts in an amount not to exceed 10 percent of a governing board’s total appropriation.

This change also results in an adjustment to the COF stipend available to students attending private non-profit institutions and a related change to the appropriation for the “Stipends for eligible full- time equivalent students attending participating private institutions” line item. Pell-eligible students at these institutions are eligible for a COF stipend equal to 50 percent of the amount for a student at a public institution. The associated increase has been included in the recommendation for the R1 request.

COF STIPEND ADJUSTMENT - PARTICIPATING PRIVATE INSTITUTIONS

AMOUNT PER STUDENT FTE TOTAL STUDENT FTE FY 2020-21 $600 1,224.0 $734,400 FY 2022-22 1,410 1,224.0 1,725,840 Change 810 0 991,440

COF STIPEND ADJUSTMENT

COF STIPEND FTE IN COF STIPEND FTE FY 2020-21 LONG RECOMMENDED FY 2021-22 CHANGE FY2020-21 TO

BILL (FY 2019-20 LONG BILL (FY 2019-20 FY2021-22 ACTUAL) ACTUAL)

Adams State University 967.1 1,014.9 47.8 Colorado Mesa University 6,217.2 6,160.0 (57.2) Metropolitan State University 13,604.8 13,157.0 (447.8) Western Colorado University 1,310.2 1,346.0 35.8 Colorado State University System 18,238.3 17,878.6 (359.7) Fort Lewis 1,285.2 1,203.6 (81.6) University of Colorado System 29,466.8 29,719.0 252.2 Colorado School of Mines 2,798.6 2,857.2 58.6 University of Northern Colorado 6,494.8 6,245.9 (248.9) Community College System 44,468.0 46,343.3 1,875.3 Total 124,850.9 125,925.4 1,074.4

Consistent with provisions in Section 23-18-303.5, staff adjusted amounts between the amount for COF stipends for students at public institutions pursuant to Section 23-18-303.5, C.R.S. and the amount for student stipends at public institutions for a net $0 adjustment.

Staff recommendations to increase funding above the FY 2019-20 base were calculated as fee-for- service adjustments and therefore did not change the COF stipend amounts.

LINE ITEM DETAIL – COLLEGE OPPORTUNITY FUND PROGRAM

(A) STIPENDS

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STIPENDS FOR ELIGIBLE FULL-TIME EQUIVALENT STUDENTS ATTENDING STATE INSTITUTIONS COF stipend payments are made on behalf of eligible students to each of the governing boards.

STATUTORY AUTHORITY: Section 23-18-202, C.R.S.

REQUEST: The Department requests $351,292,326 for this line item.

RECOMMENDATION: The staff recommendation is shown below and is based on an average rate of $94 per credit hour ($2,820 per student FTE) for 125,925.4 student FTE.

COLLEGE OPPORTUNITY FUND PROGRAM, STIPENDS, STIPENDS FOR ELIGIBLE FULL-TIME EQUIVALENT STUDENTS ATTENDING STATE INSTITUTIONS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $149,821,087 $149,821,087 $0 $0 $0 0.0 TOTAL $149,821,087 $149,821,087 $0 $0 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $149,821,087 $149,821,087 $0 $0 $0 0.0 Annualize prior year budget actions 205,288,485 205,288,485 0 0 0 0.0 Inflationary adjustment for institutions 0 0 0 0 0 0.0 R1 State operating funding for public higher education 0 0 0 0 0 0.0 TOTAL $355,109,572 $355,109,572 $0 $0 $0 0.0

INCREASE/(DECREASE) $205,288,485 $205,288,485 $0 $0 $0 0.0 Percentage Change 137.0% 137.0% 0.0% 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $351,292,326 $351,292,326 $0 $0 $0 0.0 Request Above/(Below) Recommendation ($3,817,246) ($3,817,246) $0 $0 $0 0.0

STIPENDS FOR STUDENTS ATTENDING PARTICIPATING PRIVATE INSTITUTIONS

Students who qualify for the federal need-based Pell grant and attend a participating private institution are eligible for a stipend equal to half of the stipend for students attending a state operated institution. Three institutions currently participate in this program: Colorado Christian University, the University of Denver, and Regis University.

STATUTORY AUTHORITY: 23-18-202 (2) (e), C.R.S.

REQUEST: The Department requests $1,748,571 General Fund to align with its request to restore funding through request T7.

RECOMMENDATION: The staff recommendation is shown in the table below. Pursuant to statute, the funding level for stipends at private and public institutions are linked, and the private stipend amount must be set at 50 percent of the public rate. As noted above, only Pell-eligible students benefit from

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the program. The staff calculation is based on 1,224.0 student FTE qualifying for a stipend of $1,410 per FTE at the participating private institutions.

COLLEGE OPPORTUNITY FUND PROGRAM, STIPENDS, STIPENDS FOR ELIGIBLE FULL-TIME EQUIVALENT STUDENTS ATTENDING PARTICIPATING PRIVATE INSTITUTIONS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $734,400 $734,400 $0 $0 $0 0.0 TOTAL $734,400 $734,400 $0 $0 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $734,400 $734,400 $0 $0 $0 0.0 R1 State operating funding for public higher education 991,440 991,440 0 0 0 0.0 Inflationary adjustment for institutions 0 0 0 0 0 0.0 Annualize prior year budget actions 0 0 0 0 0.0 TOTAL $1,725,840 $1,725,840 $0 $0 $0 0.0

INCREASE/(DECREASE) $991,440 $991,440 $0 $0 $0 0.0 Percentage Change 135.0% 135.0% 0.0% 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $1,748,571 $1,748,571 $0 $0 $0 0.0 Request Above/(Below) Recommendation $22,731 $22,731 $0 $0 $0 0.0

(B) FEE-FOR-SERVICE CONTRACTS WITH STATE INSTITUTIONS

Each governing board has a fee-for-service contract with the Department for services not supported through the COF stipend payment. These contracts are based on funding provisions specified in Section 23-18-303.5, C.R.S. or are based on specialty education programs (school of medicine, veterinary medicine, and agricultural extension programs) pursuant to Section 23-18-304, C.R.S. In addition, Section 23-18-308, C.R.S. authorizes fee-for-service contracts for limited purposes, e.g., a contract with a particular governing board for a specific service. As specified in Section 23-18-303.5 (1)(b), each governing board’s annual fee-for-service contract includes the amount appropriated pursuant to Section 23-18-303.5, 23-18-304, and 23-18-308, C.R.S., minus the amount appropriated for student stipends pursuant to Section 23-18-202, C.R.S.

FEE-FOR-SERVICE CONTRACTS WITH STATE INSTITUTIONS PURSUANT TO SECTION 23- 18-303.5 [REVISED NAME], C.R.S. This line item includes funding for performance funding and additional ongoing and temporary funding as authorized in Section 23-18-303.5, C.R.S. The Department is required to submit a request for funding as part of its annual budget request, using a model that complies with statute.

STATUTORY AUTHORITY: 23-18-303.5, C.R.S.

REQUEST: The Department requests $317,526,415 General Fund for this line item.

RECOMMENDATION: The staff recommendation is summarized below. Details of the request and recommendation are addressed in the discussion at the beginning of the packet.

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COLLEGE OPPORTUNITY FUND PROGRAM, FEE-FOR-SERVICE CONTRACTS WITH STATE INSTITUTIONS, FEE- FOR-SERVICE CONTRACTS WITH STATE INSTITUTIONS PURSUANT TO SECTION 23-18-303, C.R.S. TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $131,082,785 $131,082,785 $0 $0 $0 0.0 TOTAL $131,082,785 $131,082,785 $0 $0 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $131,082,785 $131,082,785 $0 $0 $0 0.0 Annualize prior year budget actions 149,185,448 149,185,448 0 0 0 0.0 R1 State operating funding for public 33,440,937 33,440,937 0 0 0 0.0 higher education Inflationary adjustment for institutions 17,274,943 17,274,943 0 0 0 0.0 Tuition buy down at access institutions 12,180,357 12,180,357 0 0 0 0.0 TOTAL $343,164,470 $343,164,470 $0 $0 $0 0.0

INCREASE/(DECREASE) $212,081,685 $212,081,685 $0 $0 $0 0.0 Percentage Change 161.8% 161.8% 0.0% 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $317,526,415 $317,526,415 $0 $0 $0 0.0 Request Above/(Below) Recommendation ($25,638,055) ($25,638,055) $0 $0 $0 0.0

FEE-FOR-SERVICE CONTRACTS WITH STATE INSTITUTIONS FOR SPECIALTY EDUCATION PROGRAMS

This line item provides funding for the School of Veterinary Medicine and agricultural extension programs at Colorado State University and for the University of Colorado Health Sciences Center.

STATUTORY AUTHORITY: 23-18-304, C.R.S.

REQUEST: The Department requests $141,456,893 General Fund for this line item, including requests T7, R1, and NP4

RECOMMENDATION: The staff recommendation is summarized below. Details of the request and recommendation for T7, R1, and inflationary increases for the institutions, as well as the request for NP4 (Increased Medicaid Match for Financing Payments), which must be included in separate legislation, and annualization of H.B. 20-1385 (Increased Use of Medicaid Match), which was omitted from the request, are discussed at the beginning of this packet.

COLLEGE OPPORTUNITY FUND PROGRAM, FEE-FOR-SERVICE CONTRACTS WITH STATE INSTITUTIONS, FEE- FOR-SERVICE CONTRACTS WITH STATE INSTITUTIONS FOR SPECIALTY EDUCATION PROGRAMS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $60,109,272 $60,109,272 $0 $0 $0 0.0 TOTAL $60,109,272 $60,109,272 $0 $0 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $60,109,272 $60,109,272 $0 $0 $0 0.0

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COLLEGE OPPORTUNITY FUND PROGRAM, FEE-FOR-SERVICE CONTRACTS WITH STATE INSTITUTIONS, FEE- FOR-SERVICE CONTRACTS WITH STATE INSTITUTIONS FOR SPECIALTY EDUCATION PROGRAMS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE Annualize prior year budget actions 78,403,451 78,403,451 0 0 0 0.0 R1 State operating funding for public higher education 7,396,552 7,396,552 0 0 0 0.0 Inflationary adjustment for institutions 3,246,365 3,246,365 0 0 0 0.0 Annualize prior year legislation 2,021,766 2,021,766 0 0 0 0.0 NP4 Increased Medicaid match for financing payments 0 0 0 0 0 0.0 TOTAL $151,177,406 $151,177,406 $0 $0 $0 0.0

INCREASE/(DECREASE) $91,068,134 $91,068,134 $0 $0 $0 0.0 Percentage Change 151.5% 151.5% 0.0% 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $141,456,893 $141,456,893 $0 $0 $0 0.0 Request Above/(Below) Recommendation ($9,720,513) ($9,720,513) $0 $0 $0 0.0

LIMITED PURPOSE FEE-FOR-SERVICE CONTRACTS

This line item provides funding for special purpose activities that may be contracted with specific governing boards. The table below lists the bills that authorized the associated funding and the related appropriations by governing board as appropriated in FY 2020-21 and annualized or otherwise adjusted in FY 2021-22 based on changes discussed earlier in this packet.

LIMITED PURPOSE FEE-FOR-SERVICE CONTRACTS - FY 2020-21 AND FY 2021-22 FY 2020-21 Appropriation MESA METRO WESTERN CSU SYSTEM CU SYSTEM UNC CC SYSTEM TOTAL Career Pathways (H.B. 15- $0 $0 $0 $0 $0 $0 $86,960 86,960 1274) Inclusive Higher Education 0 0 0 0 100,000 75,000 75,000 250,000 Pilot (S.B. 16-196) Cyber Coding Cryptology 182,352 182,352 121,568 729,412 1,701,964 0 182,352 3,100,000 (S.B. 18-086) Food Systems Advisory 0 0 0 151,068 0 0 0 151,068 Council (S.B. 19-1202) Expanding Concurrent 0 0 0 0 0 0 105,000 105,000 Enrollment (S.B. 19-176) FY 2020-21 Appropriations 182,352 182,352 121,568 880,480 1,801,964 75,000 449,312 3,693,028 FY 2021-22 Annualization R5 Restore Cyber Coding 117,648 117,648 78,432 470,588 1,098,036 0 117,648 2,000,000 Cryptology (S.B. 18-086) Repeal of Inclusive Higher (100,000) (75,000) (75,000) (250,000) Ed Pilot (S.B. 16-196) FY 2021-22 Long Bill Fee $300,000 $300,000 $200,000 $1,351,068 $2,800,000 $0 $491,960 $5,443,028 for Service Contacts

STATUTORY AUTHORITY: 23-18-308, C.R.S.

REQUEST: The Department requests $5,693,028 for this line item, including request R5.

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RECOMMENDATION: The staff recommendation is shown below and is consistent with the table above. The recommendation includes the request for R5 but also includes annualization of S.B. 16-196, which was not requested.

COLLEGE OPPORTUNITY FUND PROGRAM, FEE-FOR-SERVICE CONTRACTS WITH STATE INSTITUTIONS, LIMITED PURPOSE FEE-FOR-SERVICE CONTRACTS WITH STATE INSTITUTIONS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $3,693,028 $3,693,028 $0 $0 $0 0.0 TOTAL $3,693,028 $3,693,028 $0 $0 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $3,693,028 $3,693,028 $0 $0 $0 0.0 R5 Restore Cybercoding Cryptology program 2,000,000 2,000,000 0 0 0 0.0 Inflationary adjustment for institutions 0 0 0 0 0 0.0 Annualize prior year legislation (250,000) (250,000) 0 0 0 0.0 TOTAL $5,443,028 $5,443,028 $0 $0 $0 0.0

INCREASE/(DECREASE) $1,750,000 $1,750,000 $0 $0 $0 0.0 Percentage Change 47.4% 47.4% 0.0% 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $5,693,028 $5,693,028 $0 $0 $0 0.0 Request Above/(Below) Recommendation $250,000 $250,000 $0 $0 $0 0.0

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(5) GOVERNING BOARDS

This division includes a single line item for each governing board that contains reappropriated funds spending authority for stipends, fee-for-service contracts, and appropriated grants, and cash funds spending authority for tuition, academic and academic facility fees, and revenue from the tobacco master settlement agreement.

GOVERNING BOARDS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL

FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 Appropriation FY 2020-21 Appropriation $3,138,426,895 $0 $2,793,720,723 $344,706,172 $0 26,304.1 Long Bill supplemental (222,361,955) 0 (222,361,955) 0 0 0.0 TOTAL $2,916,064,940 $0 $2,571,358,768 $344,706,172 $0 26,304.1

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $2,916,064,940 $0 $2,571,358,768 $344,706,172 $0 26,304.1 R1 State operating funding for public higher education 40,837,490 0 0 40,837,490 0 0.0 Inflationary adjustment for institutions 20,521,308 0 0 20,521,308 0 0.0 Tuition buy down at access institutions 0 0 (12,180,357) 12,180,357 0 0.0 R2 Tuition spending authority 127,838,721 0 127,838,721 0 0 0.0 R5 Restore Cybercoding Cryptology program 2,000,000 0 0 2,000,000 0 0.0 NP4 Increased Medicaid match for financing payments 0 0 0 0 0 0.0 Annualize prior year budget actions 432,877,384 0 0 432,877,384 0 0.0 Mandatory fee adjustments 10,866,195 0 10,866,195 0 0 0.0 Annualize prior year legislation (778,234) 0 (2,550,000) 1,771,766 0 0.0 Employee FTE adjustment 0 0 0 0 0 (200.7) Higher Education limited gaming adjustment (1,792,261) 0 (1,792,261) 0 0 0.0 Tobacco revenue adjustment (694,141) 0 (694,141) 0 0 0.0 TOTAL $3,547,741,402 $0 $2,692,846,925 $854,894,477 $0 26,103.4

INCREASE/(DECREASE) $631,676,462 $0 $121,488,157 $510,188,305 $0 (200.7) Percentage Change 21.7% 0.0% 4.7% 148.0% 0.0% (0.8%)

FY 2021-22 EXECUTIVE REQUEST $3,684,095,387 $0 $2,868,126,726 $815,968,661 $0 26,304.1 Request Above/(Below) $136,353,985 $0 $175,279,801 ($38,925,816) $0 200.7 Recommendation

Note: All reappropriated amounts shown represent General Fund initially appropriated in the College Opportunity Fund Program section and reappropriated to the Governing Boards. Cash Funds amounts, with few exceptions, represent tuition and fee revenue.

DECISION ITEMS – GOVERNING BOARDS

FY 2020-21 DECISION ITEMS

The Department did not submit a request for mid-year adjustments to stipends, fee-for-service contracts, or tuition or fee revenue. Pursuant to Section 23-18-202 (2)(a)(I), C.R.S., the Department is required to annually estimate the number of undergraduate full-time equivalent students eligible for

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COF stipends and report the numbers by February 15 to the Governor and the Joint Budget Committee. Further, the Department provided estimates of tuition, fee, and COF revenue in February, consistent with the provisions outlined in an annual request for information.

Staff does not recommend adjusting the estimates of COF stipend eligible students for FY 2020-21. While there are differences between earlier projections (based on FY 2018-19 actuals) and current estimates (based on FY 2020-21 data to-date), staff believes the adjustments can be managed within the Department’s authority to transfer, at the end of the year, up to 10 percent of the total appropriation for a governing board between fee-for-service and stipend amounts pursuant to Section 23-18-202, C.R.S.

 FY 2020-21 TUITION ADJUSTMENT

As discussed earlier in this document, staff recommends updating tuition amounts for FY 2020-21 to match new projections from the higher education governing boards. FY 2020-21 amounts are appropriated, except at the Colorado School of Mines. The Boards all complied with FY 2020-21 footnote assumptions. Legislative Council Staff and institutional estimates are reasonably close, but institutional estimates are lower. Due to the pandemic, the variance between the original forecast and current estimates are much greater than usual.

FY 2020-21 LONG BILL SUPPLEMENTAL - TUITION FORECAST REVISION

ORIGINAL FY REVISED FY 21 PERCENTAGE CHANGE 21 FORECAST FORECAST CHANGE

Adams State University 20,156,387 21,183,079 1,026,692 5.1% Colorado Mesa University 74,194,937 72,043,336 (2,151,601) -2.9% Metropolitan State University of Denver 118,875,507 111,343,670 (7,531,837) -6.3% Western State Colorado University 18,799,307 16,563,599 (2,235,708) -11.9% Colorado State University System 513,161,489 435,367,948 (77,793,541) -15.2% Fort Lewis College 40,642,080 41,909,810 1,267,730 3.1% University of Colorado System 1,161,280,615 1,070,573,330 (90,707,285) -7.8%

Colorado School of Mines 163,225,233 159,656,471 (3,568,762) -2.2% University of Northern Colorado 87,315,949 77,696,289 (9,619,660) -11.0% Community College System 282,548,629 273,474,970 (9,073,659) -3.2%

Total Tuition Revenue $2,480,200,133 $2,279,812,502 ($200,387,631) -8.1%

 FY 2020-21 FEE ADJUSTMENT

Fee amounts reflect mandatory fees charged to all students. These are not appropriated and are shown for informational purposes. However, staff recommends adjusting them for better comparison with FY 2021-22 recommended figures.

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FY 2020-21 REVISED FEE REVENUE ESTIMATE - MANDATORY FEES FY 2020-21 FY 2020-21 LONG REVISED CHANGE % CHANGE BILL FORECAST Adams State University $5,220,190 $4,737,062 ($483,128) -9.3% Colorado Mesa University 5,823,992 0 (5,823,992) n/a

Metropolitan State University 25,856,180 29,803,990 3,947,810 15.3%

Western State Colorado University 6,359,289 5,678,495 (680,794) -10.7%

Colorado State University System 80,450,309 75,590,755 (4,859,554) -6.0%

Fort. Lewis College 5,383,726 5,263,443 (120,283) -2.2% University of Colorado System 99,108,990 88,628,867 (10,480,123) -10.6%

Colorado School of Mines 16,084,802 16,228,096 143,294 0.9% University of Northern Colorado 18,810,180 17,859,207 (950,973) -5.1% Community College System 20,983,564 18,316,983 (2,666,581) -12.7%

Total $284,081,222 $262,106,898 ($21,974,324) -7.7%

FY 2021-22 DECISION ITEMS

The Department’s request included R1 State Funding Increase for Public Higher Education and R2 Tuition Spending Authority Increase for FY 2021-22. The Department did not submit a request for FY 2021-22 tuition adjustments. Both R1 and R2 and additional staff recommendations for institutional funding and a tuition buy-down are discussed at the beginning of this packet.

As discussed at the beginning of this packet, pursuant to R2, staff is recommending appropriations and footnotes for each higher education governing board for FY 2021-22, consistent with statute. Only amounts for the Colorado School of Mines are shown solely for informational purposes pursuant to the provisions of Section 23-41-104.6 (5)(c). Staff anticipates that, consistent with past practice, these amounts will be updated in 2022 based on updated estimates.

 ESTIMATED FEE REVENUE - MANDATORY FEES

Staff recommends including fee estimates for each of the governing boards based on their revenue from all mandatory fees. Fee revenue is shown for informational purposes only but does correspond to overall student costs. It is important to note that the "mandatory fees" shown are based on the Department's definition and include fees for student activities (e.g. student government, athletics), as well as fees for capital construction and fees related to academic programs. These fees are included because they are mandatory for all students, regardless of whether the student is enrolled in a particular program or course.

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FY 2021-22 FEE REVENUE ESTIMATE - MANDATORY FEES

FY 2020-21 FY 2021-22 ADJUSTED CHANGE % CHANGE ESTIMATE ESTIMATE Adams State University $4,737,062 $4,737,000 ($62) 0.0% Colorado Mesa University 0 0 0 n/a Metropolitan State University 29,803,990 29,669,040 (134,950) -0.5% Western State Colorado University 5,678,495 5,678,495 (0) 0.0% Colorado State University System 75,590,755 79,118,255 3,527,500 4.7% Fort Lewis College 5,263,443 5,342,395 78,952 1.5% University of Colorado System 88,628,867 96,569,829 7,940,962 9.0% Colorado School of Mines 16,228,096 15,507,986 (720,110) -4.4% University of Northern Colorado 17,859,207 17,740,757 (118,450) -0.7% Community College System 18,316,983 18,609,336 292,353 1.6%

Total $262,106,898 $272,973,093 $10,866,195 4.1%

 AMENDMENT 50 GAMING REVENUE ADJUSTMENT

Staff recommends modifying estimated distributions of limited gaming funds reflected in the FY 2021-22 Long Bill to align with the FY 2019-20 actual distributions, including amounts allocated to the Local District Colleges. These amounts are shown for informational purposes only and are provided pursuant to Amendment 50 (passed in 2008 to modify limits on bets, hours, and games in Central City, Black Hawk, and Cripple Creek).

AMENDMENT 50 LIMITED GAMING

ADJUSTMENT FY 2018-19 FY 2019-20 TO REFLECT IN ACTUAL ACTUAL FY 2021-22 LONG BILL State Institutions State Community College System $11,639,810 $9,969,431 ($1,670,379) Adams State University 4,196 2,388 (1,808) Colorado Mesa University 682,556 562,482 (120,074)

Local District Colleges Colorado Mountain College 742,699 611,446 (131,253) Aims Community College 917,534 796,551 (120,983)

Total $13,986,795 $11,942,298 ($2,044,497)

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 FULL-TIME EQUIVALENT FACULTY AND STAFF FTE ADJUSTMENT

Staff recommends an adjustment to employee FTE shown in the Long Bill for informational purposes. In the past, this adjustment has been based on the estimated FTE for the current fiscal year that is included in the budget data books submitted by the Department. However, for FY 2021-22, staff recommends using FY 2019-20 actual data from the budget data books.

Prior to FY 1999-00, FTE designations were not included in the Long Bill for Higher Education. In FY 1999-00 the JBC adopted a policy of reflecting FTE for all departments in the Long Bill to provide additional information about the number of state employees. Pursuant to statute, the governing boards may hire as many or as few employees as they see fit. The staff recommendation is consistent with the historic practice of the JBC of including an estimate but differs from the past in that, due to the highly unusual nature of FY 2020-21, staff believes the FY 2019-20 actual data is likely to provide a more useful estimate of FY 2021-22 employment. Note that amounts in this section do not includ e the adjustment for the Auraria Higher Education Center, which is shown in a separate Long Bill section.

GOVERNING BOARD FTE

FY 2020-21 FY 2021-22 RECOMMENDED

(FY 2019-20 (FY 2019-20 DATA BOOKS DATA BOOKS CHANGE PERCENT ESTIMATES) ACTUALS)

Adams State University 329.0 314.2 (14.8) -4.5% Colorado Mesa University 758.0 742.7 (15.3) -2.0% Metropolitan State University 1,167.2 1,369.1 201.9 17.3%

Western State Colorado University 277.8 273.8 (4.0) -1.4% Colorado State University System 5,033.3 5,028.9 (4.4) -0.1% Fort Lewis College 437.7 409.7 (28.0) -6.4% University of Colorado System 10,005.1 9,926.1 (79.0) -0.8% Colorado School of Mines 980.5 980.5 0.0 0.0%

University of Northern Colorado 1,294.6 1,156.9 (137.7) -10.6% Community College System 6,020.8 5,901.5 (119.3) -2.0% Auraria Higher Education Center 189.0 200.4 11.4 6.0% TOTAL 26,493.0 26,303.8 (189.2) -0.7%

 TOBACCO REVENUE ADJUSTMENT

Staff recommends reflecting funding from Tobacco Settlement revenue for the University of Colorado, based on current tobacco settlement revenue estimates and allocation formulas and the additional revenue anticipated to be available. The Department did not request this change, but it reflects the statutory allocation of money from the tobacco master settlement agreement, the

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projected tobacco revenues, and the JBC's action during figure setting for the tobacco-funded programs.

TOBACCO HEALTH EDUCATION FUND

FY 2020-21 Estimate 14,062,806 FY 2021-22 Estimate 13,368,665

FY 2021-22 Appropriation Adjustment ($694,141)

LINE ITEM DETAIL – GOVERNING BOARDS

General Note: All reappropriated amounts shown represent General Fund initially appropriated in the College Opportunity Fund Program section and reappropriated to the Governing Boards. Cash Funds amounts, with few exceptions, represent tuition and fee revenue.

GOVERNING BOARDS, TRUSTEES OF ADAMS STATE UNIVERSITY, TRUSTEES OF ADAMS STATE COLLEGE TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $32,638,481 $0 $25,380,773 $7,257,708 $0 329.0 Long Bill supplemental $543,564 $0 $543,564 $0 $0 0.0 TOTAL $33,182,045 $0 $25,924,337 $7,257,708 $0 329.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $33,182,045 $0 $25,924,337 $7,257,708 $0 329.0 Annualize prior year budget actions 9,158,536 0 0 9,158,536 0 0.0 R1 State operating funding for public higher education 864,013 0 0 864,013 0 0.0 Inflationary adjustment for institutions 250,903 0 0 250,903 0 0.0 Employee FTE adjustment 0 0 0 0 0 (14.8) R2 Tuition spending authority (819,479) 0 (819,479) 0 0 0.0 Higher Education limited gaming adjustment (1,808) 0 (1,808) 0 0 0.0 Mandatory fee adjustments (62) 0 (62) 0 0 0.0 TOTAL $42,634,148 $0 $25,102,988 $17,531,160 $0 314.2

INCREASE/(DECREASE) $9,452,103 $0 ($821,349) $10,273,452 $0 (14.8) Percentage Change 28.5% 0.0% (3.2%) 141.6% 0.0% (4.5%)

FY 2021-22 EXECUTIVE REQUEST $43,127,816 $0 $25,985,465 $17,142,351 $0 329.0 Request Above/(Below) Recommendation $493,668 $0 $882,477 ($388,809) $0 14.8

GOVERNING BOARDS, TRUSTEES OF COLORADO MESA UNIVERSITY, TRUSTEES OF COLORADO MESA UNIVERSITY TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $94,401,520 $0 $80,701,485 $13,700,035 $0 758.0

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GOVERNING BOARDS, TRUSTEES OF COLORADO MESA UNIVERSITY, TRUSTEES OF COLORADO MESA UNIVERSITY TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE Long Bill supplemental (7,975,593) 0 (7,975,593) 0 0 0.0 TOTAL $86,425,927 $0 $72,725,892 $13,700,035 $0 758.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $86,425,927 $0 $72,725,892 $13,700,035 $0 758.0 Annualize prior year budget actions 17,058,028 0 0 17,058,028 0 0.0 R1 State operating funding for public 1,609,248 0 0 1,609,248 0 0.0 higher education Inflationary adjustment for institutions 802,251 0 0 802,251 0 0.0 R5 Restore Cybercoding Cryptology program 117,648 0 0 117,648 0 0.0 Tuition buy down at access institutions 0 0 (1,714,564) 1,714,564 0 0.0 Mandatory fee adjustments 0 0 0 0 0 0.0 Employee FTE adjustment 0 0 0 0 0 (15.3) R2 Tuition spending authority (1,741,069) 0 (1,741,069) 0 0 0.0 Higher Education limited gaming (120,074) 0 (120,074) 0 0 0.0 adjustment TOTAL $104,151,959 $0 $69,150,185 $35,001,774 $0 742.7

INCREASE/(DECREASE) $17,726,032 $0 ($3,575,707) $21,301,739 $0 (15.3) Percentage Change 20.5% 0.0% (4.9%) 155.5% 0.0% (2.0%)

FY 2021-22 EXECUTIVE REQUEST $115,367,761 $0 $82,927,333 $32,440,428 $0 758.0 Request Above/(Below) Recommendation $11,215,802 $0 $13,777,148 ($2,561,346) $0 15.3

GOVERNING BOARDS, TRUSTEES OF METROPOLITAN STATE COLLEGE OF DENVER, TRUSTEES OF METROPOLITAN STATE COLLEGE OF DENVER TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $171,655,078 $0 $144,731,687 $26,923,391 $0 1,167.2 Long Bill supplemental (3,584,027) 0 (3,584,027) 0 0 0.0 TOTAL $168,071,051 $0 $141,147,660 $26,923,391 $0 1,167.2

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $168,071,051 $0 $141,147,660 $26,923,391 $0 1,167.2 Annualize prior year budget actions 33,744,646 0 0 33,744,646 0 0.0 R2 Tuition spending authority 5,920,025 0 5,920,025 0 0 0.0 R1 State operating funding for public 3,183,457 0 0 3,183,457 0 0.0 higher education Inflationary adjustment for institutions 2,080,336 0 0 2,080,336 0 0.0 R5 Restore Cybercoding Cryptology program 117,648 0 0 117,648 0 0.0 Tuition buy down at access institutions 0 0 (3,147,182) 3,147,182 0 0.0 Employee FTE adjustment 0 0 0 0 0 201.9 Mandatory fee adjustments (134,950) 0 (134,950) 0 0 0.0 TOTAL $212,982,213 $0 $143,785,553 $69,196,660 $0 1,369.1

INCREASE/(DECREASE) $44,911,162 $0 $2,637,893 $42,273,269 $0 201.9 Percentage Change 26.7% 0.0% 1.9% 157.0% 0.0% 17.3%

FY 2021-22 EXECUTIVE REQUEST $212,494,079 $0 $148,297,952 $64,196,127 $0 1,167.2

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GOVERNING BOARDS, TRUSTEES OF METROPOLITAN STATE COLLEGE OF DENVER, TRUSTEES OF METROPOLITAN STATE COLLEGE OF DENVER TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE Request Above/(Below) Recommendation ($488,134) $0 $4,512,399 ($5,000,533) $0 (201.9)

GOVERNING BOARDS, TRUSTEES OF WESTERN STATE COLLEGE, TRUSTEES OF WESTERN STATE COLLEGE TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $31,595,023 $0 $25,158,596 $6,436,427 $0 277.8 Long Bill supplemental (2,916,502) 0 (2,916,502) 0 0 0.0 TOTAL $28,678,521 $0 $22,242,094 $6,436,427 $0 277.8

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $28,678,521 $0 $22,242,094 $6,436,427 $0 277.8 Annualize prior year budget actions 7,968,751 0 0 7,968,751 0 0.0 R1 State operating funding for public higher education 751,769 0 0 751,769 0 0.0 Inflationary adjustment for institutions 405,583 0 0 405,583 0 0.0 R2 Tuition spending authority 403,594 0 403,594 0 0 0.0 R5 Restore Cybercoding Cryptology program 78,432 0 0 78,432 0 0.0 Mandatory fee adjustments 0 0 0 0 0 0.0 Employee FTE adjustment 0 0 0 0 0 (4.0) TOTAL $38,286,650 $0 $22,645,688 $15,640,962 $0 273.8

INCREASE/(DECREASE) $9,608,129 $0 $403,594 $9,204,535 $0 (4.0) Percentage Change 33.5% 0.0% 1.8% 143.0% 0.0% (1.4%)

FY 2021-22 EXECUTIVE REQUEST $41,027,729 $0 $25,722,575 $15,305,154 $0 277.8 Request Above/(Below) Recommendation $2,741,079 $0 $3,076,887 ($335,808) $0 4.0

GOVERNING BOARDS, BOARD OF GOVERNORS OF THE COLORADO STATE UNIVERSITY SYSTEM, BOARD OF GOVERNORS OF THE COLORADO STATE UNIVERSITY SYSTEM TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $666,240,131 $0 $593,611,798 $72,628,333 $0 5,033.4 Long Bill supplemental (82,653,095) 0 (82,653,095) 0 0 0.0 TOTAL $583,587,036 $0 $510,958,703 $72,628,333 $0 5,033.4

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $583,587,036 $0 $510,958,703 $72,628,333 $0 5,033.4 Annualize prior year budget actions 90,538,955 0 0 90,538,955 0 0.0 R2 Tuition spending authority 45,614,038 0 45,614,038 0 0 0.0 R1 State operating funding for public higher education 8,541,411 0 0 8,541,411 0 0.0 Inflationary adjustment for institutions 3,592,648 0 0 3,592,648 0 0.0 Mandatory fee adjustments 3,527,500 0 3,527,500 0 0 0.0 R5 Restore Cybercoding Cryptology program 470,588 0 0 470,588 0 0.0

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GOVERNING BOARDS, BOARD OF GOVERNORS OF THE COLORADO STATE UNIVERSITY SYSTEM, BOARD OF GOVERNORS OF THE COLORADO STATE UNIVERSITY SYSTEM TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE Employee FTE adjustment 0 0 0 0 0 (4.4) TOTAL $735,872,176 $0 $560,100,241 $175,771,935 $0 5,029.0

INCREASE/(DECREASE) $152,285,140 $0 $49,141,538 $103,143,602 $0 (4.4) Percentage Change 26.1% 0.0% 9.6% 142.0% 0.0% (0.1%)

FY 2021-22 EXECUTIVE REQUEST $780,877,197 $0 $609,006,643 $171,870,554 $0 5,033.4 Request Above/(Below) Recommendation $45,005,021 $0 $48,906,402 ($3,901,381) $0 4.4

GOVERNING BOARDS, TRUSTEES OF FORT LEWIS COLLEGE, TRUSTEES OF FORT LEWIS COLLEGE TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $51,963,110 $0 $46,025,806 $5,937,304 $0 437.7 Long Bill supplemental $1,147,447 $0 $1,147,447 $0 $0 0.0 TOTAL $53,110,557 $0 $47,173,253 $5,937,304 $0 437.7

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $53,110,557 $0 $47,173,253 $5,937,304 $0 437.7 Annualize prior year budget actions 7,492,311 0 0 7,492,311 0 0.0 R2 Tuition spending authority 990,855 0 990,855 0 0 0.0 R1 State operating funding for public 706,822 0 0 706,822 0 0.0 higher education Inflationary adjustment for institutions 213,404 0 0 213,404 0 0.0 Mandatory fee adjustments 78,952 0 78,952 0 0 0.0 Employee FTE adjustment 0 0 0 0 0 (28.0) TOTAL $62,592,901 $0 $48,243,060 $14,349,841 $0 409.7

INCREASE/(DECREASE) $9,482,344 $0 $1,069,807 $8,412,537 $0 (28.0) Percentage Change 17.9% 0.0% 2.3% 141.7% 0.0% (6.4%)

FY 2021-22 EXECUTIVE REQUEST $61,277,835 $0 $47,245,068 $14,032,767 $0 437.7 Request Above/(Below) Recommendation ($1,315,066) $0 ($997,992) ($317,074) $0 28.0

GOVERNING BOARDS, REGENTS OF THE UNIVERSITY OF COLORADO, REGENTS OF THE UNIVERSITY OF COLORADO TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $1,378,659,659 $0 $1,277,502,411 $101,157,248 $0 10,005.1 Long Bill supplemental (101,187,408) 0 (101,187,408) 0 0 0.0 TOTAL $1,277,472,251 $0 $1,176,315,003 $101,157,248 $0 10,005.1

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $1,277,472,251 $0 $1,176,315,003 $101,157,248 $0 10,005.1 Annualize prior year budget actions 127,928,180 0 0 127,928,180 0 0.0 R2 Tuition spending authority 73,853,951 0 73,853,951 0 0 0.0 R1 State operating funding for public higher education 12,068,697 0 0 12,068,697 0 0.0 Mandatory fee adjustments 7,940,962 0 7,940,962 0 0 0.0

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GOVERNING BOARDS, REGENTS OF THE UNIVERSITY OF COLORADO, REGENTS OF THE UNIVERSITY OF COLORADO TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE Inflationary adjustment for institutions 5,184,008 0 0 5,184,008 0 0.0 R5 Restore Cybercoding Cryptology program 1,098,036 0 0 1,098,036 0 0.0 Employee FTE adjustment 0 0 0 0 0 (79.1) NP4 Increased Medicaid match for financing payments 0 0 0 0 0.0 Tobacco revenue adjustment (694,141) 0 (694,141) 0 0 0.0 Annualize prior year legislation (628,234) 0 (2,550,000) 1,921,766 0 0.0 TOTAL $1,504,223,710 $0 $1,254,865,775 $249,357,935 $0 9,926.0

INCREASE/(DECREASE) $226,751,459 $0 $78,550,772 $148,200,687 $0 (79.1) Percentage Change 17.8% 0.0% 6.7% 146.5% 0.0% (0.8%)

FY 2021-22 EXECUTIVE REQUEST $1,549,763,718 $0 $1,312,340,829 $237,422,889 $0 10,005.1 Request Above/(Below) Recommendation $45,540,008 $0 $57,475,054 ($11,935,046) $0 79.1

GOVERNING BOARDS, TRUSTEES OF THE COLORADO SCHOOL OF MINES, TRUSTEES OF THE COLORADO SCHOOL OF MINES TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $189,965,966 $0 $179,310,035 $10,655,931 $0 980.5 Long Bill supplemental (3,425,468) 0 (3,425,468) 0 0 0.0 TOTAL $186,540,498 $0 $175,884,567 $10,655,931 $0 980.5

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $186,540,498 $0 $175,884,567 $10,655,931 $0 980.5 Annualize prior year budget actions 13,446,771 0 0 13,446,771 0 0.0 R2 Tuition spending authority 5,082,277 0 5,082,277 0 0 0.0 R1 State operating funding for public higher education 1,268,563 0 0 1,268,563 0 0.0 Inflationary adjustment for institutions 665,271 0 0 665,271 0 0.0 Employee FTE adjustment 0 0 0 0 0 0.0 Mandatory fee adjustments (720,110) 0 (720,110) 0 0 0.0 TOTAL $206,283,270 $0 $180,246,734 $26,036,536 $0 980.5

INCREASE/(DECREASE) $19,742,772 $0 $4,362,167 $15,380,605 $0 0.0 Percentage Change 10.6% 0.0% 2.5% 144.3% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $209,674,383 $0 $184,206,792 $25,467,591 $0 980.5 Request Above/(Below) Recommendation $3,391,113 $0 $3,960,058 ($568,945) $0 0.0

GOVERNING BOARDS, UNIVERSITY OF NORTHERN COLORADO, UNIVERSITY OF NORTHERN COLORADO TOTAL GENERAL CASH REAPPROPR IATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $125,943,004 $0 $106,126,129 $19,816,875 $0 1,294.6 Long Bill supplemental (10,570,633) 0 (10,570,633) 0 0 0.0 TOTAL $115,372,371 $0 $95,555,496 $19,816,875 $0 1,294.6

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GOVERNING BOARDS, UNIVERSITY OF NORTHERN COLORADO, UNIVERSITY OF NORTHERN COLORADO TOTAL GENERAL CASH REAPPROPR IATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $115,372,371 $0 $95,555,496 $19,816,875 $0 1,294.6 Annualize prior year budget actions 24,912,366 0 0 24,912,366 0 0.0 R1 State operating funding for public higher education 2,350,223 0 0 2,350,223 0 0.0 Inflationary adjustment for institutions 1,110,458 0 0 1,110,458 0 0.0 Employee FTE adjustment 0 0 0 0 0 (137.7) R2 Tuition spending authority (515,316) 0 (515,316) 0 0 0.0 Mandatory fee adjustments (118,450) 0 (118,450) 0 0 0.0 Annualize prior year legislation (75,000) 0 0 (75,000) 0 0.0 TOTAL $143,036,652 $0 $94,921,730 $48,114,922 $0 1,156.9

INCREASE/(DECREASE) $27,664,281 $0 ($633,766) $28,298,047 $0 (137.7) Percentage Change 24.0% 0.0% (0.7%) 142.8% 0.0% (10.6%)

FY 2021-22 EXECUTIVE REQUEST $155,788,052 $0 $108,745,607 $47,042,445 $0 1,294.6 Request Above/(Below) Recommendation $12,751,400 $0 $13,823,877 ($1,072,477) $0 137.7

GOVERNING BOARDS, STATE BOARD FOR COMMUNITY COLLEGES AND OCCUPATIONAL EDUCATION STATE SYSTEM COMMUNITY COLLEGES, STATE BOARD FOR COMMUNITY COLLEGES AND OCCUPATIONAL EDUCATION STATE SYSTEM COMMUNITY COLLEGES TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $395,364,923 $0 $315,172,003 $80,192,920 $0 6,020.8 Long Bill supplemental (11,740,240) 0 (11,740,240) 0 0 0.0 TOTAL $383,624,683 $0 $303,431,763 $80,192,920 $0 6,020.8

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $383,624,683 $0 $303,431,763 $80,192,920 $0 6,020.8 Annualize prior year budget actions 100,628,840 0 0 100,628,840 0 0.0 R1 State operating funding for public 9,493,287 0 0 9,493,287 0 0.0 higher education Inflationary adjustment for institutions 6,216,446 0 0 6,216,446 0 0.0 Mandatory fee adjustments 292,353 0 292,353 0 0 0.0 R5 Restore Cybercoding Cryptology program 117,648 0 0 117,648 0 0.0 Tuition buy down at access institutions 0 0 (7,318,611) 7,318,611 0 0.0 Employee FTE adjustment 0 0 0 0 0 (119.3) Higher Education limited gaming (1,670,379) 0 (1,670,379) 0 0 0.0 adjustment R2 Tuition spending authority (950,155) 0 (950,155) 0 0 0.0 Annualize prior year legislation (75,000) 0 0 (75,000) 0 0.0 TOTAL $497,677,723 $0 $293,784,971 $203,892,752 $0 5,901.5

INCREASE/(DECREASE) $114,053,040 $0 ($9,646,792) $123,699,832 $0 (119.3) Percentage Change 29.7% 0.0% (3.2%) 154.3% 0.0% (2.0%)

FY 2021-22 EXECUTIVE REQUEST $514,696,817 $0 $323,648,462 $191,048,355 $0 6,020.8 Request Above/(Below) Recommendation $17,019,094 $0 $29,863,491 ($12,844,397) $0 119.3

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(6) LOCAL DISTRICT COLLEGE GRANTS PURSUANT TO SECTION 23-71-301, C.R.S.

This division provides funding for grants to Aims Community College and Colorado Mountain College. These institutions also receive tax revenue from local taxing districts which provide the majority of their funding. The source of cash funds is limited gaming revenue distributed to higher education institutions with a 2-year mission. Pursuant to Section 23-18-304 (3), C.R.S., state support for these institutions increases or decreases at the same rate as the average change in funding for the state-operated governing boards that is included in the performance section of the higher education funding model outlined in Section 23-18-303.5; however, funding for the local district colleges may be adjusted to increase more or decrease less.

LOCAL DISTRICT COLLEGE GRANTS PURSUANT TO SECTION 23-71-301, C.R.S. TOTAL GENERAL CASH REAPPROPRIATED FEDERAL

FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 Appropriation FY 2020-21 Appropriation $9,919,040 $8,258,807 $1,660,233 $0 $0 0.0 TOTAL $9,919,040 $8,258,807 $1,660,233 $0 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $9,919,040 $8,258,807 $1,660,233 $0 $0 0.0 R1 State operating funding for public higher education 983,191 983,191 0 0 0 0.0 Inflationary adjustment for institutions 431,526 431,526 0 0 0 0.0 Annualize prior year budget actions 10,421,827 10,421,827 0 0 0 0.0 Higher Education limited gaming adjustment (252,236) 0 (252,236) 0 0 0.0 TOTAL $21,503,348 $20,095,351 $1,407,997 $0 $0 0.0

INCREASE/(DECREASE) $11,584,308 $11,836,544 ($252,236) $0 $0 0.0 Percentage Change 116.8% 143.3% (15.2%) 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $21,324,058 $19,663,825 $1,660,233 $0 $0 0.0 Request Above/(Below) ($179,290) ($431,526) $252,236 $0 $0 0.0 Recommendation

DECISION ITEMS – LOCAL DISTRICT COLLEGE GRANTS

This section includes the following adjustments discussed in previous sections:

• T7, R1, and additional staff recommendations to restore and increase funding for public institutions of higher education • Adjustment to Amendment 50 Gaming Revenue to reflect actual FY 2019-20 amounts

No other adjustments are requested or recommended.

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LINE ITEM DETAIL – LOCAL DISTRICT COLLEGE GRANTS

COLORADO MOUNTAIN COLLEGE

Colorado Mountain College serves the mountain communities in north-central Colorado, with 11 campus locations, including three residential campuses in Leadville, Glenwood Springs, and Steamboat Springs. It served 3,113 student FTE in FY 2019-20. The community college district was formed in 1967. In 2011, the General Assembly authorized it to begin offering selected baccalaureate degrees. In FY 2019-20, local tax district support and other miscellaneous sources of revenue provided 77.1 percent of the college’s education and general revenue, while state support provided 13.8 percent.

STATUTORY AUTHORITY: Sections 23-71-301 and 302 and 23-18-304 (3), C.R.S.

REQUEST: The Department requests $9,752,741 including $9,010,042 from the General Fund.

RECOMMENDATION: The recommendation is shown in the table below.

LOCAL DISTRICT COLLEGE GRANTS PURSUANT TO SECTION 23-71-301, C.R.S., COLORADO MOUNTAIN COLLEGE TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $4,526,917 $3,784,218 $742,699 $0 $0 0.0 TOTAL $4,526,917 $3,784,218 $742,699 $0 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $4,526,917 $3,784,218 $742,699 $0 $0 0.0 Annualize prior year budget actions 4,775,322 4,775,322 0 0 0 0.0 R1 State operating funding for public higher education 450,502 450,502 0 0 0 0.0 Inflationary adjustment for institutions 197,727 197,727 0 0 0 0.0 Higher Education limited gaming adjustment (131,253) 0 (131,253) 0 0 0.0 TOTAL $9,819,215 $9,207,769 $611,446 $0 $0 0.0

INCREASE/(DECREASE) $5,292,298 $5,423,551 ($131,253) $0 $0 0.0 Percentage Change 116.9% 143.3% (17.7%) 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $9,752,741 $9,010,042 $742,699 $0 $0 0.0 Request Above/(Below) Recommendation ($66,474) ($197,727) $131,253 $0 $0 0.0

AIMS COMMUNITY COLLEGE

Aims community college serves the northern Front Range, with campuses in Greeley, Windsor, Fort Lupton, and Loveland. It served 3,875 student FTE in FY 2019-20. In FY 2019-20, local tax district support and other miscellaneous sources of revenue provided 65.8 percent of Aims' education and general revenue, while state support provided 13.8 percent.

STATUTORY AUTHORITY: Sections 23-71-301 and 302 and 23-18-304 (3), C.R.S.

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REQUEST: The Department requests $11,571,317, including $10,653,783 General Fund.

RECOMMENDATION: The recommendation is shown in the table below.

LOCAL DISTRICT COLLEGE GRANTS PURSUANT TO SECTION 23-71-301, C.R.S., AIMS COMMUNITY COLLEGE TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $5,392,123 $4,474,589 $917,534 $0 $0 0.0 TOTAL $5,392,123 $4,474,589 $917,534 $0 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $5,392,123 $4,474,589 $917,534 $0 $0 0.0 Annualize prior year budget actions 5,646,505 5,646,505 0 0 0 0.0 R1 State operating funding for public higher education 532,689 532,689 0 0 0 0.0 Inflationary adjustment for institutions 233,799 233,799 0 0 0 0.0 Higher Education limited gaming adjustment (120,983) 0 (120,983) 0 0 0.0 TOTAL $11,684,133 $10,887,582 $796,551 $0 $0 0.0

INCREASE/(DECREASE) $6,292,010 $6,412,993 ($120,983) $0 $0 0.0 Percentage Change 116.7% 143.3% (13.2%) 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $11,571,317 $10,653,783 $917,534 $0 $0 0.0 Request Above/(Below) Recommendation ($112,816) ($233,799) $120,983 $0 $0 0.0

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(7) DIVISION OF OCCUPATIONAL EDUCATION

The Division is administratively located within the State Board for the Community Colleges and Occupational Education State System Community Colleges and has responsibility for approving programs and maintaining standards for public vocational programs (the Division of Private Occupational Schools in CCHE oversees proprietary schools). The Division also distributes state and federal funds for occupational education.

DIVISION OF OCCUPATIONAL EDUCATION TOTAL GENERAL CASH REAPPROPRIATED FEDERAL

FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 Appropriation FY 2020-21 Appropriation $56,948,679 $5,842,209 $0 $32,240,551 $18,865,919 32.0 TOTAL $56,948,679 $5,842,209 $0 $32,240,551 $18,865,919 32.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $56,948,679 $5,842,209 $0 $32,240,551 $18,865,919 32.0 Inflationary adjustment for institutions 305,257 305,257 0 0 0 0.0 R1 State operating funding for public higher education 695,501 695,501 0 0 0 0.0 Annualize prior year budget actions 7,372,311 7,372,311 0 0 0 0.0 Distribution for Career and Technical Education 466,119 0 0 466,119 0 0.0 TOTAL $65,787,867 $14,215,278 $0 $32,706,670 $18,865,919 32.0

INCREASE/(DECREASE) $8,839,188 $8,373,069 $0 $466,119 $0 0.0 Percentage Change 15.5% 143.3% 0.0% 1.4% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $65,016,491 $13,910,021 $0 $32,240,551 $18,865,919 32.0 Request Above/(Below) ($771,376) ($305,257) $0 ($466,119) $0 0.0 Recommendation

DECISION ITEMS – DIVISION OF OCCUPATIONAL EDUCATION

This section includes the adjustments for T7 and R1, which restore funds for higher education institutions to the FY 2019-20 level, as well as additional staff recommendations discussed at the beginning of the packet for funding for the institutions. Decisions about overall funding for the institutions affects support for the Area Technical Colleges, which receive appropriations in this section.

 LINE ITEMS FOR COLORADO FIRST/EXISTING INDUSTRY JOB TRAINING AND DISTRIBUTION OF STATE ASSISTANCE FOR CAREER AND TECHNICAL EDUCATION PURSUANT TO SECTION 23-8-102, C.R.S.

The line item for Colorado First/Existing Industry Job Training is set in the Governor's Office, and the line item for Distribution of State Assistance for Career and Technical Education is set in the Department of Education. Staff requests permission to set these line items consistent with decisions made during figure setting presentations for these two other departments.

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For FY 2021-22, the Committee’s decision on Colorado First/Existing Industry Job Training program is pending. The Committee has also already approved a total of $28,244,361 for State Assistance for Career and Technical Education, representing the categorical program amount appropriated in the Department of Education that is transferred to this department. This includes an increase of $466,119 over the FY 2020-21 amount.

LINE ITEM DETAIL – DIVISION OF OCCUPATIONAL EDUCATION

(A) ADMINISTRATIVE COSTS

These FTE, located in the community college system, are responsible for approving occupational education programs and distributing funds to both higher education and K-12 entities. The source of reappropriated funds is indirect cost recoveries.

STATUTORY AUTHORITY: 23-8-101, C.R.S., et. seq.

REQUEST: The Department requests continuation of $962,309 reappropriated funds and 9.0 FTE.

RECOMMENDATION: Staff recommends the request for $962,309 reappropriated funds from indirect cost recoveries and 9.0 FTE.

(B) DISTRIBUTION OF STATE ASSISTANCE FOR CAREER AND TECHNICAL EDUCATION PURSUANT TO SECTION 23-8-102, C.R.S.

The appropriation provides state support for secondary students enrolled in vocational programs in school districts across the state. These funds help the school districts offset, in part, the higher cost of vocational education. State statutes and regulations from the Division define the eligible costs for which K-12 schools may apply for reimbursement. The source of reappropriated funds is a transfer from the Department of Education. This is one of the categorical programs covered by Amendment 23. According to a report on the Career and Technical Act, in FY 2015-16 these funds were used to serve 100,552 individual secondary CTE students in 141 public school districts, a special school, eight technical centers, three community colleges, one four-year college and three area technical colleges. In addition there were 23,687 middle school CTE student enrollments.

STATUTORY AUTHORITY: Section 23-8-102, C.R.S.

REQUEST: The Department requests a continuation level of $27,778,242 reappropriated funds.

RECOMMENDATION: The staff recommendation reflects Committee action during figure setting for the Department of Education of $28,244,361 reappropriated funds.

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(C) AREA TECHNICAL COLLEGE SUPPORT

AREA TECHNICAL COLLEGE SUPPORT

This line provides state operating support for the three area technical colleges to provide post- secondary vocational training: Technical College of the Rockies, Emily Griffith Technical College, and Pickens Technical College. In addition to the General Fund shown in the Long Bill, the area technical colleges charge tuition and fees to students. These institutions operate within local school districts and provide vocational training to secondary students with funds from their local school districts, which may include Colorado Vocational Act dollars. The Division in consultation with the colleges determines the distribution of General Fund.

STATUTORY AUTHORITY: Sections 23-71-303 and Section 23-18-304 (2), C.R.S.

REQUEST: The Department requests an appropriation of $13,910,021 General Fund for this line item, including T7 and R1 to restore funding to the FY 2019-20 level.

RECOMMENDATION: The staff recommendation is reflected in the table below and is discussed earlier in this packet.

DIVISION OF OCCUPATIONAL EDUCATION, AREA TECHNICAL COLLEGE SUPPORT, AREA TECHNICAL COLLEGE OPERATING SUPPORT TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $5,842,209 $5,842,209 $0 $0 $0 0.0 TOTAL $5,842,209 $5,842,209 $0 $0 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $5,842,209 $5,842,209 $0 $0 $0 0.0 Annualize prior year budget actions 7,372,311 7,372,311 0 0 0 0.0 R1 State operating funding for public 695,501 695,501 0 0 0 0.0 higher education Inflationary adjustment for institutions 305,257 305,257 0 0 0 0.0 TOTAL $14,215,278 $14,215,278 $0 $0 $0 0.0

INCREASE/(DECREASE) $8,373,069 $8,373,069 $0 $0 $0 0.0 Percentage Change 143.3% 143.3% 0.0% 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $13,910,021 $13,910,021 $0 $0 $0 0.0 Request Above/(Below) Recommendation ($305,257) ($305,257) $0 $0 $0 0.0

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(D) SPONSORED PROGRAMS

The programs in this section are federally funded occupational education programs.

ADMINISTRATION These FTE review educational programs to ensure compliance with federal Perkins requirements and approve courses eligible for federal funds. They also provide training and technical assistance to educators and students.

STATUTORY AUTHORITY: Section 23-60-301, C.R.S.

REQUEST: The Department requests a continuation level of funding of $2,709,888 federal funds and 23.0 FTE for this line item.

RECOMMENDATION: Staff recommends the Department's request for a continuation level of funding of $2,709,888 federal funds and 23.0 FTE.

PROGRAMS

These funds are federal "Carl Perkins" funds, and are distributed to Community Colleges, Local District Junior Colleges, Area Vocational Schools, and K-12 districts.

STATUTORY AUTHORITY: Section 23-60-301, C.R.S.

REQUEST: The Department requests a continuation level of funding of $16,156,031 federal funds for this line item.

RECOMMENDATION: Staff recommends a continuation level of $16,156,031 for this line item. This line item is shown for informational purposes, so appropriations do not constrain spending. Recent actuals are close to this figure. This incorporates an adjustment based on increases in federal allocations in FY 2019-20.

(E) COLORADO FIRST CUSTOMIZED JOB TRAINING

This line item is for General Fund dollars transferred from the Governor's Office for community colleges to provide training to employees of new companies or expanding firms.

STATUTORY AUTHORITY: SECTION 23-60-306, C.R.S.

REQUEST: The Department requests a continuation amount of $3,500,000 reappropriated funds for this line item.

RECOMMENDATION: The staff recommendation is pending the Committee’s decision for the Governor’s Office for this line item. The amount in the Department of Higher Education is transferred from the appropriation to the Governor’s Office.

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(8) AURARIA HIGHER EDUCATION CENTER

The Auraria Higher Education Center (AHEC) collects funds from the institutions with programs on the Auraria campus for operation and maintenance of the campus. Much of the expenses are for fixed costs related to maintaining the buildings and coordinating activities of the co-tenants. The source of reappropriated funds is payments by the three institutions that share the AHEC campus: University of Colorado at Denver, Metropolitan State University of Denver, and the Community College of Denver. Pursuant to statute, institutions’ base payments for support of AHEC are appropriated; however, individual institutions may contract with AHEC for specific additional services, and related AHEC expenditures do not require additional appropriation.

DECISION ITEMS – AURARIA HIGHER EDUCATION CENTER

AURARIA HIGHER EDUCATION CENTER TOTAL GENERAL CASH REAPPROPRIATED FEDERAL

FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 Appropriation FY 2020-21 Appropriation $23,939,958 $0 $0 $23,939,958 $0 189.0 SB 21-109 Auraria Bond Payments 5,500,000 2,750,000 2,750,000 0 0 0.0 TOTAL $29,439,958 $2,750,000 $2,750,000 $23,939,958 $0 189.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $29,439,958 $2,750,000 $2,750,000 $23,939,958 $0 189.0 Annualize prior year legislation (5,500,000) (2,750,000) (2,750,000) 0 0 0.0 Auraria Higher Education Center 100,000 0 0 100,000 0 0.0 Employee FTE adjustment 0 0 0 0 0 11.4 TOTAL $24,039,958 $0 $0 $24,039,958 $0 200.4

INCREASE/(DECREASE) ($5,400,000) ($2,750,000) ($2,750,000) $100,000 $0 11.4 Percentage Change (18.3%) (100.0%) (100.0%) 0.4% 0.0% 6.0%

FY 2021-22 EXECUTIVE REQUEST $24,039,958 $0 $0 $24,039,958 $0 189.0 Request Above/(Below) $0 $0 $0 $0 $0 (11.4) Recommendation

 STAFF AND FACULTY FTE ADJUSTMENT

As previously discussed for the governing boards, the staff recommendation on employee FTE to be reflected in the Long Bill is based on FY 2019-20 actual FTE in the budget data books submitted by the Department. For AHEC, the recommended adjustment is 11.4 FTE.

 INCREASE AHEC SPENDING AUTHORITY

The three institutions that share the Auraria campus work with AHEC to determine fair rates and the allocation of costs among the institutions. These costs typically increase due to inflationary adjustments for salary and benefits and, in some cases, due to the growing student population on the AHEC campus.

For FY 2014-15, staff recommended an increase for AHEC (not included in the executive request), to address the impact of inflationary cost increases on the AHEC budget, as AHEC had capped out

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its spending authority. Since that time, the Department has requested a technical adjustment for inflation. The requested adjustment for FY 2021-22 is $100,000. Staff recommends the requested adjustment. The AHEC budget is primarily driven by rates and services negotiated by the institutions operating on the AHEC campus. In light of this, staff does not believe the Long Bill appropriation needs to be unduly restrictive.

LINE ITEM DETAIL – AURARIA HIGHER EDUCATION CENTER

ADMINISTRATION

REQUEST: The Department requests $28,244,361 reappropriated funds and a continuation level of 189.0 FTE for this line item.

RECOMMENDATION: The staff recommendation is reflected in the table below.

AURARIA HIGHER EDUCATION CENTER, ADMINISTRATION TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $23,939,958 $0 $0 $23,939,958 $0 189.0 TOTAL $23,939,958 $0 $0 $23,939,958 $0 189.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $23,939,958 $0 $0 $23,939,958 $0 189.0 Auraria Higher Education Center 100,000 0 0 100,000 0 0.0 Employee FTE adjustment 0 0 0 0 0 11.4 TOTAL $24,039,958 $0 $0 $24,039,958 $0 200.4

INCREASE/(DECREASE) $100,000 $0 $0 $100,000 $0 11.4 Percentage Change 0.4% 0.0% 0.0% 0.4% 0.0% 6.0%

FY 2021-22 EXECUTIVE REQUEST $24,039,958 $0 $0 $24,039,958 $0 189.0 Request Above/(Below) Recommendation $0 $0 $0 $0 $0 (11.4)

AURARIA HIGHER EDUCATION CENTER BOND PAYMENTS

The Joint Budget Committee is sponsoring S.B. 20-109, which provides authority to use revenue other than auxiliary revenue to make bond payments for auxiliary facilities in FY 2020-21 and FY 2021-22. The bill also provides an appropriation of $2,750,000 General Fund and $2,750,000 from institutional funds paid by the institutions on the Auraria campus for Auraria Higher Education Center bond payments in FY 2020-21. No additional appropriations are requested or recommended for FY 2021-22.

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(9) HISTORY COLORADO

The State Historical Society, now known as History Colorado, is simultaneously a non-profit charitable “501 (c)(3)” organization and an institution of higher education authorized pursuant to Section 24-80-201, C.R.S. Founded in 1879, the agency operates the History Colorado Center in Denver and many other history museums, archeological and historic sites throughout the State. It is charged with preserving the state’s history and documenting it for the benefit of its citizens and it provides a wide variety of services related to this mission. In prior years, over 70 percent of History Colorado’s operating budget has been derived from limited gaming revenue deposited to the State Historical Fund. The 1990 Constitutional amendment that legalized limited stakes gaming in three cities specified that 28 percent of state gaming revenue after administrative expenses would be used for statewide historic preservation efforts. The General Assembly has authorized History Colorado to administer these funds, subject to annual appropriation.

HISTORY COLORADO TOTAL GENERAL CASH REAPPROPRIATED FEDERAL

FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 Appropriation FY 2020-21 Appropriation $33,355,370 $2,280,206 $29,670,508 $422,283 $982,373 120.5 TOTAL $33,355,370 $2,280,206 $29,670,508 $422,283 $982,373 120.5

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $33,355,370 $2,280,206 $29,670,508 $422,283 $982,373 120.5 History Colorado sustainability additional support 1,000,000 1,000,000 0 0 0 0.0 HC1 Financial sustainability for History Colorado 0 0 0 0 0 0.0 HC2 Cumbres and Toltec operating appropriation 21,500 21,500 0 0 0 0.0 Annualize prior year legislation 723 44 693 0 (14) 0.0 Lease purchase payment adjustments 525,209 0 525,209 0 0 0.0 Cumbres and Toltec funding restoration 350,000 350,000 0 0 0 0.0 TOTAL $35,252,802 $3,651,750 $30,196,410 $422,283 $982,359 120.5

INCREASE/(DECREASE) $1,897,432 $1,371,544 $525,902 $0 ($14) 0.0 Percentage Change 5.7% 60.2% 1.8% 0.0% (0.0%) 0.0%

FY 2021-22 EXECUTIVE REQUEST $34,404,285 $2,280,464 $29,267,012 $1,874,415 $982,394 120.5 Request Above/(Below) ($848,517) ($1,371,286) ($929,398) $1,452,132 $35 0.0 Recommendation

ADDITIONAL PROGRAM BACKGROUND

THE STATE HISTORICAL FUND Constitutional Allocations: Article XVIII, Section 9 of the State Constitution, which provides for limited gaming in Central City, Black Hawk, and Cripple Creek, specifies that up to 40 percent of the adjusted gross proceeds from gaming, in addition to license fees, shall be paid by each licensee into the Limited

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Gaming Fund. For the portion of the revenue derived pre-Amendment 50 8, and after deductions for administrative expenses, the Limited Gaming Fund proceeds are distributed as follows: 50 percent to the General Fund or other fund as the General Assembly provides; 28 percent to the State Historical Fund;

12 percent to Gilpin and Teller counties in proportion to the gaming revenues generated in each; 10 percent to the governing bodies of Central City, Black Hawk, and Cripple Creek in proportion to the gaming revenues generated by each.

The Constitution further specifies that, of the amount distributed to the State Historical Fund:

20 percent be used for the preservation and restoration of the three gaming cities; and 80 percent “shall be used for the historic preservation and restoration of historical sites and municipalities throughout the state in a manner to be determined by the general assembly.”

The Constitution and revenues determine the total amount for the State Historical Fund, but within this, the General Assembly has latitude in the use of the funds for statewide grants and other state historic preservation needs, including Historical Society operations and related capital construction projects. Pursuant to Section 12-47.1-1201, C.R.S.:

• the statewide preservation program (a statewide grant program) must constitute the majority share of the 80 percent to be used for statewide preservation activities. • the minority share may be used to support operations of the History Colorado center and regional history museums and facilities throughout the State.

8 Amendment 50 provided for bets up to $100 and provides distributions to higher education institutions.

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Statutory Guidelines: Over the years, the General Assembly has increased its reliance on the State Historical Fund for operation of History Colorado museums and to make various repairs and upgrades to the state Capitol. While consistent with the goals of the State Historical Fund to support historic preservation, these actions reduced the availability of moneys for statewide historic preservation grants.

As outlined Section 12-47.1-1201, C.R.S., the General Assembly has elected: • To direct the “minority share” of revenue that does not go to gaming cities to museum operations and to include the costs of grant program administration in the calculation of “majority share”. “Majority” is interpreted as 50.1 percent for purposes of the agency’s budget.

• To direct a portion of the funds allocated for operations of the State Historical Society (from the “minority share”) to construction of the new Colorado history museum.

• To transfer a portion of the moneys for the statewide grant program (“majority share”) to the Capitol Dome Restoration Fund and other improvements to the State Capitol building.

While limited gaming revenue deposited to the State Historical Fund has been the largest source of funding for the organization, History Colorado operations are also supported by earned revenue from entrance fees, memberships, gift shop sales, programs, donations, some federal grant funding, and the state General Fund.

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FINANCIAL CHALLENGES As a public facing organization, History Colorado has been severely affected by the COVID-19 pandemic, which has had a devastating impact on its major revenue streams. However, even before the pandemic, History Colorado was struggling financially due to a combination of inadequate growth in its primary revenue stream--limited gaming revenues--and the financial burden created by Certificate of Participation payments for the new History Colorado Center.

As part of the decision to rebuild a new Judicial Center in 2008, the General Assembly authorized the Historical Society to execute a lease-purchase agreement for up to $85.0 million in principal, with annual payments not to exceed $4,998,000 to build a new museum. The resulting annual lease- purchase obligation, which will be $3.5 million in FY 2021-22, would have been over 30 percent of the organization’s limited gaming funding stream for museum operations even before the pandemic sharply reduced such revenue.

At the time the COP’s were authorized, History Colorado anticipated that it would be able to cover the lease-purchase payments through increases in earned revenue. It also anticipated that gaming revenue to the organization would continue to increase, as it had in prior years. These expectations were frustrated for several reasons:

• Voters adopted Amendment 50 in November 2008, which created a new category of “extended” limited gaming revenue and, from FY 2009-10, effectively redirected most increases in tax revenue that would previously have gone in part to History Colorado.

• The Great Recession, combined with Limited Gaming Commission policies that reduced gaming tax rates, sharply depressed gaming revenue in FY 2008-09. Although tax rates and overall revenues partially rebounded, the compound average annual growth rate in revenue to History Colorado for the 10 years before the pandemic began was just 1.0 percent per year.

• The new facility did not result in sufficient new paying customers to cover the huge additional lease purchase payment. In the years through FY 2010-11, preceding the museum’s move, earned revenue was typically $1.5 to $1.7 million per year. While earned revenue had increased modestly, earned revenue for the History Colorado Center was just $3.5 million in FY 2018-19, prior to the onset of the pandemic.

As a result of these factors, the organization faced a serious structural imbalance beginning in FY 2013-14, the first full year of lease-purchase payments. Initially, the scale of the imbalance and the implications were not entirely clear to the museum’s Board of Directors or other oversight entities, in part due to other problems at the organization: poor accounting and financial management practices. The institution was the subject of two highly critical audits from the Office of the State Auditor in 2014 which indicated that, among other issues, the organization was not following various standard government accounting practices.

As both financial and management problems became more clear, the organization, Governor and General Assembly worked together to modify the organization’s oversight structure, ultimately giving the Governor (rather than the organization’s membership), authority to select the Board of Directors (S.B. 15-225). JBC budget actions and bills also helped to highlight the key issues during the 2015 legislative session.

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At the beginning of FY 2015-16, a new high-powered Board of Directors with an aggressive turn- around mandate took rapid steps to appoint a new interim management team. Through voluntary early retirements and furloughs and involuntary layoffs the organization reduced personnel (by 26.1 FTE or 20 percent as of June 30, 2016), flattened its management structure, and began to develop additional in-house exhibits, thus eliminating reliance on traveling exhibits from out-of-state.

The organization began rebuilding reserves in FY 2016-17, but its financial situation remained tenuous. During FY 2018-19 History Colorado engaged in a comprehensive strategic planning process under the leadership of Dan Ritchie, former President of the University of Denver. In light of the unanticipated decline in gaming revenue and the high costs of the certificates of participation payments, the resulting Strategic Plan noted that

“the Board of Directors and leadership have stabilized the finances on a year-to-year basis. However, any negative impact from an economic downturn, shift in gaming revenue, increasing State costs that are out of the organization’s control, or urgent construction projects that impact operational revenue could bankrupt the organization.”

With the onset of the COVID-19 pandemic, the organization has been faced with operational and financial threats beyond what even the drafters of the Strategic Plan could have envisioned. The shut- down of casinos dramatically reduced limited gaming revenues in late FY 2019-20, and public health restrictions have kept FY 2020-21 casino operations and related state revenue far below prior years. In addition, the History Colorado museums, including both the History Colorado Center and regional community museums and related in-person programs, closed in March 2020, largely eliminating the agency’s access to its typical sources of earned revenue. Many of the facilities reopened in June, 2020 but have still faced strict capacity limits and periodic closures (the History Colorado Center reopened in early December 2020). While the organization has pivoted to provide additional and different services, such as expanded programs and care services for children, the disruption has been immense.

During the 2020 legislative session, the JBC and the General Assembly took multiple steps to assist History Colorado in balancing its budget. This included making an additional up to $3.0 million in cash funds available for museum operations between FY 2020-21 and FY 2021-22 and allowing appropriations for History Colorado COPs from any source (H.B. 20-1365); adding $1.0 million in General Fund in the Long Bill for operational sustainability in FY 2020-21 for continuation in FY 2021-22; and modifying statutory formulas so that, as gaming revenue rebuilds, the share for History Colorado, as well as the General Fund, rebuilds more quickly (H.B. 20-1400). However, additional assistance is expected to be required.

The table below shows the organization’s most recent forecast. Staff believes it incorporates reasonable estimates and projections. As shown, even with the actions taken to-date, approval of request HC-1 via legislative action, and ongoing efforts to constrain the organization’s operating budget, it faces a $1.7 million budget shortfall in FY 2021-22.

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HISTORY COLORADO 3-YEAR FORECAST - CURRENT (with Projected Revenues and Budgeted Expenditures)

Fore cast REVENUES FY-19 FY-20 FY-21 FY-22 FY-23 Combined Earned Revenue from Operations (1) $4,242,753 $3,653,140 $2,392,149 $3,877,623 $4,071,504 Gaming Revenue - Minority (49.9%)(2) $10,605,239 $10,490,247 $5,691,382 $6,658,917 $7,661,329 History Colorado Sustainability(3) $0 $0 $1,000,000 $1,000,000 $0 General Fund $1,486,463 $1,699,824 $1,713,000 $1,553,587 $1,531,662 Interest $131,376 $117,741 $65,533 $21,000 $24,990 Federal Grant Revenue $1,802,070 $1,391,342 $1,755,081 $1,310,171 $1,232,080 Prior Year Revenue $0 $0 $0 $0 $0 State Historical Fund Indirect Costs Transfer $325,734 $328,778 $324,913 $325,000 $325,000 Other Revenue Sources HC01 - State Historical Fund Funding $0 $0 $0 $930,632 $1,900,000 Reappropriated Funds-OEDIT OAHP Funds $27,429 $75,764 $75,764 $75,100 $75,764 HB 20-1365 Transfers $0 $0 $1,940,000 $0 $0 Georgetown Property Sale $0 $0 $150,294 $0 $0 RISE Grant $0 $0 $230,087 $212,661 $0 Fiscal Year Utilization of Restricted Donations $0 $775,971 $1,692,063 $1,600,000 $1,100,000 SBA - Paycheck Protection Plan(4) $0 $852,846 $1,422,554 $0 $0 Total Revenue $18,621,064 $19,385,653 $18,452,820 $17,564,691 $17,922,329

EXPENSES FY-19 FY-20 FY-21 FY-22 FY-23 Combined Operational Budget(5) $12,268,265 $0 $0 $0 $0 General Fund Expense(5) $1,486,463 $0 $0 $0 $0 Program Service Expense(5) $0 $10,538,237 $10,257,062 $10,227,661 $10,329,938 Support Service Expense(5) $0 $3,550,064 $4,081,439 $4,167,382 $4,209,056 Certificates of Participation (COP) $3,018,314 $3,018,830 $3,021,605 $3,525,841 $3,525,209 Regional Museum Preservation (Controlled Maintenance Transfer to Fund 4610) $451,520 $569,357 $100,000 $310,000 $150,000 Federal Grant Expense $549,449 $277,063 $552,862 $121,431 $175,000 Higher Education Indirect Costs $216,287 $196,130 $161,756 $161,756 $180,000 Common Policies $785,129 $1,101,843 $756,693 $771,870 $598,057 Total Expense $18,775,428 $19,251,524 $18,931,417 $19,285,941 $19,167,260

Annual Revenue to Expense Surplus /(Shortfall) ($154,364) $134,129 ($478,597) ($1,721,250) ($1,244,930)

Beginning Balance $3,056,536 $2,902,172 $3,036,301 $2,557,704 $836,454 Revenue to Expense Surplus (Shortfall) ($154,364) $134,129 ($478,597) ($1,721,250) ($1,244,930) (6) Ending Balance $2,902,172 $3,036,301 $2,557,704 $836,454 ($408,477)

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(1) Earned revenue projections are based upon FY21 first quarter actuals and assume that all of History Colorado’s facilities are permitted to remain open, gradually increase capacity and resume rental gatherings again by FY 2021-22. Consequently, they do not reflect the ongoing facility shutdowns that resumed in November 2020. A continuation of the current pandemic restrictions for any substantial period or a re- imposition of similar restrictions in the future would adversely impact these assumptions and would likely necessitate additional supplemental funding. Please note a 6-month lag is anticipated between when the time when rental events are permitted to resume in FY 2021-22 and when revenues would be expected to increase. It is not anticipated that revenues will return to FY 2019-20 levels until FY 2022-23. Earned revenue estimate for FY 2021-22 is a blended figure between 6 months of actuals from FY 2018-19 and 6 months of actuals from FY 2019-20. FY23

(2) Limited Gaming forecasts are consistent with OSPB's December revenue forecasts. (3) The General Assembly approved an additional $1 million of General Fund support for History Colorado for FY 2020-21 and FY 2021-22. This additional funding is not assumed to continue into beyond FY2021-22 in this forecast. (4) History Colorado received a Small Business Administration- Paycheck Protection Plan (PPP) first draw loan in the amount of $2,275,000. PPP revenue figures are estimates only until forgiveness is received, and History Colorado's cash funds fund PPP expenditures until forgiveness is received and the liability is released. Please note that PPP expenditures were transferred to a non-appropriated line per OSC guidance, which reduces the amount of program services and support services expenses recorded in FY20. History Colorado has applied for a second draw loan but to date has not been approved. (5) All operating expenses, including the General Fund portion of such expenses, are reflected in the Program Service Expense and Support Service Expense lines, regardless of revenue source to align with the Statement of Activities. Please note that fiscal year utilization of restricted donations is also reflected in the Program Services line, which was not previously accounted for prior to FY20. Increase in utilization of restricted donations also increases program services expenditures and total expenditures by the same amount reflected in the revenue section. (6) Fund Balance does not include $1.6M at the Foundation.

DECISION ITEMS – HISTORY COLORADO

 HC-1 FINANCIAL SUSTAINABILITY FOR HISTORY COLORADO [LEGISLATION REQUESTED]

REQUEST: The Executive Branch has requested additional support for History Colorado on an ongoing basis to cover its Certificate of Participation payments. • HC-1 would provide an additional $930,632 in state support for History Colorado in FY 2021-22. This amount would increase to $1,900,000 in FY 2022-23 when the $1,000,000 General Fund added by the JBC for two years (FY 2020-21 and FY 2021-22) is no longer available. • The amount is requested to be specified in legislation and continue through the life of History Colorado’s COP payments (2039) • The request is identified as reappropriated funds redirected from the National Western Center Trust Fund; however, it is more properly understood as a request for General Fund . Under current law (Section 24-75-307 (2), C.R.S.) effective July 1, 2019, the difference between $20.0 million General Fund and the amount required to pay for National Western Certificates of Participation is transferred from the General Fund to the Capitol Complex Master Plan Implementation Fund based on the request of the Capital Development Committee. • As reflected in the spreadsheet below, OSPB anticipates that $13.8 million will be transferred to the Implementation Fund through the end of FY 2020-21, but revenue would then begin to be diverted to History Colorado in FY 2021-22 if the General Assembly adopts legislation consistent with the Executive Request. Specifically, $1,452,132 of the amount that would otherwise be transferred for the Capitol Complex Master Plan in FY 2021-22 will instead be directed to History Colorado and the Cumbres and Toltec Scenic Railroad, and $1.9 million would be diverted to History Colorado in subsequent years.

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Fiscal Year Total Budgeted NWC Debt Service Capitol Complex History Colorado Total Allocated FY 2020 $ 20,000,000 $ 14,047,870 $ 5,952,130 $ - $ 20,000,000 FY 2021 $ 20,000,000 $ 12,127,642 $ 7,872,358 $ - $ 20,000,000 FY 2022* $ 20,000,000 $ 9,860,000 $ 8,687,868 $ 1,452,132 $ 20,000,000 FY 2023 $ 20,000,000 $ 17,496,791 $ 603,209 $ 1,900,000 $ 20,000,000 FY 2024 $ 20,000,000 $ 17,499,348 $ 600,652 $ 1,900,000 $ 20,000,000 FY 2025 $ 20,000,000 $ 17,501,131 $ 598,869 $ 1,900,000 $ 20,000,000 FY 2026 $ 20,000,000 $ 17,501,006 $ 598,994 $ 1,900,000 $ 20,000,000 FY 2027 $ 20,000,000 $ 17,496,631 $ 603,369 $ 1,900,000 $ 20,000,000 FY 2028 $ 20,000,000 $ 17,496,756 $ 603,244 $ 1,900,000 $ 20,000,000 FY 2029 $ 20,000,000 $ 17,499,881 $ 600,119 $ 1,900,000 $ 20,000,000 FY 2030 $ 20,000,000 $ 17,499,631 $ 600,369 $ 1,900,000 $ 20,000,000 FY 2031 $ 20,000,000 $ 17,499,631 $ 600,369 $ 1,900,000 $ 20,000,000 FY 2032 $ 20,000,000 $ 17,498,381 $ 601,619 $ 1,900,000 $ 20,000,000 FY 2033 $ 20,000,000 $ 17,499,256 $ 600,744 $ 1,900,000 $ 20,000,000 FY 2034 $ 20,000,000 $ 17,496,144 $ 603,856 $ 1,900,000 $ 20,000,000 FY 2035 $ 20,000,000 $ 17,499,694 $ 600,306 $ 1,900,000 $ 20,000,000 FY 2036 $ 20,000,000 $ 17,499,394 $ 600,606 $ 1,900,000 $ 20,000,000 FY 2037 $ 20,000,000 $ 17,498,238 $ 601,762 $ 1,900,000 $ 20,000,000 FY 2038 $ 20,000,000 $ 17,499,170 $ 600,830 $ 1,900,000 $ 20,000,000 FY 2039 $ 20,000,000 $ 17,499,898 $ 600,102 $ 1,900,000 $ 20,000,000 Total $ 400,000,000 $ 333,516,496 $ 32,731,372 $ 33,752,132 $ 400,000,000 *FY 2022 amounts for Capitol Complex include both transfers to the Capitol Complex Master Plan Implementation Fund and funds for capitol security improvements; FY 2022 amounts for History Colorado include funds for HC-01 and HC-02 (Cumbres & Toltec Scenic Railroad)

RECOMMENDATION: Staff recommends the Committee sponsor legislation similar to that requested in HC-1 to provide additional long-term funding for History Colorado. Staff anticipates that such legislation would reduce General Fund transfers to the Capitol Complex Master Plan Implementation Fund and instead require General Fund appropriations for History Colorado.

ANALYSIS: Staff assumes that the State will ultimately require General Fund both for Capitol Complex renovations and for paying for History Colorado Certificate of Participation payments (COPs)--the request is effectively trading off support of one for support of the other. However, the History Colorado COPs represent an existing obligation that History Colorado’s finances, even post- pandemic, are unlikely to be able to support. Given the existing long term commitment for History Colorado COPs, the lack of adequate revenue for History Colorado, and no clear alternative for eliminating the COP debt, staff believes this must be recognized as an ongoing General Fund obligation. This additional support of $1.9 million on an ongoing basis will not fully cover the costs of the COPs, which will be $3.5 million in FY 2021-22, increase to $3.8 million in FY 2026-27 and continue to ratchet upward to $5.0 million beginning in FY 2039-40. However, the support will significantly reduce the financial pressure imposed by the COPs on History Colorado operations.

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Note: In this table, FY 2012-13 is reflected as 2012; FY 2021-22 as 2021

The differences between the request and recommendation are largely technical. • The request includes showing “reappropriated” funds in the History Colorado budget. The Long Bill will not show the impact of this proposed legislation in FY 2021-22, even if sponsored by the JBC. All appropriation impacts would be included in the proposed legislation itself.

• In addition, the real proposed source of funding is the General Fund, and staff does not believe it should be presented as something else. Given this, the staff recommendation would be that legislation reduce the statutory transfer to the Capitol Complex Master Plan Implementation Fund by the requested $1.45 million in FY 2021-22 and $1.9 million in FY 2022-23, provide the requested amounts as General Fund appropriations in the bill for History Colorado in FY 2021-22 (as well as for the Cumbres and Toltec Scenic Railroad per HC-2, if the Committee also approves this), and require annual General Fund appropriations of $1.9 million for History Colorado COPs beginning in FY 2022-23. These General Fund appropriations would appear in the annual Long Bill thereafter. The General Assembly would be able to modify its decision to support the COPs in future years, but this would require separate legislation rather than simply an appropriations action.

• Staff would recommend shifting $21,500 of the FY 2021-22 amount that the request identifies as for the Cumbres and Toltec Scenic Railroad to History Colorado. Staff expects to add this $21,500 operating expenditure amount to the Long Bill appropriation for the Railroad. Including operating amounts for the Cumbres and Toltec Railroad in the Long Bill, instead of new legislation, will simplify future budgeting, as well as provide a small overall increase to funding for History Colorado.

 STAFF-INITIATED ADDITIONAL ONE-TIME HISTORY COLORADO SUPPORT

RECOMMENDATION: Staff recommends that the Committee approve an additional $1,000,000 General Fund on a one-time basis in the Long Bill in the History Colorado Sustainability line item. This additional funding was not requested by the Executive Branch.

ANALYSIS: As reflected in the budget provided by History Colorado, above, History Colorado projects a significant deficit for FY 2021-22, even after accounting for the HC-1 request from the Executive Branch. The total has declined from the figures provided in the fall, but History Colorado still faces a shortfall of $1.72 million which will come close to eliminating all remaining History Colorado reserves.

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Staff has not included a larger figure because: • it is likely History Colorado will be able to obtain another PPP loan; and • the projections do not include tapping into an additional option that has already been authorized by the General Assembly through legislation last year: moving up to $1,000,000 from limited gaming preservation grant dollars into the History Colorado operations account in FY 2021-22. Staff understands that this represents a last resort for History Colorado from its perspective, but it can be used to keep the organization from insolvency.

In response to staff questions about additional support from the federal Paycheck Protection program, History Colorado provided the following update on February 26:

“We've applied for a second draw of $2 million in PPP funds with UMB bank and this is in process. This application process is quite a bit more demanding than the first draw…Changes were announced to the PPP loan program this morning that will prioritize small businesses under 20 employees for the next two weeks until March 10th and with the remaining $150 billion. It's unclear yet the effect on applications that were already in process…”

History Colorado also noted is that the PPP loan is not recognized as revenue until it is forgiven and therefore History Colorado must use the fund balances it has available to essentially “float” those expenditures on its books. It expects that its PPP loans will be forgiven, but cannot control the timeline, and any amounts not forgiven would need to be covered by whatever fund balance the organization has available.

POSSIBLE ADDITIONAL ADJUSTMENTS: A remaining question that JBC Staff did not adequately explore with the agency prior to figure setting is how History Colorado has addressed within its forecast the cost increases related to the 2.5 percent Salary Survey increase that has been approved by the Committee. The primary source for such an increase in the past would be limited gaming revenue, and the November 1 common policy templates assume similar assignment of costs to the General Fund and cash funds as in the past. Given the plunge in cash funds available to History Colorado, limited gaming revenue will not be available to cover mandated increases for classified staff. In light of this, staff also requests permission to work with the agency in adjusting funding splits for common policy increases. Staff anticipates that a fund split adjustment that would increase the General Fund share by up to $250,000 may be required. To the extent this is the case, staff will bring a comeback to the Committee.

 HC-2 CUMBRES AND TOLTEC OPERATING APPROPRIATION [LEGISLATION REQUESTED]

REQUEST: The Department requests that, as part of the bill described under HC-1 above, the General Assembly provides an additional one-time appropriation for the Cumbres and Toltec Railroad of $521,500. This includes $500,000 for capital expenditures and $21,500 for operating funding for the Commission.

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RECOMMENDATION: Staff recommends the request, except that the staff recommendation includes providing $500,000 through the requested new legislation and adding $21,500 General Fund to the Commission operating budget.

ANALYSIS: Background: The Cumbres and Toltec Scenic Railroad is jointly owned by the State of New Mexico and the State of Colorado pursuant to a cooperative agreement authorized in Section 24-60-1901, C.R.S. The 64-mile track represents the last remaining portion of an 1880 Denver and Rio Grande line from Alamosa to Durango that was called the San Juan Extension. In 1970 Colorado and New Mexico jointly purchased the portion of track between the small towns of Antonito, Colorado and Chama, New Mexico before it was ripped up by the Denver and Rio Grande.

The states set up an interstate commission to operate the railroad that snakes back and forth across the border as a passenger tourism line. The primary sources of operating funds are ticket and gift shop sales. Both states provide a modest ongoing operating appropriation and have historically provided capital appropriations for larger projects. The railroad is also supported by an associated non-profit, the Friends of the Cumbres and Toltec Scenic Railroad, which coordinates volunteer services focused on equipment and facility maintenance and repair.

The railroad has undergone a variety of management changes but in recent years has been successfully operated by an LLC formed by the Railroad Commission. Until the pandemic, it was carrying approximately 40,000 passengers per year over its 5 month summer operating season. It was also working toward becoming fully self-sufficient, and was expecting that it would no longer require capital support from the State by FY 2023-24.

This situation changed with the pandemic. Earned revenue plummeted due to the pandemic. In addition, funding from Colorado and New Mexico was further curtailed. As part of FY 2020-21 budget balancing, the JBC eliminated the portion of the Railroad appropriation that was designated as intended for capital construction purposes (consistent with a Long Bill footnote). The reduction was $1,146,500 General Fund. However, the Committee also authorized the Commission to roll-forw ard unused capital appropriations from FY 2019-20 and to apply those to operating expenses.

The base budget requested in the Long Bill for FY 2020-21 is a continuation of the FY 2020-21 amount of $218,500 General Fund.

Current Financial Situation: Like all public-facing and tourism-based organizations, the Railroad was dramatically affected by the pandemic. Although it operated in 2020, ridership and revenue was significantly affected. Budget models provided by the Railroad indicate that it expects to operate in the red in FY 2019-20 through FY 2022-23. Based on a federal Paycheck Protection program loan of $600,000 as well as the state support from Colorado rolled forward, it indicated that it expected to be able to manage through FY 2020-21; however, based on the data provided, it remains unclear to staff how it expects to remain solvent through FY 2021-22, even with the additional funding included in the Executive Request. Staff notes that audited statements from the end of FY 2018-19 indicated that the Railroad had unrestricted assets at that time of $1.5 million. Staff assumes these reserves have now been exhausted.

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C&TS Capital Investment Model (02/24/2021) Actuals Upgrade Phase Projections Recovery Phase Projections Totals FY13 FY14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 FY 25 FY 26 FY 27 FY 28 FY 29 FY13-19 FY20-23 FY24-29 FY13-29 Number of Riders 32,081 34,503 35,682 36,170 35,990 40,578 41,870 38,760 12,342 18,525 37,025 40,250 43,500 45,675 47,960 50,350 52,875 256,874 106,652 280,610 644,136 Train Operations [------000------] Train Operations Revenues Ticket Revenues $2,986 $3,334 $3,226 $3,550 $3,771 $4,239 $4,754 $4,015 $1,441 $2,217 $4,542 $5,061 $5,606 $6,034 $6,462 $6,918 $7,413 $25,860 $12,215 $37,494 $75,769 Retail Sales (gross) $191 $182 $301 $358 $399 $443 $458 $390 $144 $235 $470 $512 $553 $587 $617 $648 $681 $2,332 $1,239 $3,598 $7,169 Interest/Other Rev $4 $3 $7 $1 $35 $28 $27 $25 $68 $78 $90 $93 $96 $99 $101 $105 $108 $105 $261 $601 $967 Total Revenue $3,181 $3,519 $3,534 $3,909 $4,205 $4,710 $5,239 $4,430 $1,653 $2,530 $5,102 $5,666 $6,255 $6,720 $7,180 $7,671 $8,202 $28,297 $14,232 $42,529 $83,905 Less Operating Expenses $3,275 $3,096 $3,207 $3,678 $4,087 $4,222 $4,704 $4,250 $2,638 $3,125 $5,250 $5,618 $5,815 $5,952 $6,057 $6,176 $6,574 $26,269 $14,670 $36,192 $77,131 Net Operating Income -$94 $423 $327 $231 $118 $488 $535 $180 -$985 -$595 -$148 $48 $440 $768 $1,123 $1,495 $1,628 $2,028 -$438 $5,362 $6,774 Contigency Fund Alloc. 20% $0 $0 $0 $0 $0 $98 $107 $36 $0 -$119 -$30 $0 $0 $225 $175 $350 $0 $122 -$53 $750 $819 Net After Contigency -$94 $423 $327 $231 $118 $390 $428 $144 -$985 -$476 -$118 $48 $440 $543 $948 $1,145 $1,628 $1,906 -$491 $4,612 $5,955

Capital Investments [------000------] Capital Funding Allocations Track $400 $700 $350 $650 $815 $500 $900 $650 $425 $375 $750 $750 $1,025 $1,025 $525 $500 $500 $4,315 $2,200 $4,325 $10,840 Locomotive Fleet $113 $500 $455 $330 $550 $250 $450 $550 $310 $325 $450 $450 $450 $550 $650 $550 $550 $2,648 $1,635 $3,200 $7,483 Passenger Cars $250 $400 $50 $400 $146 $146 $220 $625 $175 $175 $385 $885 $925 $713 $613 $213 $213 $1,612 $1,360 $3,562 $6,534 Historic Car Fleet $0 $200 $200 $258 $200 $200 $200 $171 $271 $100 $100 $100 $100 $100 $100 $100 $100 $1,258 $642 $600 $2,500 Structures/Others $468 $140 $215 $165 $0 $0 $14 $0 $0 $0 $75 $100 $100 $308 $175 $255 $255 $1,002 $75 $1,193 $2,270 $1,231 $1,940 $1,270 $1,803 $1,711 $1,096 $1,784 $1,996 $1,181 $975 $1,760 $2,285 $2,600 $2,696 $2,063 $1,618 $1,618 $10,835 $5,912 $12,880 $29,627 Funded from Operations $390 $428 $144 -$985 -$476 -$118 $48 $440 $543 $948 $1,145 $1,628 $1,906 -$491 $4,612 $5,955 Net Capital Needs $1,231 $1,940 $1,270 $1,803 $1,711 $706 $1,356 $1,852 $2,166 $1,451 $1,878 $2,237 $2,160 $2,153 $1,115 $473 -$10 $8,929 $6,403 $8,268 $23,672 Capital Outlays [------Appropriated------] ------Projected Requests------Colorado $931 $1,090 $1,085 $1,100 $1,096 $1,096 $1,091 $125 $0 $500 $500 $1,105 $1,073 $1,065 $550 $250 $0 $7,489 $1,125 $4,043 $12,657 New Mexico $300 $850 $185 $645 $615 $0 $750 $1,000 $1,000 $0 $500 $1,100 $1,100 $1,100 $550 $250 $0 $3,345 $2,500 $4,100 $9,945 Balance $0 $0 $0 -$58 $0 $390 $485 -$727 -$1,166 -$951 -$878 -$32 $13 $12 -$15 $27 $10 $1,905 -$2,778 -$125 -$1,070

"What If" Variable Factors: FY20-23 FY24-29 Annual change in ridership -1% 4% Annual increase in yield/rider 4% 2% HPA per-ticket surcharge 7% 7% Annual increase in retail/rider 5% 5% Annual increase in op. costs 5% 3%

Technical Adjustment: The request indicates that, of the total, $21,500 is requested as operating support, reflecting the level the Commission had been using for operating prior to the pandemic. This will increase the ongoing operating support for the Commission to $240,000 General Fund. The origin of the discrepancy between the $218,500 that had been identified in the Long Bill as ongoing operating funds and the $240,000 the Commission has been using for this purpose is unclear. However, staff believes that all parties have been operating in good faith and the adjustment does not seem unreasonable within the scope of this budget and given the other challenges facing the Railroad.

Staff also believes that long-term budgeting will be simplified if the $21,500 is added as General Fund in the Long Bill rather than being included with one-time funding of $500,000 in separate legislation.

 STAFF-INITIATED ADDITIONAL ONE-TIME CUMBRES TOLTEC RAILROAD SUPPORT

RECOMMENDATION: Staff recommends restoring an additional $350,000 General Fund in the Long Bill in support for the Railroad to continue to assist it through this challenging period. To the extent that the General Assembly has resources available (e.g., based on receipt of additional one-time federal funds), staff believes it could also consider a larger figure. To fully restore funding to the FY 2019-20 level would require $625,000 total funds beyond the amount in HC-2.

CUMBRES AND TOLTEC RAILROAD - COLORADO STATE GENERAL FUND APPROPRIATIONS (HC2+STAFF-INITIATED) FY 2021-22 FY 2019-20 FY 2020-21 RECOMMEND Operating $240,000 $218,500 $240,000 Capital 1,125,000 0 850,000 Total $1,365,000 $218,500 $1,090,000

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ANALYSIS: The staff recommendation would restore overall funding for Railroad capital costs to 75.0 percent of the FY 2019-20 level and would restore operating support to 100.0 percent. Staff considerations include the following: • Significant capital expenditures for the Railroad are not discretionary and cannot be deferred. For example, it cannot operate unless it complies with specific federal regulations related to regularly rebuilding its historic engines. • The current operating plan anticipates a 50% improvement in ridership over calendar year 2020 levels, but this would still be about half of the usual level, and operating costs would still exceed revenues. • The Railroad’s projections indicate that it will face a negative position of $951,000 in FY 2021-22, even with the support included in HC2. • Contributions from the State of New Mexico remain uncertain. The Railroad expects funding for operations to be reduced by 5.0 percent from the FY 2020-21 level of $251,300. Capital outlay bills will depend in part on trends in crude oil prices. • Based on the financial projections provided by the Railroad, it remains unclear to staff how it expects to cover its costs in FY 2021-22. However, given that it was previously able to obtain a Paycheck Protection Program loan of $600,000, staff is hopeful that it will again be able to obtain similar support, which could assist in filling any remaining gap in funding.

 GAMING, EARNED, AND INFORMATIONAL REVENUE FOR HISTORY COLORADO

Staff requests permission to adjust the amounts for State Historical Fund Program Grants and Gaming Cities Distributions based on the March 2021 forecast adopted by the Joint Budget Committee. These amounts are informational only, and staff believes it would be helpful for legislators and the public if these were updated to be as accurate as possible.

Staff also requests permission to adjust the informational amount shown for the State of New Mexico in the Cumbres and Toltec Railroad line item to the extent updated information is available.

Please note that staff has not adjusted gaming or earned revenue appropriations in the History Colorado budget to reflect the significant decline in available revenue. Staff anticipates that appropriations may need to be “right sized” in future years. However, given ongoing uncertainty about the impact of the pandemic on overall gaming and earned revenues and the speed at which these will recover, staff believes it is reasonable to retain existing spending authority at this time. To the extent there is not sufficient revenue to support appropriations, the organization will not spend at the appropriated level.

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LINE ITEM DETAIL – HISTORY COLORADO

(A) CENTRAL ADMINISTRATION

CENTRAL ADMINISTRATION

This line item includes funding for the President’s Office and staff. The sources of cash funds are gaming revenues deposited in the Operations Account of the State Historical Fund (“minority share”). Reappropriated funds are from indirect cost collections.

STATUTORY AUTHORITY: Sections 24-80-201through 214 and 12-47.1-1201, C.R.S.

REQUEST: The Department request is for a continuation amount of $1,248,802 total funds.

RECOMMENDATION: Staff recommends the request, as reflected in the table below.

HISTORY COLORADO, CENTRAL ADMINISTRATION, CENTRAL ADMINISTRATION TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $1,248,802 $0 $1,132,460 $0 $116,342 10.0 TOTAL $1,248,802 $0 $1,132,460 $0 $116,342 10.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $1,248,802 $0 $1,132,460 $0 $116,342 10.0 TOTAL $1,248,802 $0 $1,132,460 $0 $116,342 10.0

Percentage Change 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $1,248,802 $0 $1,132,460 $0 $116,342 10.0 Request Above/(Below) Recommendation $0 $0 $0 $0 $0 0.0

FACILITIES MANAGEMENT

This line item includes funding for financial oversight and facilities management for all History Colorado facilities throughout the State. This includes budget, accounting, procurement, asset management planning, maintenance, historic preservation, remodeling, controlled maintenance, and capital construction oversight. The source of cash funds is gaming revenues deposited in the Operations Account of the State Historical Fund (“minority share”).

STATUTORY AUTHORITY: Sections 24-80-201 through 214 and 12-47.1-1201, C.R.S.

REQUEST: The request is for a continuation amount of $1,515,065, cash funds and 8.0 FTE.

RECOMMENDATION: Staff recommends the request is for a continuation amount of $1,515,065, cash funds and 8.0 FTE.

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LEASE PURCHASE OF COLORADO HISTORY MUSEUM

Senate Bill 08-206 authorized the State to enter into lease-purchase agreements for both a new state justice center and a new Colorado state museum. For the history museum, the bill authorized lease purchase (certificate of participation/COP) payments from FY 2011-12 through July 1, 2045 in an annual amount not to exceed $4,998,000. The bill's fiscal note estimated $84,000,000 to be financed through COPs out of the $113.0 million project budget. The museum was financed with a combination of $25.0 million transferred from the Judicial Branch and moneys from the State Historical Fund from the "minority share" now known as the Operations Account of the State Historical Fund. The financing included $11.0 million in up-front transfers from the State Historical Fund and ongoing COP payments from this source. These COP payments have strained History Colorado's resources. COP payments are scheduled to grow to $3,525,209 in FY 2021-2022, $3,827,364 in FY 2026-27, $4,028,812 million in FY 2031-2032, $4,532,410 in FY 2036-2037, and $4,998,000 in FY 2039-40, with the final payment in FY 2044-45

STATUTORY AUTHORITY: Sections 24-80-201 through 214 and 12-47.1-1201, C.R.S.

REQUEST: The request is for $3,546,814 total funds, including an increase in the lease purchase payment for FY 2021-22. The request includes a fund split adjustment to reduce cash funds by $930,632 and substitute $930,632 reappropriated funds pursuant to HC1.

RECOMMENDATION: The recommendation, detailed below, does not include the requested fund split change. Related changes will need to be included in an appropriations adjustment in the new legislation proposed related to HC1 and HC2.

HISTORY COLORADO, CENTRAL ADMINISTRATION, LEASE PURCHASE OF COLORADO HISTORY MUSEUM TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $3,021,605 $0 $3,021,605 $0 $0 0.0 TOTAL $3,021,605 $0 $3,021,605 $0 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $3,021,605 $0 $3,021,605 $0 $0 0.0 Lease purchase payment adjustments 525,209 0 525,209 0 0 0.0 HC1 Financial sustainability for History 0 0 0 0 0 0.0 Colorado TOTAL $3,546,814 $0 $3,546,814 $0 $0 0.0

INCREASE/(DECREASE) $525,209 $0 $525,209 $0 $0 0.0 Percentage Change 17.4% 0.0% 17.4% 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $3,546,814 $0 $2,616,182 $930,632 $0 0.0 Request Above/(Below) Recommendation $0 $0 ($930,632) $930,632 $0 0.0

HISTORY COLORADO SUSTAINABILITY

This line item was added in FY 2020-21 to help address financial challenges resulting from the COVID-19 pandemic.

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STATUTORY AUTHORITY: Sections 24-80-201 through 214 and 12-47.1-1201, C.R.S.

REQUEST: The Department requested continuation of $1,000,000 General Fund in this line item in FY 2021-22, consistent with JBC action for FY 2020-21.

RECOMMENDATION: As discussed above, staff recommends increasing the amount in this line item to $2,000,000 General Fund for FY 2021-22.

HISTORY COLORADO, CENTRAL ADMINISTRATION, HISTORY COLORADO SUSTAINABILITY TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $1,000,000 $1,000,000 $0 $0 $0 0.0 TOTAL $1,000,000 $1,000,000 $0 $0 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $1,000,000 $1,000,000 $0 $0 $0 0.0 History Colorado sustainability additional 1,000,000 1,000,000 0 0 0 0.0 support TOTAL $2,000,000 $2,000,000 $0 $0 $0 0.0

INCREASE/(DECREASE) $1,000,000 $1,000,000 $0 $0 $0 0.0 Percentage Change 100.0% 100.0% 0.0% 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $1,000,000 $1,000,000 $0 $0 $0 0.0 Request Above/(Below) Recommendation ($1,000,000) ($1,000,000) $0 $0 $0 0.0

(B) HISTORY COLORADO MUSEUMS

HISTORY COLORADO CENTER

This line item funds the staff for the History Colorado Center in Denver and associated operating expenses. This includes collections and library services, exhibits and interpretation, and education and public programs, The sources of cash funds are gaming revenues deposited in the in the Operations Account of the State Historical Fund (“minority share”) and cash funds including museum admission fees and user charges deposited to the Enterprise Services Cash Fund.

STATUTORY AUTHORITY: Sections 24-80-201 through 214 and 12-47.1-1201, C.R.S.

REQUEST: The request is for a continuation of $7,787,264 total funds and 45.0 FTE.

RECOMMENDATION: Staff recommends the request, as detailed below.

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HISTORY COLORADO, HISTORY COLORADO MUSEUMS, HISTORY COLORADO CENTER TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $4,787,264 $0 $4,384,275 $325,000 $77,989 45.0 TOTAL $4,787,264 $0 $4,384,275 $325,000 $77,989 45.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $4,787,264 $0 $4,384,275 $325,000 $77,989 45.0 TOTAL $4,787,264 $0 $4,384,275 $325,000 $77,989 45.0

Percentage Change 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $4,787,264 $0 $4,384,275 $325,000 $77,989 45.0 Request Above/(Below) Recommendation $0 $0 $0 $0 $0 0.0

COMMUNITY MUSEUMS

This line item funds the staff and associated operating expenses for regional museums and facilities across the state: the El Pueblo Center, Ute Indian Museum, Trinidad History Museum, Fort Garland, the Byers-Evans House, Healy House/Dexter Cabin, the Grant-Humphreys Mansion, and the Georgetown Loop railroad. The sources of cash funds are gaming revenues deposited in the in the Operations Account of the State Historical Fund and cash funds including museum admission fees and user charges deposited to the Enterprise Services Cash Fund.

STATUTORY AUTHORITY: Sections 24-80-201 through 214 and 12-47.1-1201, C.R.S.

REQUEST: The request is for $2,929,731 total funds, including annualization of S.B. 18-200 (PERA).

RECOMMENDATION: The staff recommendation differs slightly due to different Committee common policy on annualization of S.B. 18-200.

HISTORY COLORADO, HISTORY COLORADO MUSEUMS, COMMUNITY MUSEUMS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $2,927,525 $1,061,706 $1,862,802 $0 $3,017 20.5 TOTAL $2,927,525 $1,061,706 $1,862,802 $0 $3,017 20.5

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $2,927,525 $1,061,706 $1,862,802 $0 $3,017 20.5 Annualize prior year legislation 723 44 693 0 (14) 0.0 TOTAL $2,928,248 $1,061,750 $1,863,495 $0 $3,003 20.5

INCREASE/(DECREASE) $723 $44 $693 $0 ($14) 0.0 Percentage Change 0.0% 0.0% 0.0% 0.0% (0.5%) 0.0%

FY 2021-22 EXECUTIVE REQUEST $2,929,731 $1,061,964 $1,864,729 $0 $3,038 20.5 Request Above/(Below) Recommendation $1,483 $214 $1,234 $0 $35 0.0

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(C) OFFICE OF ARCHEOLOGY AND HISTORIC PRESERVATION

PROGRAM COSTS

The Office of Archeology and Historic Preservation documents, studies and protects Colorado’s historic places, fulfilling statutory responsibilities assigned to the State Archaeologist and the State Historic Preservation Officer to raise public appreciation of cultural resources. This includes encouraging study of the state’s archeological resources, coordinating with federal and state agencies regarding the effects of their actions on historic properties, and preservation planning including designating sites to the State Register of Historic Properties and National Register of Historic Places. The source of cash funds is gaming revenues deposited in the Operations Account of the State Historical Fund (“minority share”).

STATUTORY AUTHORITY: Sections 24-80-201 through 214 and 12-47.1-1201, C.R.S.

REQUEST/ RECOMMENDATION: The request and recommendation are detailed below and reflect a continuation amount.

HISTORY COLORADO, OFFICE OF ARCHEOLOGY AND HISTORIC PRESERVATION, PROGRAM COSTS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $1,616,731 $0 $734,423 $97,283 $785,025 20.0 TOTAL $1,616,731 $0 $734,423 $97,283 $785,025 20.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $1,616,731 $0 $734,423 $97,283 $785,025 20.0 TOTAL $1,616,731 $0 $734,423 $97,283 $785,025 20.0

Percentage Change 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $1,616,731 $0 $734,423 $97,283 $785,025 20.0 Request Above/(Below) Recommendation $0 $0 $0 $0 $0 0.0

(D) STATE HISTORICAL FUND PROGRAM

The State Historical Fund was created by voters through the passage of the 1990 constitutional amendment legalizing limited stakes gaming in Black Hawk, Central City, and Cripple Creek. The amendment requires 28 percent of tax revenue generated be used for historic preservation efforts. This section includes funding for a statewide preservation grant program supported with gaming revenue and funding for a direct distribution for historic preservation to gaming cities, as required by the Constitution.

ADMINISTRATION

The majority of the revenue generated from gaming is to be used for the preservation and restoration of historical sites and municipalities throughout the state. The Historical Society has statutory authority to expend some of these funds to cover the "reasonable costs" of administration. The source

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of cash funds is gaming revenues deposited in the Preservation and Grant Programs Account of the State Historical Fund (“majority share”).

STATUTORY AUTHORITY: Section 12-47.1-1201, C.R.S.

REQUEST/ RECOMMENDATION: The request and recommendation for a continuation amount are detailed below.

HISTORY COLORADO, STATE HISTORICAL FUND PROGRAM, ADMINISTRATION TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $1,763,878 $0 $1,763,878 $0 $0 17.0 TOTAL $1,763,878 $0 $1,763,878 $0 $0 17.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $1,763,878 $0 $1,763,878 $0 $0 17.0 TOTAL $1,763,878 $0 $1,763,878 $0 $0 17.0

Percentage Change 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $1,763,878 $0 $1,763,878 $0 $0 17.0 Request Above/(Below) Recommendation $0 $0 $0 $0 $0 0.0

GRANTS

The majority of the revenue generated from gaming is to be used for the preservation and restoration of historical sites and municipalities throughout the state. These moneys are distributed as grants statewide. Funding is from the “majority share” of gaming revenue deposited to the State Historic Fund. The source of cash funds is gaming revenues deposited in the Preservation and Grant Programs Account of the State Historical Fund (“majority share”). Amounts distributed as grants are continuously appropriated to History Colorado.

STATUTORY AUTHORITY: Section 12-47.1-1201, C.R.S..

REQUEST: The request is for a continuation amount of $8,250,000 cash funds shown for informational purposes. This is a rough estimate of new grants to be made available during the year.

RECOMMENDATION: Staff requests permission to update this line item based on the March 2021 revenue forecast adopted and further discussion with the Department about anticipated awards. This line item is continuously appropriated, so the amount shown does not affect spending. However, it may be helpful for legislators and the public to have a better estimate of funds available for preservation grants.

GAMING CITIES DISTRIBUTION

Twenty percent of revenue generated from gaming and deposited to the State Historical Fund is returned to the gaming cities, pursuant to the state Constitution. Section 12-47.1-1202, C.R.S.,

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establishes standards for the use and administration of the funds by the gaming cities to ensure that expenditures are used as intended for historic restoration and preservation.

STATUTORY AUTHORITY: Sections 12-47.1-1201 and 1202, C.R.S.

REQUEST: History Colorado requests a continuing appropriation of $5,400,000 cash funds for this line item, which represents the anticipated gaming revenue to be allocated to the State Historical Fund and the share allocated to gaming cities based on constitutional provisions..

RECOMMENDATION: Staff requests permission to update this line item based on the March 2021 revenue forecast adopted. This line item is continuously appropriated based on Constitutional provisions, so the amount shown does not affect spending. However, it may be helpful for legislators and the public to have a better estimate of the funds that will be distributed.

INDIRECT COST ASSESSMENTS FOR HISTORY COLORADO ADMINISTRATION

History Colorado maintains an indirect cost collection plan to ensure that the State Historical Fund Program, which receives 50.1 percent of gaming revenue, contributes an appropriate share to central overhead and facilities maintenance costs. Through FY 2019-20, the associated revenue was deposited and spent from the Enterprise Services (earned revenue) fund. Beginning in FY 2020-21, collections will be reflected in this line item and appropriations to central administration line items from the Enterprise Services Fund will be replaced with amounts reappropriated from this line item.

STATUTORY AUTHORITY: Section 12-47.1-1201, C.R.S.

REQUEST: History Colorado requested continuation of $325,000 cash funds for this line item.

RECOMMENDATION: Staff recommends continuation funding of $325,000 cash funds, as requested.

(E) CUMBRES-TOLTEC RAILROAD COMMISSION

This line item funds the state's portion of a cooperative agreement with New Mexico to operate the Cumbres and Toltec Scenic Railroad, pursuant to Section 24-60-1901, C.R.S. The Cumbres and Toltec Railroad is jointly owned by the State of New Mexico and the State of Colorado. The 64-mile track represents the last remaining portion of an 1880 Denver and Rio Grande line from Alamosa to Durango that was called the San Juan Extension. In 1970 Colorado and New Mexico jointly purchased the portion of track between the small towns of Antonito, Colorado and Chama, New Mexico before it was ripped up by the Denver and Rio Grande.

The states set up an interstate commission to operate the railroad that snakes back and forth across the border as a passenger tourism line. The primary sources of operating funds are ticket and gift shop sales. Both states provide a modest ongoing operating appropriation and have historically provided capital appropriations for larger projects. The railroad is also supported by an associated non-profit, the Friends of the Cumbres and Toltec Scenic Railroad, which coordinates volunteer services focused on equipment and facility maintenance and repair.

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The railroad has undergone a variety of management changes but is now successfully operated by an LLC formed by the Railroad Commission.

REQUEST: The Department requests $2,021,000 total funds, including $218,500 General Fund and $521,500 reappropriated funds pursuant to its HC2 request. The balance is estimated cash funds contributions.

RECOMMENDATION: The staff recommendation, described above, would include $500,000 General Fund in separate legislation and add $371,500 General Fund in this line item. Staff also requests permission to adjust the informational amount shown for the State of New Mexico to the extent better information becomes available.

For FY 2021-22, staff does not recommend including the footnote that has historically been provided related to funds for the operating budget versus capital construction, due to the significant uncertainty regarding the Railroad’s overall budget in FY 2021-22. Flexibility between operating and capital outlays was previously authorized for FY 2020-21 expenditure of funds rolled forward from FY 2019-20.

HISTORY COLORADO, CUMBRES AND TOLTEC RAILROAD COMMISSION, CUMBRES AND TOLTEC RAILROAD COMMISSION TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2020-21 APPROPRIATION FY 2020-21 Appropriation $1,499,500 $218,500 $1,281,000 $0 $0 0.0 TOTAL $1,499,500 $218,500 $1,281,000 $0 $0 0.0

FY 2021-22 RECOMMENDED APPROPRIATION FY 2020-21 Appropriation $1,499,500 $218,500 $1,281,000 $0 $0 0.0 Cumbres and Toltec funding restoration 350,000 350,000 0 0 0 0.0 HC2 Cumbres and Toltec operating 21,500 21,500 0 0 0 0.0 appropriation TOTAL $1,871,000 $590,000 $1,281,000 $0 $0 0.0

INCREASE/(DECREASE) $371,500 $371,500 $0 $0 $0 0.0 Percentage Change 24.8% 170.0% 0.0% 0.0% 0.0% 0.0%

FY 2021-22 EXECUTIVE REQUEST $2,021,000 $218,500 $1,281,000 $521,500 $0 0.0 Request Above/(Below) Recommendation $150,000 ($371,500) $0 $521,500 $0 0.0

LONG BILL FOOTNOTES AND REQUESTS FOR INFORMATION

LONG BILL FOOTNOTES

FOOTNOTES OTHER THAN TUITION FOOTNOTES

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Staff recommends CONTINUING the following footnotes (OR CONTINUING THEM AS AMENDED by changes to dates):

29 Department of Higher Education, Colorado Commission on Higher Education and Higher Education Special Purpose Programs, Tuition/Enrollment Contingency -- The Colorado Commission on Higher Education may transfer spending authority from this line item to the Governing Boards if tuition revenues increase beyond appropriated levels. The spending authority for this line item is in addition to the funds appropriated directly to the Governing Boards. It is the General Assembly's intent that the Colorado Commission on Higher Education transfer spending authority from this line item to allow institutions to receive and expend tuition revenue beyond appropriated levels that results from higher than expected enrollment and not to support tuition increases that exceed the assumptions outlined in the footnotes for each governing board.

COMMENT: Staff anticipates that this footnote will only be invoked to the extent there is a need for further “true up” between actual expenditures and the modified FY 2020-21 appropriation at the end of the 2020-21 fiscal year. The FY 2019-20 version of this footnote allowed institutions that had enrollment levels higher than anticipated to receive and spend the associated revenue, as discussed in a related Request for Information response.

31 Department of Higher Education, Colorado Commission on Higher Education Financial Aid, Work Study - Two percent of the Work Study appropriation remains available for expenditure until the close of the 2021-22 2022-23 state fiscal year.

COMMENT: The footnote provides flexibility for the Department to roll forward work-study funds because employment by some students in the summer of the academic year may occur in the next state fiscal year.

35 Department of Higher Education, History Colorado, Central Administration; History Colorado Museums; and Office of Archaeology and Historic Preservation -- History Colorado may transfer up to 10.0 percent of the total amount appropriated in these sections between the sections and among the line items within the sections.

COMMENT: This footnote added flexibility in the History Colorado budget starting in FY 2015-16.

36 Colorado Department of Higher Education, History Colorado, Central Administration, History Colorado Financial Sustainability -- History Colorado may transfer amounts in this line item to other line items within the History Colorado section to address shortfalls in gaming and earned revenue that are expected to result RESULTING from the COVID-19 pandemic.

COMMENT: This footnote was added to a new FY 2020-21 line item that provided $1.0 million General Fund for the agency. The footnote reflects the expectation that History Colorado will transfer the funds as needed to fill revenue holes associated with the COVID-19 pandemic.

TUITION FOOTNOTES:

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Staff recommends the following NEW FOOTNOTES, if the staff recommendation on tuition buy-down is approved:

N Trustees of Metropolitan State University of Denver and State Board for Community Colleges and Occupational Education State System Community Colleges - The amounts in these line items are calculated based on the assumption that no undergraduate student with in-state classification will pay more tuition in 2021-22 than what a student would have paid in FY 2020-21 for the same credit hours and course of study. These amounts are also calculated based on the assumption that each governing board will increase tuition rates for graduate and nonresident students based on its assessment of market conditions. The General Assembly intends to adjust the amounts in these line items through supplemental action during fiscal year 2021-22 based on updated enrollment estimates and tuition rate information.

N Trustees of Colorado Mesa University - The amount in this line item is calculated based on the assumption that no undergraduate student with in-state classification will pay more tuition in 2021-22 than three percent over what a student would have paid in FY 2020-21 for the same credit hours and course of study except for undergraduate student with in-state classification enrolled in career and technical education classes at Colorado Western Community College who will pay no more than the tuition rate in effect for the Colorado Community College System. These amounts are also calculated based on the assumption that each governing board will increase tuition rates for graduate and nonresident students based on its assessment of market conditions. The General Assembly intends to adjust the amounts in these line items through supplemental action during fiscal year 2021-22 based on updated enrollment estimates and tuition rate information.

Staff recommends CONTINUING the following footnotes as amended:

33 Department of Higher Education, Governing Boards, Trustees of Adams State University, Trustees of Colorado Mesa University, Trustees of Metropolitan State University of Denver, Trustees of Western State Colorado University, Board of Governors of the Colorado State University System, Trustees of Fort Lewis College, Regents of the University of Colorado, University of Northern Colorado, State Board for Community Colleges and Occupational Education State System Community Colleges - The amounts in these line items are calculated based on the assumption that no undergraduate student with in-state classification will pay more tuition in 2020-21 2021-22 than three percent over what a student would have paid in FY 2019-20 2020-21 for the same credit hours and course of study. These amounts are also calculated based on the assumption that each governing board will increase tuition rates for graduate and nonresident students based on its assessment of market conditions. The General Assembly intends to adjust the amounts in these line items through supplemental action during fiscal year 2020-21 2021-22 based on updated enrollment estimates and tuition rate information.

34 Department of Higher Education, Governing Boards, Trustees of the Colorado School of Mines -- The cash funds appropriation from tuition in this line item is for informational purposes only. Pursuant to the provisions of 23-41-104.6 (5)(c), C.R.S., the Board of Trustees has authority to establish resident and non-resident tuition rates for the Colorado School of Mines. The General Assembly intends to adjust the amount in this line item through

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supplemental action during fiscal year 2020-21 2021-22 based on updated enrollment estimates and tuition rate information.

COMMENT: Tuition recommendations are discussed earlier in this packet. Staff will adjust these footnotes based on the Committee’s final decisions on undergraduate resident tuition caps.

FOOTNOTES TO BE DISCONTINUED:

Staff recommends ELIMINATING the following footnotes:

27 Department of Higher Education, Department Administrative Office, Health, Life, and Dental -- The General Fund appropriation includes a decrease of $54,884 that is equal to 5.0 percent of the General Fund portion of estimated base salary for the Department. The reduction in this General Fund appropriation is in lieu of a 5.0 percent personal services base reduction and provides the Department with increased flexibility to absorb the reduction and engage in more considered targeted reductions across all department divisions and programs. This reduction is not intended to reduce the Health, Life, and Dental benefit provided to state employees. It is the General Assembly's intent that Health, Life, and Dental costs for employees, as approved in budget actions, be fully paid within personal services appropriations augmented by Department allocations from central benefits appropriations.

COMMENT: This footnote explained assumptions used in determining the amount of the FY 2020- 21 appropriation for Health, Life, and Dental. It is no longer relevant.

28 Colorado Department of Higher Education, Colorado Commission on Higher Education and Higher Education Special Purpose Programs, Division of Private Occupational Schools -- The appropriation in this line item includes an increase of $200,000 cash fund spending authority to support the Division's adoption of a new information technology system. It is the General Assembly's intent that this additional expenditure and ongoing costs estimated at up to $100,000 cash funds per year will not cause fee increases.

COMMENT: This footnote explained the purpose of additional funding and reflected the General Assembly’s intent that a new information technology system that is funded in part from reserves will not result in additional fees on occupational schools regulated by the Division. Staff believes that including this footnote for one time was sufficient.

30 Colorado Department of Higher Education, Colorado Commission on Higher Education Financial Aid, Need Based Grants; Work Study; Special Purpose, Veterans’/Law Enforcement/POS Tuition Assistance, and Tuition Assistance for Career and Technical Education Certificate Programs -- In addition to the existing statutory transfer authority set forth in Section 23-3.3-102 (7), C.R.S., the Department may transfer additional appropriations among these line items, so long as the final amount for any line item is not increased by more than a total amount of thirty percent.

COMMENT: This footnote was added due to uncertainty about how the COVID-19 pandemic would affect institutional operations. In particular, it has been unclear whether Work Study programs would operate as usual or if alternative direct payments of financial aid would be appropriate. The

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Department indicated that it had already used some of this flexibility and would likely use more before the end of the fiscal year. As indications are currently that FY 2021-22 will be a much more typical year, staff does not anticipate that this footnote will be required.

32 Department of Higher Education, College Opportunity Fund Program; Local District Colleges; and Occupational Education, Area Technical Colleges -- The General Fund appropriations for stipends for students attending public institutions, fee-for-service contracts with state institutions pursuant to section 23-18-303, fee-for-service contracts with state institutions for specialty education programs, and grants to local district colleges and area technical colleges are calculated based on a reduction of 58.0 percent. The General Assembly's intent is that for purposes of calculating the FY 2021-22 appropriation, 5.0 percentage points of this reduction will be treated as an ongoing base adjustment, while the remainder will be treated as a one-time adjustment. This calculation does not preclude the executive branch from requesting additional adjustments or the General Assembly from making additional adjustments to FY 2021-22 appropriations during the 2021 legislative session.

COMMENT: This footnote expressed legislative intent with respect to the FY 2020-21 appropriation and FY 2021-22 request for operating support for the public institutions of higher education. This was a one-time footnote.

37 Department of Higher Education, History Colorado, History Colorado Museums, Community Museums -- Of the General Fund appropriation in this line item $411,000 remains available for expenditure until the close of the 2021-22 state fiscal year.

COMMENT: This footnote was added to assist History Colorado in completing a project to update the information technology infrastructure at its community museums by rolling forward unused funds into FY 2021-22. Given the significant financial challenges currently faced by History Colorado, staff does not expect General Fund to be available for roll-forward.

REQUESTS FOR INFORMATION

Staff recommends continuing the following requests AS AMENDED WHERE APPLICABLE:

1 Colorado Department of Higher Education, Colorado Commission on Higher Education, Administration --- The Department, in collaboration with the governing boards, is requested to CONTINUE TO explore the implications of eliminating the current College Opportunity Fund student stipend structure and instead funding the state governing boards solely through fee-for- service contracts. The Department is requested to submit a report by November 1, 2020, September 1, 2021 that addresses the following issues and any other concerns it believes are relevant: RESPONSE IT HAS RECEIVED FROM THE ATTORNEY GENERAL’S OFFICE ON THE IMPLICATIONS OF THIS CHANGE, AND, BASED ON THIS, WHETHER THE DEPARTMENT AND THE GOVERNING BOARDS SUPPORT MAKING THIS TRANSITION. IF SO, THE DEPARTMENT IS REQUESTED TO OUTLINE ANY SPECIFIC RECOMMENDATIONS FOR IMPLEMENTING THE CHANGE, INCLUDING A TIMELINE THAT WILL MINIMIZE DISRUPTIONS TO INSTITUTIONAL OPERATIONS.

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o What administrative processes and costs at the state and institutional level are driven by the current student stipend structure? o How would eliminating the requirement that students apply for stipends affect these processes? Would there be costs or savings associated with such a change? o How does the current system affect students and families? How would changing it affect them? o If the state wished to transition away from the current system, how much time would be required to modify accounting, reporting, and other systems to achieve this? What outreach or education would be required? o One of the benefits of the current system is that it informs students about state support for higher education. Could some other notification on student bills provide the same benefit? o Statutes on concurrent enrollment, early college, and similar programs indicate that higher education institutions are supported for their components of these programs through student stipend payments, while local education providers receive per pupil operating funds. Changes to the higher education funding model are likely to reduce the significance of postsecondary student enrollment in the state higher education funding structure. Eliminating the COF stipend would make this change more visible. Is this a concern? If so, does the Department of Higher Education, after consulting with the Department of Education, school districts, and concurrent enrollment providers, have any suggestions for addressing this? o Currently, students at some private institutions who qualify for financial aid receive a COF stipend for students attending private institutions. Could this funding be moved into the state’s financial aid system? Does the Department have any related concerns?

COMMENT: The Department provided a response on November 1, 2020 that indicated that the institutions find that the current system involves multiple down-sides for students and institutional operations. However, the Department and institutions have continued to express concern about potential legal risks involved in making the change. The Department has solicited an informal opinion from the Attorney General’s Office, but this will not be ready until the end of the legislative session.

2 Department of Higher Education, Colorado Commission on Higher Education, Administration -- The Department is requested to submit a report by November 1 of each year demonstrating that its annual funding request for centrally-appropriated amounts is similar to the amount that would be provided if Department staff were enrolled in state plans. The Department is further requested to submit, as part of the annual request for common policy benefits adjustments, templates that reflect the benefit selection for each member of the Department's staff in a manner that will enable health benefits for these staff to be calculated consistent with common policy. The templates are expected to contain July data on health benefits actually selected by Department staff and relate staff benefit elections to comparable state plan premiums.

COMMENT: This report is used to help confirm that the Department of Higher Education’s benefits and the costs to the state remain reasonably consistent with the costs to the State of providing benefits for other state agencies.

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3 Colorado Department of Higher Education, Colorado Commission on Higher Education, Administration; and Governing Boards -- The Department is requested to coordinate the following annual data submissions to the Joint Budget Committee and Legislative Council Staff to support tuition, fee, and stipend revenue estimates used for appropriations and informational amounts included in the Long Bill.

By November 10, 2020 2021: Submit budget data books for each of the governing boards that provide detail on education and general revenue and expenditures for each institution for the most recent actual year (FY 2019-20) (FY 2020-21) and the current estimate year (FY 2021-22). o Include estimate-year FY 2020-21 FY 2021-22 full time equivalent (FTE) enrollment data for resident undergraduate and graduate students and non-resident undergraduate and graduate students, in addition to actual year FY 2020-21 student FTE data. The FY 2021-22 student FTE estimates should be those used to develop the FY 2021-22 revenue and expenditure estimates in the data books. o Identify actual FY 2019-20 FY 2020-21 and budgeted FY 2020-21 FY 2021-22 student FTE eligible for the College Opportunity Fund (COF) stipend in the budget data book submission. o The Department is requested to provide separately the actual and estimated revenue from mandatory fees using the definitions established by the Department of Higher Education for mandatory fees.

By December 15, 2020 2021: Submit fall 2020 2021 student FTE census data. This should include resident undergraduate and graduate and non-resident undergraduate and graduate FTE figures for each governing board and institutional break-outs for those governing boards that oversee multiple institutions.

By February 15, 2021 2022: Submit revised estimate year FY 2020-21 FY 2021-22 and request year FY 2021-22 FY 2022-23 revenue and enrollment data for each governing board, along with the comparable FY 2020-21 actual data for context. Include data at the institutional level for the University of Colorado and Colorado State University Systems. o For each year, include FTE enrollment and revenue estimates for resident undergraduate and graduate students and non-resident undergraduate and graduate students. The data should clearly separate revenue associated with each of these four categories, where applicable. o Include annotations explaining assumptions, including tuition and fee rate and enrollment assumptions for the FY 2021-22 FY 2022-23 request year. o Consistent with the requirements of Section 23-18-202 (2)(a)(I), C.R.S., also include an update on the number of student FTE estimated to be eligible for COF stipends in FY 2020-21 FY 2021-22 based on the most recent data available (different from the figures used to establish initial stipend appropriations). o Include actual and estimated revenue from mandatory fees using the definitions established by the Department of Higher Education for mandatory fees.

COMMENT: This annual report is important for Legislative Council Staff and JBC Staff for compiling tuition and fee estimates and figure setting for the governing boards.

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4 Department of Higher Education, Colorado Commission on Higher Education, Administration -- The Department should continue its efforts to provide data on the efficiency and effectiveness of state financial aid in expanding access to higher education for Colorado residents. The Department is requested to provide to the Joint Budget Committee by December 1 of each year an evaluation of financial aid programs, which should include, but not be limited to: (1) an estimate of the amount of federal, institutional, and private resources (including tax credits) devoted to financial aid; (2) the number of recipients from all sources; (3) information on typical awards; and (4) the typical debt loads of graduates. The Department is requested to provide more in-depth data on the financial aid awarded at the state's public institutions, by institution. This should include further information on the use of institutional aid, including the extent to which such aid is awarded to residents versus non-residents, for financial need versus merit, and the extent to which merit-based aid is awarded to students who qualify on the basis of need, whether or not the aid was classified as merit-based.

COMMENT: This is an annual report that provides information on financial aid and is used for purposes of briefing the Committee and explaining the value of related state expenditures.

5 Department of Higher Education, Colorado Commission on Higher Education, Special Purpose, Tuition/Enrollment Contingency -- The Department is requested to provide information on the amount of Tuition Enrollment Contingency funds distributed to any governing board and whether the governing board complied with Colorado Commission on Higher Education tuition policy and intended limits on undergraduate rates expressed in Long Bill footnotes. This information, as it applies to actual expenditures in FY 2019-20 FY 2020-21 should be provided by November 1, 2020 2021, and as it applies to actual expenditures in FY 2020-21 FY 2021-22 should be provided by November 1, 2021 2022.

COMMENT: By May 15, governing boards apply for tuition contingency funding with information on the tuition contingency fund requested, the undergraduate resident tuition rate for the year, the reason for needing additional spending authority, and a variation analysis from the most recent tuition appropriation. Any Board that has complied with the tuition limit in the Long Bill and that does not request more than its proportionate share of tuition contingency funding is automatically approved. If a governing board needs spending authority over their proportionate share, CDHE staff determine if there is spending authority remaining. As a last resort, a June 1331 supplemental may be submitted to the Joint Budget Committee.

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INDIRECT COST ASSESSMENTS

DESCRIPTION OF INDIRECT COST ASSESSMENT METHODOLOGY

There are two major components of the Department’s indirect cost methodology: • A component for allocating departmental indirect costs; and • A component for allocating statewide indirect costs, which are significant for this department.

DEPARTMENTAL INDIRECT COST METHODOLOGY

The Department of Higher Education's indirect cost assessment methodology is calculated based on two components: an “Indirect Cost Pool”, and an “Indirect Cost Base.”

The Departmental Indirect Cost Pool is comprised of the FY 2020-21 appropriated amounts for the administrative functions of the Colorado Commission on Higher Education, and its share of central POTS costs. The costs are allocated to the programs, divisions, and Governing Boards using a multi- tiered allocation methodology. The departmental costs allocated in FY 2021-22 total $4,630,445 based on FY 2020-21 appropriations for administrative costs.

Under the methodology adopted in FY 2020-21, costs of services to all entities that benefit from central departmental services are allocated proportionately based on use. This includes a portion of costs that are allocated to “other”/General Assembly and are covered by the General Fund. The allocation of indirect cost collections for FY 2021-22 is shown below.

ALLOCATION OF ADMINISTRATION LINE ITEM FOR DEPARTMENTAL INDIRECT COST COLLECTION PLAN ALLOCATION BASED ON TIME AND EFFORT Public Governing Boards, Local District Colleges 80.6% Area Technical Colleges 1.0% History Colorado 1.4% Legislative/Other (General Fund) 12.3% Division of Private Occupational Schools 1.4% Colorado Opportunity Scholarship Initiative 1.1% GearUp (federal grant) 1.4% My Colorado Journey (contract from CDLE 0.0% CO HELP (private grant) 0.8% Total 100.0%

Whenever a new program is added to departmental administrative responsibilities, either through the Long Bill or through new legislation, the Department is expected to specify how it expects requests for new administrative resources to be treated within the indirect cost collection system in the out years. This applies to decision items and fiscal notes for new legislation. Thus, fiscal notes for some bills may show General Fund in the first year but indicate that out-year costs are anticipated to be covered through indirect cost collections. If the General Assembly is asking for a new report, associated costs might be attributed to the General Fund on an ongoing basis; if the proposal is for funding a new system for collecting financial aid data that saves labor for higher education institutions, out-year costs may be borne entirely by the governing boards. In cases where there may be multiple

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“beneficiaries,” out year costs may be split between the General Fund and indirect cost collections. The Department has developed a set of “decision trees” to assist with this analysis.

For the portion of costs that is allocated to the governing boards, amounts are allocated to each individual governing board based on student FTE, using a three-year rolling average.

DEPARTMENT SHARE OF STATEWIDE INDIRECT COST ASSESSMENT REQUEST

In addition to the Departmental indirect cost pool, the Department is responsible for an allocated share of the statewide indirect cost pool. For this department, the statewide pool and associated indirect cost collections from the governing boards are large. The statewide indirect cost amount for the Department is allocated to the governing boards based upon their usage of state services as calculated by the State Controller’s Office. The FY 2021-22 Plan identifies $3,231,408 in statewide recoverable costs for services provided by the Department of Personnel and the Governor’s Office, among other entities.

USE OF INDIRECT COST COLLECTIONS

Statewide and departmental indirect cost collections are used to offset General Fund otherwise required in the Department. Total indirect cost collections are reflected first in a single indirect cost collections line item. The total is then applied to centrally appropriated amounts for the Commission on Higher Education, administration and special purpose line items for the Commission, administration for occupational education programs and, depending upon sufficient funds available, need based aid funding.

SUMMARY TABLES

The table below summarizes the total amounts recovered in FY 2021 and FY 2022 that are used to offset General Fund otherwise required.

INDIRECT COSTS RECOVERED AND APPLIED: DEPARTMENTAL AND STATEWIDE INDIRECT COST COLLECTIONS

FY 2021 FY 2022 FY 22 Above/(below ) Net General Fund FY 21 Impact

Statewide Indirect Cost Collections $3,386,728 $3,311,377 ($75,351) $75,351 Departmental Indirect Cost Collections 3,981,057 4,050,132 69,075 (69,075) Total - Substantive Changes $7,367,785 $7,361,509 ($6,276) $6,276

One-time adjustment for ATC/LDC transition (95,394) 0 95,394 (95,394) Total $7,272,391 7,361,509 $89,118 ($89,118)

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The table below shows the amount each responsible entity or program is contributing to FY 2021- 22 collections.

FY 2021-22 ASSESSMENTS FY 22 Total Assessment CU System $2,573,494 CSU System 1,333,373 Fort Lewis College 28,892 Adams State University 44,505 Colorado Mesa University 245,084 Western State Colorado University 37,419 Metro State University 432,391 Community College System 1,356,222 U. of Northern CO 326,119 Colorado School of Mines 295,501 Auraria Higher Ed Center 12,551 Aims Community College 75,261 Colorado Mountain College 64,336 Subtotal - Public Boards $6,825,149 Area Technical Colleges 43,164 History Colorado 157,373 Sub-Total External Entities $7,025,686 Legislative/General Fund [not collected] 530,914 Division of Private Occupational Schools 60,429 Colorado Opportunity Scholarship Initiative 47,480 GearUp (federal grant) 60,429 My CO Journey 0 CO Help 34,531 Coll Inv (CSOBA) 12,609 CAN (CSLP) 120,345 Sub-Total Internal $866,738 TOTAL $7,892,424

Excluding Legislative/GF $7,361,509

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FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2021-22 Actual Actual Appropriation Request Recommendation

DEPARTMENT OF HIGHER EDUCATION Angie Paccione, Executive Director (1) DEPARTMENT ADMINISTRATIVE OFFICE re not included in this section. Cash funds are primarily from the State Historical Fund. Reappropriated funds are from indirect cost recoveries. Health, Life, and Dental 1,997,752 2,177,159 2,148,164 2,280,656 2,263,269 * General Fund 99,972 107,097 85,156 217,133 228,089 Cash Funds 1,025,168 1,234,748 1,319,564 1,349,702 1,349,702 Reappropriated Funds 345,127 337,594 339,958 448,564 448,564 Federal Funds 527,485 497,720 403,486 265,257 236,914

Short-term Disability 20,759 20,496 21,860 20,907 21,091 * General Fund 534 551 1,528 1,878 1,905 Cash Funds 10,945 13,379 13,337 12,689 12,983 Reappropriated Funds 4,102 4,261 3,911 4,252 4,271 Federal Funds 5,178 2,305 3,084 2,088 1,932

S.B. 04-257 Amortization Equalization Disbursement 612,341 639,698 701,277 694,492 700,664 * General Fund 15,751 17,746 48,848 63,419 64,288 Cash Funds 322,835 426,771 445,971 431,179 441,184 Reappropriated Funds 121,006 126,538 115,027 133,551 134,140 Federal Funds 152,749 68,643 91,431 66,343 61,052

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FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2021-22 Actual Actual Appropriation Request Recommendation

S.B. 06-235 Supplemental Amortization Equalization Disbursement 612,341 639,698 701,277 694,492 700,664 * General Fund 15,751 17,746 48,848 63,419 64,288 Cash Funds 322,835 426,771 445,971 431,179 441,184 Reappropriated Funds 121,006 126,538 115,027 133,551 134,140 Federal Funds 152,749 68,643 91,431 66,343 61,052

PERA Direct Distribution 0 331,282 0 478,087 478,087 General Fund 0 69,050 0 25,566 25,566 Cash Funds 0 170,290 0 233,519 233,519 Reappropriated Funds 0 91,942 0 152,559 152,559 Federal Funds 0 0 0 66,443 66,443

Salary Survey 398,081 477,673 0 314,877 383,998 * General Fund 10,239 11,562 0 28,890 35,233 Cash Funds 209,874 338,391 0 198,269 241,791 Reappropriated Funds 78,666 82,996 0 60,283 73,515 Federal Funds 99,302 44,724 0 27,435 33,459

Workers' Compensation 80,371 66,402 59,290 58,315 55,884 Cash Funds 45,626 36,616 37,588 37,688 36,117 Reappropriated Funds 34,745 29,786 21,702 20,627 19,767

Legal Services 77,450 137,942 131,281 150,363 150,363 Cash Funds 39,619 88,312 81,373 100,455 100,455 Reappropriated Funds 37,831 49,630 49,908 49,908 49,908

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FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2021-22 Actual Actual Appropriation Request Recommendation

Payment to Risk Management and Property Funds 2,344,510 232,141 162,244 247,090 278,935 General Fund 2,049,082 0 0 0 0 Cash Funds 287,479 224,922 154,315 227,556 259,235 Reappropriated Funds 7,949 7,219 7,929 19,534 19,700

Leased Space 423,247 424,927 424,927 424,927 424,927 Cash Funds 112,960 112,960 112,960 112,960 112,960 Reappropriated Funds 310,287 311,967 311,967 311,967 311,967

Payments to OIT 475,659 744,491 588,706 226,430 226,430 * General Fund 100,000 150,000 147,954 147,954 147,954 Cash Funds 340,754 525,869 382,124 19,848 19,848 Reappropriated Funds 34,905 68,622 58,628 58,628 58,628

CORE Operations 194,026 203,523 274,875 270,871 237,213 Cash Funds 81,643 79,820 106,792 106,792 92,160 Reappropriated Funds 112,383 123,703 168,083 164,079 145,053

Statewide training 0 0 0 3,604 0 * Reappropriated Funds 0 0 0 3,604 0

Administrative Law Judge Services 1,281 796 0 0 0 Cash Funds 1,281 796 0 0 0

TOTAL - (1) Department Administrative Office 7,237,818 6,096,228 5,213,901 5,865,111 5,921,525 FTE 0.0 0.0 0.0 0.0 0.0 General Fund 2,291,329 373,752 332,334 548,259 567,323 Cash Funds 2,801,019 3,679,645 3,099,995 3,261,836 3,341,138 Reappropriated Funds 1,208,007 1,360,796 1,192,140 1,561,107 1,552,212 Federal Funds 937,463 682,035 589,432 493,909 460,852

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FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2021-22 Actual Actual Appropriation Request Recommendation

(2) COLORADO COMMISSION ON HIGHER EDUCATION AND HIGHER EDUCATION SPECIAL PURPOSE PROGRAMS s proprietary institutions, higher education lease purchase payments and capital-related outlays, and a large number of special purpose programs that rely on various funding sources. (A) Administration Administration 3,073,512 3,236,405 3,434,851 3,435,107 3,434,627 FTE 30.0 30.9 30.0 30.0 30.0 General Fund 74,153 92,787 0 0 0 Cash Funds 207,020 35,376 202,082 202,082 202,082 Reappropriated Funds 2,792,339 3,010,123 3,232,769 3,233,025 3,232,545 Federal Funds 0 98,119 0 0 0

SUBTOTAL - (A) Administration 3,073,512 3,236,405 3,434,851 3,435,107 3,434,627 FTE 30.0 30.9 30.0 30.0 30.0 General Fund 74,153 92,787 0 0 0 Cash Funds 207,020 35,376 202,082 202,082 202,082 Reappropriated Funds 2,792,339 3,010,123 3,232,769 3,233,025 3,232,545 Federal Funds 0 98,119 0 0 0

(B) Division of Private Occupational Schools Division of Private Occupational Schools 696,511 728,628 1,011,100 1,011,167 911,124 FTE 9.8 9.8 9.8 9.8 9.8 Cash Funds 696,511 728,628 1,011,100 1,011,167 911,124

SUBTOTAL - (B) Division of Private Occupational Schools 696,511 728,628 1,011,100 1,011,167 911,124 FTE 9.8 9.8 9.8 9.8 9.8 Cash Funds 696,511 728,628 1,011,100 1,011,167 911,124

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FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2021-22 Actual Actual Appropriation Request Recommendation

(C) Special Purpose Western Interstate Commission for Higher Education (WICHE) 153,000 153,000 160,000 159,000 159,000 * Reappropriated Funds 153,000 153,000 160,000 159,000 159,000

WICHE - Optometry 432,700 442,200 376,600 250,575 376,600 * General Fund 0 0 0 0 0 Reappropriated Funds 432,700 442,200 376,600 250,575 376,600

Distribution to Higher Education Competitive Research Authority 1,484,045 1,811,441 2,000,000 2,000,000 2,000,000 Cash Funds 1,484,045 1,811,441 2,000,000 2,000,000 2,000,000

Veterinary School Capital Outlay Support 285,000 285,000 285,000 285,000 285,000 Cash Funds 139,650 139,650 150,768 150,768 143,640 Reappropriated Funds 145,350 145,350 134,232 134,232 141,360

Colorado Geological Survey at the Colorado School of Mines 2,657,351 2,654,853 2,729,100 2,729,100 2,250,018 FTE 15.5 15.5 15.5 15.5 15.5 General Fund 552,296 567,208 567,208 567,208 622,086 Cash Funds 1,755,629 1,628,535 1,803,031 1,803,031 1,627,932 Reappropriated Funds 50,592 51,958 51,958 51,958 0 Federal Funds 298,834 407,152 306,903 306,903 0

Institute of Cannabis Research at CSU-Pueblo 1,652,670 1,740,649 1,000,000 1,000,000 1,800,000 Cash Funds 1,652,670 1,740,649 1,000,000 1,000,000 1,800,000

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FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2021-22 Actual Actual Appropriation Request Recommendation

GEAR-UP 5,000,000 6,084,825 5,000,000 5,000,108 5,000,000 FTE 39.1 39.1 29.1 29.1 29.1 Federal Funds 5,000,000 6,084,825 5,000,000 5,000,108 5,000,000

Prosecution Fellowship Program 356,496 195,496 0 0 356,496 General Fund 356,496 195,496 0 0 356,496

Rural Teacher Recruitment, Retention, and Professional Development 681,050 681,095 709,354 709,373 1,209,357 FTE 0.3 0.3 0.8 0.8 0.8 General Fund 441,050 441,095 709,354 709,373 1,209,357 Reappropriated Funds 240,000 240,000 0 0 0

Open Educational Resources Initiatives 642,875 786,577 961,176 100,838 0 * FTE 0.9 1.0 1.0 1.0 0.0 General Fund 642,875 786,577 961,176 0 0 Reappropriated Funds 0 0 0 100,838 0

Forest Restoration and Wildfire Risk Mitigation Grant Program Cash Fund at Colorado State University 0 1,000,000 1,000,000 1,000,000 1,000,000 General Fund 0 1,000,000 1,000,000 1,000,000 1,000,000

Healthy Forests and Vibrant Communities Fund at Colorado State University 0 0 0 0 0 General Fund 0 0 0 0 0

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FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2021-22 Actual Actual Appropriation Request Recommendation

Colorado Student Leaders Institute Pilot 218,825 132,719 218,825 0 218,825 * FTE 1.0 1.0 1.0 0.0 1.0 General Fund 0 132,719 218,825 0 218,825 Reappropriated Funds 218,825 0 0 0 0

Educator Loan Forgiveness Program 0 123,969 0 2,898,963 0 * FTE 0.0 1.4 0.0 0.5 0.0 General Fund 0 123,969 0 2,898,963 0

Financial Aid Assessment Tool 0 160,764 154,069 154,069 154,069 FTE 0.0 0.2 0.5 0.5 0.5 Reappropriated Funds 0 160,764 154,069 154,069 154,069

RISE Education Innovation Fund 0 0 0 10,000,000 0 * General Fund 0 0 0 10,000,000 0

Growing Great Teachers - Teacher Mentor Grants 0 0 0 0 548,477 FTE 0.0 0.0 0.0 0.0 0.5 General Fund 0 0 0 0 548,477

H.B. 18-1332 Collaborative Educator Preparation Program Grants 725,465 92,787 0 0 0 General Fund 725,465 92,787 0 0 0

H.B. 18-1309 Partnership for Rural Education Preparation at the University of Colorado Denver 78,058 0 0 0 0 General Fund 78,058 0 0 0 0

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SUBTOTAL - (C) Special Purpose 14,367,535 16,345,375 14,594,124 26,287,026 15,357,842 FTE 56.8 58.5 47.9 47.4 47.4 General Fund 2,796,240 3,339,851 3,456,563 15,175,544 3,955,241 Cash Funds 5,031,994 5,320,275 4,953,799 4,953,799 5,571,572 Reappropriated Funds 1,240,467 1,193,272 876,859 850,672 831,029 Federal Funds 5,298,834 6,491,977 5,306,903 5,307,011 5,000,000

(D) Lease Purchase Payments and Capital-related Outlays University of Colorado, Lease Purchase of Academic Facilities at Fitzsimons 14,154,188 14,150,438 14,153,707 14,156,976 14,156,976 * General Fund 2,083,767 1,939,257 7,653,707 7,617,736 8,056,976 General Fund Exempt 5,350,421 5,350,421 0 0 0 Cash Funds 6,720,000 6,860,760 6,500,000 6,539,240 6,100,000

Appropriation to the Higher Education Federal Mineral Lease Revenues Fund for Lease Purchase of Academic Facilities 17,035,263 16,294,250 16,933,244 17,072,238 17,072,238 * General Fund 17,035,263 16,294,250 16,933,244 17,072,238 17,072,238

Lease Purchase of Academic Facilities Pursuant to Section 23-19.9-102 17,664,761 17,408,921 17,433,244 17,432,238 17,432,238 * Cash Funds 650,000 1,114,671 500,000 360,000 360,000 Reappropriated Funds 17,014,761 16,294,250 16,933,244 17,072,238 17,072,238

Annual Depreciation-Lease Equivalent Payment 175,060 2,446,363 0 1 4,689,433 * General Fund 175,060 2,446,363 0 1 4,689,433

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SUBTOTAL - (D) Lease Purchase Payments and Capital-related Outlays 49,029,272 50,299,972 48,520,195 48,661,453 53,350,885 FTE 0.0 0.0 0.0 0.0 0.0 General Fund 19,294,090 20,679,870 24,586,951 24,689,975 29,818,647 General Fund Exempt 5,350,421 5,350,421 0 0 0 Cash Funds 7,370,000 7,975,431 7,000,000 6,899,240 6,460,000 Reappropriated Funds 17,014,761 16,294,250 16,933,244 17,072,238 17,072,238

(E) Tuition/Enrollment Contingency Tuition/Enrollment Contingency 24,578,231 31,238,416 60,000,000 60,000,000 60,000,000 Cash Funds 24,578,231 31,238,416 60,000,000 60,000,000 60,000,000

SUBTOTAL - (E) Tuition/Enrollment Contingency 24,578,231 31,238,416 60,000,000 60,000,000 60,000,000 FTE 0.0 0.0 0.0 0.0 0.0 Cash Funds 24,578,231 31,238,416 60,000,000 60,000,000 60,000,000

(F) Indirect Cost Assessments Indirect Cost Assessments 0 0 7,272,391 7,272,391 7,361,509 Cash Funds 0 0 353,154 353,154 350,758 Reappropriated Funds 0 0 6,813,388 6,813,388 6,915,791 Federal Funds 0 0 105,849 105,849 94,960

SUBTOTAL - (F) Indirect Cost Assessments 0 0 7,272,391 7,272,391 7,361,509 FTE 0.0 0.0 0.0 0.0 0.0 Cash Funds 0 0 353,154 353,154 350,758 Reappropriated Funds 0 0 6,813,388 6,813,388 6,915,791 Federal Funds 0 0 105,849 105,849 94,960

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TOTAL - (2) Colorado Commission on Higher Education and Higher Education Special Purpose Programs 91,745,061 101,848,796 134,832,661 146,667,144 140,415,987 FTE 96.6 99.2 87.7 87.2 87.2 General Fund 22,164,483 24,112,508 28,043,514 39,865,519 33,773,888 General Fund Exempt 5,350,421 5,350,421 0 0 0 Cash Funds 37,883,756 45,298,126 73,520,135 73,419,442 73,495,536 Reappropriated Funds 21,047,567 20,497,645 27,856,260 27,969,323 28,051,603 Federal Funds 5,298,834 6,590,096 5,412,752 5,412,860 5,094,960

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(3) COLORADO COMMISSION ON HIGHER EDUCATION FINANCIAL AID Financial aid programs assist students in covering the cost of higher education. This section includes state appropriations for need based grants, merit based grants, work study, and various special purpose financial aid programs. (A) Need Based Grants Need Based Grants 142,353,951 163,456,542 163,314,446 163,314,446 170,779,765 General Fund 14,096,368 35,849,141 161,994,925 161,994,925 169,891,171 General Fund Exempt 127,287,141 127,287,141 0 0 0 Cash Funds 0 0 0 0 0 Reappropriated Funds 970,442 320,260 1,319,521 1,319,521 888,594 Federal Funds 0 0 0 0 0

SUBTOTAL - (A) Need Based Grants 142,353,951 163,456,542 163,314,446 163,314,446 170,779,765 FTE 0.0 0.0 0.0 0.0 0.0 General Fund 14,096,368 35,849,141 161,994,925 161,994,925 169,891,171 General Fund Exempt 127,287,141 127,287,141 0 0 0 Cash Funds 0 0 0 0 0 Reappropriated Funds 970,442 320,260 1,319,521 1,319,521 888,594 Federal Funds 0 0 0 0 0

(B) Work Study Work Study 22,154,450 22,435,601 23,129,178 23,129,178 23,129,178 General Fund 722,122 1,003,273 23,129,178 23,129,178 23,129,178 General Fund Exempt 21,432,328 21,432,328 0 0 0

SUBTOTAL - (B) Work Study 22,154,450 22,435,601 23,129,178 23,129,178 23,129,178 FTE 0.0 0.0 0.0 0.0 0.0 General Fund 722,122 1,003,273 23,129,178 23,129,178 23,129,178 General Fund Exempt 21,432,328 21,432,328 0 0 0

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(C) Merit Based Grants Merit Based Grants 5,212,249 5,198,860 0 0 General Fund 212,249 198,860 0 0 General Fund Exempt 5,000,000 5,000,000 0 0

SUBTOTAL - (C) Merit Based Grants 5,212,249 5,198,860 0 0 FTE 0.0 0.0 0.0 0.0 General Fund 212,249 198,860 0 0 General Fund Exempt 5,000,000 5,000,000 0 0

(D) Special Purpose Veterans'/Law Enforcement/POW Tuition Assistance 880,145 937,470 956,000 956,000 956,000 General Fund 880,145 937,470 956,000 956,000 956,000

Native American Students/Fort Lewis College 17,024,859 19,626,043 21,790,595 24,680,191 24,045,076 * General Fund 76,665 2,677,849 21,790,595 24,680,191 24,045,076 General Fund Exempt 16,948,194 16,948,194 0 0 0

Colorado Opportunity Scholarship Initiative Fund 17,603,916 17,178,464 6,000,000 6,000,000 6,000,000 * FTE 0.0 0.0 0.0 1.0 0.0 General Fund 3,500,000 2,000,000 6,000,000 6,000,000 6,000,000 General Fund Exempt 5,000,000 5,000,000 0 0 0 Cash Funds 9,103,916 10,178,464 0 0 0

Tuition Assistance for Career and Technical Education Certificate Programs 404,468 368,579 450,000 450,000 450,000 General Fund 404,468 368,579 450,000 450,000 450,000

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H.B. 18-1002 Rural Teaching Fellowship Program 99,230 117,314 0 0 0 FTE 0.5 0.5 0.0 0.0 0.0 General Fund 99,230 117,314 0 0 0

Colorado Second Chance Scholarship 0 105,145 0 0 0 FTE 0.0 0.8 0.0 0.0 0.0 General Fund 0 105,145 0 0 0

SUBTOTAL - (D) Special Purpose 36,012,618 38,333,015 29,196,595 32,086,191 31,451,076 FTE 0.5 1.3 0.0 1.0 0.0 General Fund 4,960,508 6,206,357 29,196,595 32,086,191 31,451,076 General Fund Exempt 21,948,194 21,948,194 0 0 0 Cash Funds 9,103,916 10,178,464 0 0 0

TOTAL - (3) Colorado Commission on Higher Education Financial Aid 205,733,268 229,424,018 215,640,219 218,529,815 225,360,019 FTE 0.5 1.3 0.0 1.0 0.0 General Fund 19,991,247 43,257,631 214,320,698 217,210,294 224,471,425 General Fund Exempt 175,667,663 175,667,663 0 0 0 Cash Funds 9,103,916 10,178,464 0 0 0 Reappropriated Funds 970,442 320,260 1,319,521 1,319,521 888,594 Federal Funds 0 0 0 0 0

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(4) COLLEGE OPPORTUNITY FUND PROGRAM This section includes General Fund appropriations for student stipend payments and for fee-for-service contracts between the Colorado Commission on Higher Education and the governing boards that oversee the state higher education institutions. (A) Stipends Stipends for eligible full-time equivalent students attending state institutions 316,095,217 349,088,289 149,821,087 351,292,326 355,109,572 * General Fund 62,535,373 349,088,289 149,821,087 351,292,326 355,109,572 General Fund Exempt 253,559,844 0 0 0 0 Cash Funds 0 0 0 0 0 Reappropriated Funds 0 0 0 0 0 Federal Funds 0 0 0 0 0

Stipends for eligible full-time equivalent students attending participating private institutions 1,482,831 1,725,840 734,400 1,748,571 1,725,840 * General Fund 39,456 282,465 734,400 1,748,571 1,725,840 General Fund Exempt 1,443,375 1,443,375 0 0 0

SUBTOTAL - (A) Stipends 317,578,048 350,814,129 150,555,487 353,040,897 356,835,412 FTE 0.0 0.0 0.0 0.0 0.0 General Fund 62,574,829 349,370,754 150,555,487 353,040,897 356,835,412 General Fund Exempt 255,003,219 1,443,375 0 0 0 Cash Funds 0 0 0 0 0 Reappropriated Funds 0 0 0 0 0 Federal Funds 0 0 0 0 0

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(B) Fee-for-service Contracts with State Institutions Fee-for-service Contracts with State Institutions Pursuant to Section 23-18-303, C.R.S. 287,734,435 319,730,451 131,082,785 317,526,415 343,164,470 * General Fund 35,666,273 176,089,945 106,668,891 293,112,521 318,750,576 General Fund Exempt 252,068,162 143,640,506 24,413,894 24,413,894 24,413,894

Fee-for-service Contracts with State Institutions for Specialty Education Programs 132,279,160 147,931,042 60,109,272 141,456,893 151,177,406 * General Fund 15,877,462 31,529,344 60,109,272 141,456,893 151,177,406 General Fund Exempt 116,401,698 116,401,698 0 0 0

Limited Purpose Fee-for-Service Contracts with State Institutions 5,436,960 5,907,277 3,693,028 5,693,028 5,443,028 * General Fund 5,436,960 5,907,277 3,693,028 5,693,028 5,443,028

SUBTOTAL - (B) Fee-for-service Contracts with State Institutions 425,450,555 473,568,770 194,885,085 464,676,336 499,784,904 FTE 0.0 0.0 0.0 0.0 0.0 General Fund 56,980,695 213,526,566 170,471,191 440,262,442 475,371,010 General Fund Exempt 368,469,860 260,042,204 24,413,894 24,413,894 24,413,894

TOTAL - (4) College Opportunity Fund Program 743,028,603 824,382,899 345,440,572 817,717,233 856,620,316 FTE 0.0 0.0 0.0 0.0 0.0 General Fund 119,555,524 562,897,320 321,026,678 793,303,339 832,206,422 General Fund Exempt 623,473,079 261,485,579 24,413,894 24,413,894 24,413,894 Cash Funds 0 0 0 0 0 Reappropriated Funds 0 0 0 0 0 Federal Funds 0 0 0 0 0

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(5) GOVERNING BOARDS h funds are primarily from tuition and student fees. Reappropriated funds are initially appropriated as General Fund in the College Opportunity Fund Program section. (A) Trustees of Adams State University Trustees of Adams State College 41,647,603 43,121,901 33,182,045 43,127,816 42,634,148 * FTE 328.6 315.7 329.0 329.0 314.2 Cash Funds 25,813,242 25,841,644 25,924,337 25,985,465 25,102,988 Reappropriated Funds 15,834,361 17,280,257 7,257,708 17,142,351 17,531,160 Federal Funds 0 0 0 0 0

SUBTOTAL - (A) Trustees of Adams State University 41,647,603 43,121,901 33,182,045 43,127,816 42,634,148 FTE 328.6 315.7 329.0 329.0 314.2 Cash Funds 25,813,242 25,841,644 25,924,337 25,985,465 25,102,988 Reappropriated Funds 15,834,361 17,280,257 7,257,708 17,142,351 17,531,160 Federal Funds 0 0 0 0 0

(B) Trustees of Colorado Mesa University Trustees of Colorado Mesa University 108,144,560 110,591,384 86,425,927 115,367,761 104,151,959 * FTE 770.2 764.4 758.0 758.0 742.7 Cash Funds 78,670,367 78,106,425 72,725,892 82,927,333 69,150,185 Reappropriated Funds 29,474,193 32,484,959 13,700,035 32,440,428 35,001,774 Federal Funds 0 0 0 0 0

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SUBTOTAL - (B) Trustees of Colorado Mesa University 108,144,560 110,591,384 86,425,927 115,367,761 104,151,959 FTE 770.2 764.4 758.0 758.0 742.7 Cash Funds 78,670,367 78,106,425 72,725,892 82,927,333 69,150,185 Reappropriated Funds 29,474,193 32,484,959 13,700,035 32,440,428 35,001,774 Federal Funds 0 0 0 0 0

(C) Trustees of Metropolitan State College of Denver Trustees of Metropolitan State College of Denver 195,688,125 214,132,860 168,071,051 212,494,079 212,982,213 * FTE 1,433.5 1,373.8 1,167.2 1,167.2 1,369.1 Cash Funds 137,344,142 149,914,274 141,147,660 148,297,952 143,785,553 Reappropriated Funds 58,343,983 63,969,142 26,923,391 64,196,127 69,196,660 Federal Funds 0 249,444 0 0 0

SUBTOTAL - (C) Trustees of Metropolitan State College of Denver 195,688,125 214,132,860 168,071,051 212,494,079 212,982,213 FTE 1,433.5 1,373.8 1,167.2 1,167.2 1,369.1 Cash Funds 137,344,142 149,914,274 141,147,660 148,297,952 143,785,553 Reappropriated Funds 58,343,983 63,969,142 26,923,391 64,196,127 69,196,660 Federal Funds 0 249,444 0 0 0

(D) Trustees of Western State College Trustees of Western State College 38,919,197 39,265,699 28,678,521 41,027,729 38,286,650 * FTE 265.0 273.2 277.8 277.8 273.8 Cash Funds 24,875,849 24,030,320 22,242,094 25,722,575 22,645,688 Reappropriated Funds 14,043,348 15,235,379 6,436,427 15,305,154 15,640,962 Federal Funds 0 0 0 0 0

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SUBTOTAL - (D) Trustees of Western State College 38,919,197 39,265,699 28,678,521 41,027,729 38,286,650 FTE 265.0 273.2 277.8 277.8 273.8 Cash Funds 24,875,849 24,030,320 22,242,094 25,722,575 22,645,688 Reappropriated Funds 14,043,348 15,235,379 6,436,427 15,305,154 15,640,962 Federal Funds 0 0 0 0 0

(E) Board of Governors of the Colorado State University System Board of Governors of the Colorado State University System 707,441,989 750,879,307 583,587,036 780,877,197 735,872,176 * FTE 4,861.3 4,958.4 5,033.4 5,033.4 5,029.0 Cash Funds 552,583,917 578,500,771 510,958,703 609,006,643 560,100,241 Reappropriated Funds 154,858,072 172,378,536 72,628,333 171,870,554 175,771,935 Federal Funds 0 0 0 0 0

SUBTOTAL - (E) Board of Governors of the Colorado State University System 707,441,989 750,879,307 583,587,036 780,877,197 735,872,176 FTE 4,861.3 4,958.4 5,033.4 5,033.4 5,029.0 Cash Funds 552,583,917 578,500,771 510,958,703 609,006,643 560,100,241 Reappropriated Funds 154,858,072 172,378,536 72,628,333 171,870,554 175,771,935 Federal Funds 0 0 0 0 0

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(F) Trustees of Fort Lewis College Trustees of Fort Lewis College 58,586,317 59,646,566 53,110,557 61,277,835 62,592,901 * FTE 462.3 425.7 437.7 437.7 409.7 General Fund 0 0 0 0 0 Cash Funds 45,533,221 45,510,129 47,173,253 47,245,068 48,243,060 Reappropriated Funds 13,053,096 14,136,437 5,937,304 14,032,767 14,349,841 Federal Funds 0 0 0 0 0

SUBTOTAL - (F) Trustees of Fort Lewis College 58,586,317 59,646,566 53,110,557 61,277,835 62,592,901 FTE 462.3 425.7 437.7 437.7 409.7 General Fund 0 0 0 0 0 Cash Funds 45,533,221 45,510,129 47,173,253 47,245,068 48,243,060 Reappropriated Funds 13,053,096 14,136,437 5,937,304 14,032,767 14,349,841 Federal Funds 0 0 0 0 0

(G) Regents of the University of Colorado Regents of the University of Colorado 1,415,147,387 1,488,118,581 1,277,472,251 1,549,763,718 1,504,223,710 * FTE 9,171.4 9,471.3 10,005.1 10,005.1 9,926.0 General Fund 0 600,000 0 0 0 Cash Funds 1,196,642,368 1,236,677,006 1,176,315,003 1,312,340,829 1,254,865,775 Reappropriated Funds 218,505,019 244,273,926 101,157,248 237,422,889 249,357,935 Federal Funds 0 6,567,649 0 0 0

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SUBTOTAL - (G) Regents of the University of Colorado 1,415,147,387 1,488,118,581 1,277,472,251 1,549,763,718 1,504,223,710 FTE 9,171.4 9,471.3 10,005.1 10,005.1 9,926.0 General Fund 0 600,000 0 0 0 Cash Funds 1,196,642,368 1,236,677,006 1,176,315,003 1,312,340,829 1,254,865,775 Reappropriated Funds 218,505,019 244,273,926 101,157,248 237,422,889 249,357,935 Federal Funds 0 6,567,649 0 0 0

(H) Trustees of the Colorado School of Mines Trustees of the Colorado School of Mines 183,954,544 200,111,465 186,540,498 209,674,383 206,283,270 * FTE 1,008.4 1,078.4 980.5 980.5 980.5 Cash Funds 161,081,051 174,740,200 175,884,567 184,206,792 180,246,734 Reappropriated Funds 22,873,493 25,371,265 10,655,931 25,467,591 26,036,536 Federal Funds 0 0 0 0 0

SUBTOTAL - (H) Trustees of the Colorado School of Mines 183,954,544 200,111,465 186,540,498 209,674,383 206,283,270 FTE 1,008.4 1,078.4 980.5 980.5 980.5 Cash Funds 161,081,051 174,740,200 175,884,567 184,206,792 180,246,734 Reappropriated Funds 22,873,493 25,371,265 10,655,931 25,467,591 26,036,536 Federal Funds 0 0 0 0 0

(I) University of Northern Colorado University of Northern Colorado 153,911,011 153,214,028 115,372,371 155,788,052 143,036,652 * FTE 1,360.7 1,370.2 1,294.6 1,294.6 1,156.9 Cash Funds 111,418,285 105,916,228 95,555,496 108,745,607 94,921,730 Reappropriated Funds 42,492,726 47,079,464 19,816,875 47,042,445 48,114,922 Federal Funds 0 218,336 0 0 0

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SUBTOTAL - (I) University of Northern Colorado 153,911,011 153,214,028 115,372,371 155,788,052 143,036,652 FTE 1,360.7 1,370.2 1,294.6 1,294.6 1,156.9 Cash Funds 111,418,285 105,916,228 95,555,496 108,745,607 94,921,730 Reappropriated Funds 42,492,726 47,079,464 19,816,875 47,042,445 48,114,922 Federal Funds 0 218,336 0 0 0

(J) State Board for Community Colleges and Occupational Education State System Community Colleges State Board for Community Colleges and Occupational Education State System Community Colleges 480,421,198 498,809,651 383,624,683 514,696,817 497,677,723 * FTE 6,050.9 5,831.4 6,020.8 6,020.8 5,901.5 Cash Funds 308,349,152 308,361,956 303,431,763 323,648,462 293,784,971 Reappropriated Funds 172,072,046 190,447,695 80,192,920 191,048,355 203,892,752 Federal Funds 0 0 0 0 0

SUBTOTAL - (J) State Board for Community Colleges and Occupational Education State System Community Colleges 480,421,198 498,809,651 383,624,683 514,696,817 497,677,723 FTE 6,050.9 5,831.4 6,020.8 6,020.8 5,901.5 Cash Funds 308,349,152 308,361,956 303,431,763 323,648,462 293,784,971 Reappropriated Funds 172,072,046 190,447,695 80,192,920 191,048,355 203,892,752 Federal Funds 0 0 0 0 0

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TOTAL - (5) Governing Boards 3,383,861,931 3,557,891,442 2,916,064,940 3,684,095,387 3,547,741,402 FTE 25,712.3 25,862.5 26,304.1 26,304.1 26,103.4 General Fund 0 600,000 0 0 0 Cash Funds 2,642,311,594 2,727,598,953 2,571,358,768 2,868,126,726 2,692,846,925 Reappropriated Funds 741,550,337 822,657,060 344,706,172 815,968,661 854,894,477 Federal Funds 0 7,035,429 0 0 0

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(6) LOCAL DISTRICT COLLEGE GRANTS PURSUANT TO SECTION 23-71-301, C.R.S. by boards elected by tax district residents. Students from the districts pay discounted tuition rates. Colorado Mountain College 8,649,950 9,906,248 4,526,917 9,752,741 9,819,215 * General Fund 2,078,228 2,969,022 3,784,218 9,010,042 9,207,769 General Fund Exempt 6,041,020 6,041,020 0 0 0 Cash Funds 530,702 742,699 742,699 742,699 611,446 Reappropriated Funds 0 0 0 0 0 Federal Funds 0 153,507 0 0 0

Aims Community College 10,248,586 11,450,334 5,392,123 11,571,317 11,684,133 * General Fund 3,005,997 4,044,478 4,474,589 10,653,783 10,887,582 General Fund Exempt 6,609,305 6,609,305 0 0 0 Cash Funds 633,284 796,551 917,534 917,534 796,551 Federal Funds 0 0 0 0 0

TOTAL - (6) Local District College Grants Pursuant to Section 23-71-301, C.R.S. 18,898,536 21,356,582 9,919,040 21,324,058 21,503,348 FTE 0.0 0.0 0.0 0.0 0.0 General Fund 5,084,225 7,013,500 8,258,807 19,663,825 20,095,351 General Fund Exempt 12,650,325 12,650,325 0 0 0 Cash Funds 1,163,986 1,539,250 1,660,233 1,660,233 1,407,997 Reappropriated Funds 0 0 0 0 0 Federal Funds 0 153,507 0 0 0

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FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2021-22 Actual Actual Appropriation Request Recommendation

(7) DIVISION OF OCCUPATIONAL EDUCATION hese funds consistent with state and federal law. Most reappropriated funds are from transfers from the Governor's Office of Economic Development and the Department of Education. (A) Administrative Costs Administrative Costs 900,000 962,309 962,309 962,309 962,309 FTE 9.0 9.0 9.0 9.0 9.0 Reappropriated Funds 900,000 962,309 962,309 962,309 962,309

SUBTOTAL - (A) Administrative Costs 900,000 962,309 962,309 962,309 962,309 FTE 9.0 9.0 9.0 9.0 9.0 Reappropriated Funds 900,000 962,309 962,309 962,309 962,309

(B) Distribution of State Assistance for Career and Technical Education pursuant to Section 23-8-102, C.R.S. Distributions of State Assistance for Career and Technical Education 26,675,279 27,238,323 27,778,242 27,778,242 28,244,361 Reappropriated Funds 26,675,279 27,238,323 27,778,242 27,778,242 28,244,361

SUBTOTAL - (B) Distribution of State Assistance for Career and Technical Education pursuant to Section 23-8-102, C.R.S. 26,675,279 27,238,323 27,778,242 27,778,242 28,244,361 FTE 0.0 0.0 0.0 0.0 0.0 Reappropriated Funds 26,675,279 27,238,323 27,778,242 27,778,242 28,244,361

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FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2021-22 Actual Actual Appropriation Request Recommendation

(C) Area Technical College Support Area Technical College Operating Support 12,311,435 14,578,340 5,842,209 13,910,021 14,215,278 * General Fund 4,219,590 5,818,176 5,842,209 13,910,021 14,215,278 General Fund Exempt 8,091,845 8,091,845 0 0 0 Cash Funds 0 0 0 0 0 Federal Funds 0 668,319 0 0 0

Area Technical College Capital Grants 0 0 0 0 0 General Fund 0 0 0 0 0

SUBTOTAL - (C) Area Technical College Support 12,311,435 14,578,340 5,842,209 13,910,021 14,215,278 FTE 0.0 0.0 0.0 0.0 0.0 General Fund 4,219,590 5,818,176 5,842,209 13,910,021 14,215,278 General Fund Exempt 8,091,845 8,091,845 0 0 0 Cash Funds 0 0 0 0 0 Federal Funds 0 668,319 0 0 0

(D) Sponsored Programs Administration 3,632,270 2,709,888 2,709,888 2,709,888 2,709,888 FTE 23.0 23.0 23.0 23.0 23.0 Federal Funds 3,632,270 2,709,888 2,709,888 2,709,888 2,709,888

Programs 15,866,077 15,439,874 16,156,031 16,156,031 16,156,031 Federal Funds 15,866,077 15,439,874 16,156,031 16,156,031 16,156,031

SUBTOTAL - (D) Sponsored Programs 19,498,347 18,149,762 18,865,919 18,865,919 18,865,919 FTE 23.0 23.0 23.0 23.0 23.0 Federal Funds 19,498,347 18,149,762 18,865,919 18,865,919 18,865,919

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FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2021-22 Actual Actual Appropriation Request Recommendation

(E) Colorado First Customized Job Training Colorado First Customized Job Training 4,500,000 4,500,000 3,500,000 3,500,000 3,500,000 Reappropriated Funds 4,500,000 4,500,000 3,500,000 3,500,000 3,500,000

SUBTOTAL - (E) Colorado First Customized Job Training 4,500,000 4,500,000 3,500,000 3,500,000 3,500,000 FTE 0.0 0.0 0.0 0.0 0.0 Reappropriated Funds 4,500,000 4,500,000 3,500,000 3,500,000 3,500,000

TOTAL - (7) Division of Occupational Education 63,885,061 65,428,734 56,948,679 65,016,491 65,787,867 FTE 32.0 32.0 32.0 32.0 32.0 General Fund 4,219,590 5,818,176 5,842,209 13,910,021 14,215,278 General Fund Exempt 8,091,845 8,091,845 0 0 0 Cash Funds 0 0 0 0 0 Reappropriated Funds 32,075,279 32,700,632 32,240,551 32,240,551 32,706,670 Federal Funds 19,498,347 18,818,081 18,865,919 18,865,919 18,865,919

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FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2021-22 Actual Actual Appropriation Request Recommendation

(8) AURARIA HIGHER EDUCATION CENTER olitan State University of Denver, and the University of Colorado at Denver. Reappropriated funds are from the three governing boards that share the AHEC campus. Administration 22,395,029 21,514,461 23,939,958 24,039,958 24,039,958 * FTE 188.1 188.5 189.0 189.0 200.4 Cash Funds 0 0 0 0 0 Reappropriated Funds 22,395,029 21,514,461 23,939,958 24,039,958 24,039,958 Federal Funds 0 0 0 0 0

Auraria Higher Education Center Bond Payments 0 0 5,500,000 0 0 General Fund 0 0 2,750,000 0 0 Cash Funds 0 0 2,750,000 0 0

TOTAL - (8) Auraria Higher Education Center 22,395,029 21,514,461 29,439,958 24,039,958 24,039,958 FTE 188.1 188.5 189.0 189.0 200.4 General Fund 0 0 2,750,000 0 0 Cash Funds 0 0 2,750,000 0 0 Reappropriated Funds 22,395,029 21,514,461 23,939,958 24,039,958 24,039,958 Federal Funds 0 0 0 0 0

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FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2021-22 Actual Actual Appropriation Request Recommendation

(9) HISTORY COLORADO ing revenues that are deposited to various State Historic Fund accounts, museum revenues, gifts, and grants. (A) Central Administration Central Administration 1,885,205 1,417,825 1,248,802 1,248,802 1,248,802 FTE 12.0 10.0 10.0 10.0 10.0 General Fund 0 0 0 0 0 Cash Funds 1,460,041 1,350,044 1,132,460 1,132,460 1,132,460 Reappropriated Funds 0 0 0 0 0 Federal Funds 425,164 67,781 116,342 116,342 116,342

Facilities Management 1,783,851 1,374,409 1,515,065 1,515,065 1,515,065 FTE 10.2 8.8 8.0 8.0 8.0 Cash Funds 1,783,851 1,374,409 1,515,065 1,515,065 1,515,065 Reappropriated Funds 0 0 0 0 0 Federal Funds 0 0 0 0 0

Lease Purchase of Colorado History Museum 3,018,314 3,018,830 3,021,605 3,546,814 3,546,814 * Cash Funds 3,018,314 3,018,830 3,021,605 2,616,182 3,546,814 Reappropriated Funds 0 0 0 930,632 0

History Colorado Strategic Plan Initiatives 0 0 1,000,000 1,000,000 2,000,000 FTE 0.0 0.0 0.0 0.0 0.0 General Fund 0 0 1,000,000 1,000,000 2,000,000

9-Mar-2021 219 HED-fig JBC Staff Staff Figure Setting - FY 2021-22 Staff Working Document - Does Not Represent Committee Decision

FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2021-22 Actual Actual Appropriation Request Recommendation

SUBTOTAL - (A) Central Administration 6,687,370 5,811,064 6,785,472 7,310,681 8,310,681 FTE 22.2 18.8 18.0 18.0 18.0 General Fund 0 0 1,000,000 1,000,000 2,000,000 Cash Funds 6,262,206 5,743,283 5,669,130 5,263,707 6,194,339 Reappropriated Funds 0 0 0 930,632 0 Federal Funds 425,164 67,781 116,342 116,342 116,342

(B) History Colorado Museums History Colorado Center 5,371,244 4,306,145 4,787,264 4,787,264 4,787,264 FTE 43.5 56.1 45.0 45.0 45.0 Cash Funds 4,821,874 4,187,258 4,384,275 4,384,275 4,384,275 Reappropriated Funds 0 0 325,000 325,000 325,000 Federal Funds 549,370 118,887 77,989 77,989 77,989

Community Museums 3,295,415 2,358,552 2,927,525 2,929,731 2,928,248 FTE 20.5 24.0 20.5 20.5 20.5 General Fund 1,383,675 1,406,031 1,061,706 1,061,964 1,061,750 Cash Funds 1,895,841 952,021 1,862,802 1,864,729 1,863,495 Reappropriated Funds 15,839 0 0 0 0 Federal Funds 60 500 3,017 3,038 3,003

SUBTOTAL - (B) History Colorado Museums 8,666,659 6,664,697 7,714,789 7,716,995 7,715,512 FTE 64.0 80.1 65.5 65.5 65.5 General Fund 1,383,675 1,406,031 1,061,706 1,061,964 1,061,750 Cash Funds 6,717,715 5,139,279 6,247,077 6,249,004 6,247,770 Reappropriated Funds 15,839 0 325,000 325,000 325,000 Federal Funds 549,430 119,387 81,006 81,027 80,992

9-Mar-2021 220 HED-fig JBC Staff Staff Figure Setting - FY 2021-22 Staff Working Document - Does Not Represent Committee Decision

FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2021-22 Actual Actual Appropriation Request Recommendation

(C) Office of Archeology and Historic Preservation Program Costs 1,785,785 1,310,217 1,616,731 1,616,731 1,616,731 FTE 16.5 20.0 20.0 20.0 20.0 Cash Funds 661,891 188,454 734,423 734,423 734,423 Reappropriated Funds 81,444 75,764 97,283 97,283 97,283 Federal Funds 1,042,450 1,045,999 785,025 785,025 785,025

SUBTOTAL - (C) Office of Archeology and Historic Preservation 1,785,785 1,310,217 1,616,731 1,616,731 1,616,731 FTE 16.5 20.0 20.0 20.0 20.0 Cash Funds 661,891 188,454 734,423 734,423 734,423 Reappropriated Funds 81,444 75,764 97,283 97,283 97,283 Federal Funds 1,042,450 1,045,999 785,025 785,025 785,025

(D) State Historical Fund Program Administration 1,668,788 1,553,409 1,763,878 1,763,878 1,763,878 FTE 13.8 15.0 17.0 17.0 17.0 Cash Funds 1,668,788 1,553,409 1,763,878 1,763,878 1,763,878 Reappropriated Funds 0 0 0 0 0 Federal Funds 0 0 0 0 0

Grants 9,711,981 9,912,828 8,250,000 8,250,000 8,250,000 Cash Funds 9,711,981 9,912,828 8,250,000 8,250,000 8,250,000

Gaming Cities Distribution 5,313,246 5,255,635 5,400,000 5,400,000 5,400,000 Cash Funds 5,313,246 5,255,635 5,400,000 5,400,000 5,400,000

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FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2021-22 Actual Actual Appropriation Request Recommendation

Indirect Cost Assessments for History Colorado Administration 0 0 325,000 325,000 325,000 Cash Funds 0 0 325,000 325,000 325,000

SUBTOTAL - (D) State Historical Fund Program 16,694,015 16,721,872 15,738,878 15,738,878 15,738,878 FTE 13.8 15.0 17.0 17.0 17.0 Cash Funds 16,694,015 16,721,872 15,738,878 15,738,878 15,738,878 Reappropriated Funds 0 0 0 0 0 Federal Funds 0 0 0 0 0

(E) Cumbres and Toltec Railroad Commission Cumbres and Toltec Railroad Commission 811,390 1,264,726 1,499,500 2,021,000 1,871,000 * General Fund 811,390 1,264,726 218,500 218,500 590,000 Cash Funds 0 0 1,281,000 1,281,000 1,281,000 Reappropriated Funds 0 0 0 521,500 0

SUBTOTAL - (E) Cumbres and Toltec Railroad Commission 811,390 1,264,726 1,499,500 2,021,000 1,871,000 FTE 0.0 0.0 0.0 0.0 0.0 General Fund 811,390 1,264,726 218,500 218,500 590,000 Cash Funds 0 0 1,281,000 1,281,000 1,281,000 Reappropriated Funds 0 0 0 521,500 0

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FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2021-22 Actual Actual Appropriation Request Recommendation

TOTAL - (9) History Colorado 34,645,219 31,772,576 33,355,370 34,404,285 35,252,802 FTE 116.5 133.9 120.5 120.5 120.5 General Fund 2,195,065 2,670,757 2,280,206 2,280,464 3,651,750 Cash Funds 30,335,827 27,792,888 29,670,508 29,267,012 30,196,410 Reappropriated Funds 97,283 75,764 422,283 1,874,415 422,283 Federal Funds 2,017,044 1,233,167 982,373 982,394 982,359

TOTAL - Department of Higher Education 4,571,430,526 4,859,715,736 3,746,855,340 5,017,659,482 4,922,643,224 FTE 26,146.0 26,317.4 26,733.3 26,733.8 26,543.5 General Fund 175,501,463 646,743,644 582,854,446 1,086,781,721 1,128,981,437 General Fund Exempt 825,233,333 463,245,833 24,413,894 24,413,894 24,413,894 Cash Funds 2,723,600,098 2,816,087,326 2,682,059,639 2,975,735,249 2,801,288,006 Reappropriated Funds 819,343,944 899,126,618 431,676,885 904,973,536 942,555,797 Federal Funds 27,751,688 34,512,315 25,850,476 25,755,082 25,404,090

9-Mar-2021 223 HED-fig Draft - 1.28.21 2.5% Comp / $5M 1st Gen HC / $5M 1st Gen FTE Master Plan and Base Adjustment Funding Change 0.3% Performance Funding Change 2.2% Governing Boards Total State Funding Change 14,677,313 CMC/Aims/ATCs Total Funding Change 3,983,148 TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE

Total Model Output

Starting Place Adams Mesa Metro Western CSU System FLC CU System Mines UNC CCCS Sub-total, GBs CSU SEP CU SEP CMC AIMS ATC Total 100.0% Base FY 2020-21 State Funding 17,280,257 32, 184,959 63,669,142 15, 035,379 101,863,784 14, 136,437 162,407,320 25, 371,265 47, 004,464 189,865,735 668, 818,742 68, 964,435 78, 966,607 9,010,042 10, 653,783 13, 910,021 850, 323,630 of FY 2019-20 170,828,219 241,373,927 Step 1: Master Plan and Base Adjustment s for Base Core FY 2021-22 Funding Change 12,617 141,455 451,142 4,324 159,310 9,123 272,186 10,055 116,770 1,420,646 2,597,630 - - - - - 2,597,630 20-21 Costs FY 2021-22 Percent Change 0.1% 0.4% 0.7% 0.0% 0.2% 0.1% 0.2% 0.0% 0.2% 0.7% 0.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.3% 1.9% Step 2: Performance Funding 5.0% FY 2021-22 Funding Change 238,285 660,795 1,629,194 401, 259 1,919,905 204,281 3,178,891 655,215 993,688 4,795,799 14,677,313 1,513,433 1,732,932 197,727 233,799 305,257 18, 660,461 0.0% FY 2021-22 Percent Change 1.4% 2.1% 2.6% 2.7% 1.9% 1.4% 2.0% 2.6% 2.1% 2.5% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% FY 2021-22 State Funding Change 238,285 660,795 1,629,194 401,259 1,919,905 204,281 3,178,891 655,215 993,688 4,795,799 14,677,313 1,513,433 1,732,932 197,727 233,799 305,257 18,660,461 21-22 Costs FY 2021-22 State Funding Total (Including SEP) 17,518,542 32,845,754 65,298,336 15, 436,638 103,783,689 14, 340,718 165,586,211 26, 026,480 47, 998,152 194,661,534 683, 496,055 70, 477,868 80, 699,539 9,207,769 10, 887,582 14, 215,278 868, 984,091 2.5% Step 3: Temporary Funding 5.0% FY 2021-22 Funding ------2.50%

Step 1: Master Plan and Base Adjustment Tuition Rates 3.0% Adams Mesa Metro Western CSU System FLC CU System Mines UNC CCCS Total, GBs CSU SEP CU SEP CMC AIMS ATC Total 3.0% SEP change, pursuant to Section 23-18-304, C.R.S. 1,513,433 1,732,932 197,727 233,799 305,257 3,983,148 SEP total, pursuant to Section 23-18-304, C.R.S. 70,477,868 80,699,539 9,207,769 10,887,582 14,215,278 185,488,036 FY 2021-22 Percent change 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% Active Cell Funding Change (Master Plan and Base Adjustment) $ 1,298,815 7,692 76,897 233,171 2,843 88,594 5,225 147,682 5,852 66,644 664,216 1,298,815 - - - - - 1,298,815 Based on First Generation (SFTE) $ 1,298,815 First Generation Allocation FY 2021-22 (Headcount, per statute) 4,925 64, 558 217, 971 1, 481 70,717 3,899 124, 503 4, 204 50, 126 756, 430 1, 298,815 - - - - - 1,298,815 FY 2021-22 Sub-Total 12,617 141,455 451, 142 4, 324 159, 310 9,123 272, 186 10, 055 116,770 1, 420,646 2, 597,630 - - - - - 2,597,630 FY 2021-22 Percent Change 0.1% 0.4% 0.7% 0.0% 0.2% 0.1% 0.2% 0.0% 0.2% 0.7% 0.2% 0.0% 0.0% 0.0% 0.0% 0.0% 0.2% Base Core Costs 8.44814% Step 2: Performance Funding Active Cells State Funding Increase 102.19% Adams Mesa Metro Western CSU System FLC CU System Mines UNC CCCS Total, GBs CSU SEP CU SEP CMC AIMS ATC Total 10.0% Resident Enrollment 1,720,757 3,288,265 6,451,487 1,547,887 10,331,496 1,401,660 16,735,594 2,637,546 4,748,605 19,486,308 68,349,605 5.0% Credential Production 840,613 1,622,329 3,208,092 773,065 5,221,866 683,703 8,441,661 1,288,562 2,433,490 9,661,423 34,174,803 20.0% PELL 3,533,526 6,539,746 13,130,964 2,957,530 20,916,395 2, 939,586 33,403,613 5,272,158 9,646,677 38,359,016 136,699,211 20.0% URM 3,451,287 6,507,288 13,018,613 3,261,740 20,779,052 2,884,987 33,286,759 5,198,831 9,672,129 38,638,525 136,699,211 20.0% Retention Rate 3,518,293 6,576,740 13,083,189 3,031,975 20,801,030 2,885,262 33,107,244 5,163,325 9,607,081 38,925,072 136,699,211 10.0% Grad. Rate - 100% 1,817,273 3,346,873 6,726,638 1,562,804 10,185,497 1,449,651 15,981,062 2,577,702 4,731,116 19,970,988 68,349,605 10.0% Grad Rate - 150% 1,789,973 3,385,899 6,399,233 1,564,828 10,300,514 1,403,110 16,263,343 2,581,275 4,822,772 19,838,660 68,349,605 5.0% 1st Generation 846,821 1,578,614 3, 280,120 736,811 5, 247,840 692, 758 8, 366,934 1, 307,082 2, 336,280 9, 781,543 34,174,803 100% Performance FY 2021-22 Funding Change 238,285 660,795 1, 629,194 401,259 1,919,905 204,281 3,178,891 655,215 993,688 4,795,799 14,677,313 Performance FY 2021-22 Total Funding 17,518,542 32,845,754 65,298,336 15,436,638 103,783,689 14,340,718 165,586,211 26,026,480 47,998,152 194,661,534 683,496,055 Performance FY 2021-22 Percent Change 1.4% 2.1% 2.6% 2.7% 1.9% 1.4% 2.0% 2.6% 2.1% 2.5% 2.2%

Step 3: Temporary Funding

Adams Mesa Metro Western CSU System FLC CU System Mines UNC CCCS Total, GBs CSU SEP CU SEP CMC AIMS ATC Total Temporary Funding ------

Total Funding FY 2021-22 17,531,160 32,987,210 65,749,477 15,440,962 103,943,000 14,349,841 165,858,396 26,036,536 48,114,922 196,082,181 686,093,685 70,477,868 80,699,539 9,207,769 10,887,582 14,215,278 871,581,721 Total Funding Change over FY 2020-21 (FY 2019-20 Base) 250,903 802,251 2, 080,336 405,583 2,079,215 213,404 3,451,076 665,271 1,110,458 6,216,446 17,274,943 1,513,433 1,732,932 197, 727 233,799 305,257 21,258,091 Total Percent Change over FY 2020-21 (FY 2019-20 Base) 1.5% 2.5% 3.3% 2.7% 2.0% 1.5% 2.1% 2.6% 2.4% 3.3% 2.6% 2.2% 2.2% 2.2% 2.2% 2.2% 2.5% CU/CSU Change + SEP 3,592,649 5,184,009

9-Mar-2021 224 HED-fig Rate Gov. Boards Adams Mesa Metro Western CSU Sys Ft. Lewis CU Mines UNC CCs FY 2020-21 Governing Board Detail $ 40 FY 2020-21 Revised Total Appropriation 30

Stipend-eligible SFTE assumption 124,851.0 967.1 6,217.2 13,604.8 1,310.2 18,238.3 1,285.2 29,466.8 2,798.6 6,494.8 44,468.0 State-operated Stipends @$ 149,821,087 1,160,528 7,460,623 16,325,799 1,572,239 21,885,983 1,542,200 35,360,118 3,358,329 7,793,701 53,361,567 FFS per Section 303$ 131,082,785 6,097,180 6,057,060 10,415,240 4,742,620 20,896,807 4,395,104 32,850,957 7,297,602 11,948,174 26,382,041 Specialty education$ 60,109,272 28,965,063 31,144,209 Limited purpose FFS $ 3,693,028 0 182,352 182,352 121,568 880,480 0 1,801,964 0 75,000 449,312

SUBTOTAL State Funds$ 344,706,172 7,257,708 13,700,035 26,923,391 6,436,427 72,628,333 5,937,304 101,157,248 10,655,931 19,816,875 80,192,920 (Long Bill/landscape bills only)

Resident $ 1,292,489,052 11,566,509 57,789,366 101,380,890 8,444,068 233,065,500 9,039,777 506,536,311 60,950,745 57,803,840 245,912,046 Nonresident$ 987,323,450 9,616,570 14,253,970 9,962,780 8,119,531 202,302,448 32,870,033 564,037,019 98,705,726 19,892,449 27,562,924 Tuition $ 2,279,812,502 $21,183,079 $72,043,336 $111,343,670 $16,563,599 $435,367,948 $41,909,810 $1,070,573,330 $159,656,471 $77,696,289 $273,474,970

State/Tuition $ 2,624,518,674 $ 28,440,787 $ 85,743,371 $ 138,267,061 $ 23,000,026 $ 507,996,281 $ 47,847,114 $ 1,171,730,578 $ 170,312,402 $ 97,513,164 $ 353,667,890

Marijuana CF $ 3,050,000 $ - $ - $ - $ - $ - $ - $ 3,050,000 $ - $ - $ - Tobacco $ 14,062,806 14,062,806 Gaming $ 12,326,562 4,196 682,556 11,639,810 Mandatory Fees (all) 262,106,898 4,737,062 0 29,803,990 5,678,495 75,590,755 5,263,443 88,628,867 16,228,096 17,859,207 18,316,983

TOTAL $ 2,916,064,940 $ 33,182,045 $ 86,425,927 $ 168,071,051 $ 28,678,521 $ 583,587,036 $ 53,110,557 $ 1,277,472,251 $ 186,540,498 $ 115,372,371 $ 383,624,683 Total CF in base Long Bill $ 2,571,358,768 $ 25,924,337 $ 72,725,892 $ 141,147,660 $ 22,242,094 $ 510,958,703 $ 47,173,253 $ 1,176,315,003 $ 175,884,567 $ 95,555,496 $ 303,431,763

9-Mar-2021 225 HED-fig Rate Gov. Boards Adams Mesa Metro Western CSU Sys Ft. Lewis CU Mines UNC CCs

Recommended Adjustments for - FY 2021-22 $ 94 30 Final Action Stipend-eligible SFTE assumption 1,074.4 47.8 (57.2) (447.8) 35.8 (359.8) (81.6) 252.2 58.6 (248.9) 1,875.3 State-operated Stipends @ 205,288,485 1,701,490 9,910,577 20,776,941 2,223,425 28,531,528 1,851,952 48,447,462 4,698,947 9,819,737 77,326,426 FFS per Section 303 212,081,685 8,571,962 11,273,514 21,378,680 6,902,678 32,628,681 6,560,585 49,199,859 10,681,658 18,553,310 46,330,758 Specialty education 91,068,135 - - - - 41,512,805 - 49,555,330 - - - Limited purpose FFS 1,750,000 - 117,648 117,648 78,432 470,588 - 998,036 - (75,000) 42,648

SUBTOTAL State Funds$ 510,188,305 $ 10,273,452 $ 21,301,739 $ 42,273,269 $ 9,204,535 $ 103,143,602 $ 8,412,537 $ 148,200,687 $ 15,380,605 $ 28,298,047 $ 123,699,832

Resident 17,476,871 90,491 (3,208,612) 377,993 159,087 (1,123,855) 324,933 26,065,100 3,154,016 (414,258) (7,948,024) Nonresident$ 98,181,493 (909,970) (247,021) 2,394,850 244,507 46,737,893 665,922 47,788,851 1,928,261 (101,058) (320,742) Tuition 115,658,364 (819,479) (3,455,633) 2,772,843 403,594 45,614,038 990,855 73,853,951 5,082,277 (515,316) (8,268,766)

State/Tuition $ 625,846,669 $ 9,453,973 $ 17,846,106 $ 45,046,112 $ 9,608,129 $ 148,757,640 $ 9,403,392 $ 222,054,638 $ 20,462,882 $ 27,782,731 $ 115,431,066

Marijuana CF ------(2,550,000) - - - Tobacco (694,141) ------(694,141) - - - Gaming (1,792,261) (1,808) (120,074) ------(1,670,379) Mandatory Fees (all) 10,866,195 (62) - (134,950) (0) 3,527,500 78,952 7,940,962 (720,110) (118,450) 292,353

TOTAL $ 634,226,462 $ 9,452,103 $ 17,726,032 $ 44,911,162 $ 9,608,129 $ 152,285,140 $ 9,482,344 $ 229,301,459 $ 19,742,772 $ 27,664,281 $ 114,053,040

-3.9% -4.8% 2.5% 2.4% 10.5% 2.4% 6.9% 3.2% -0.7% -3.0%

9-Mar-2021 226 HED-fig Rate Gov. Boards Adams Mesa Metro Western CSU Sys Ft. Lewis CU Mines UNC CCs

$ 94 Final FY 2021-22 Long Bill 30 Final Action pgTotal Stipends + FFS p( per 303 to allocate 17,531,160 34,701,774 68,896,660 15,440,962 103,942,999 14,349,841 165,858,396 26,036,536 48,114,922 203,400,792 actual) 125,925.38 1,014.9 6,160.0 13,157.0 1,346.0 17,878.6 1,203.6 29,719.0 2,857.2 6,245.9 46,343.3 State-operated Stipends @ $2,820$ 355,109,572 2,862,018 17,371,200 37,102,740 3,795,664 50,417,511 3,394,152 83,807,580 8,057,276 17,613,438 130,687,993 FFS per Section 303 $ 343,164,470 14,669,142 17,330,574 31,793,920 11,645,298 53,525,488 10,955,689 82,050,816 17,979,260 30,501,484 72,712,799 Specialty education $ 151,177,407 70,477,868 80,699,539 Limited purpose FFS $ 5,443,028 0 300,000 300,000 200,000 1,351,068 0 2,800,000 0 0 491,960

SUBTOTAL State Funds $ 854,894,477 17,531,160 35,001,774 69,196,660 15,640,962 175,771,935 14,349,841 249,357,935 26,036,536 48,114,922 203,892,752

Resident $ 1,309,965,923 11,657,000 54,580,754 101,758,883 8,603,155 231,941,645 9,364,710 532,601,411 64,104,761 57,389,582 237,964,022 Nonresident $ 1,085,504,943 8,706,600 14,006,949 12,357,630 8,364,038 249,040,341 33,535,955 611,825,870 100,633,987 19,791,391 27,242,182 Tuition $ 2,395,470,866 $20,363,600 $68,587,703 $114,116,513 $16,967,193 $480,981,986 $42,900,665 $1,144,427,281 $164,738,748 $77,180,973 $265,206,204

State/Tuition $ 3,250,365,343 $ 37,894,760 $ 103,589,477 $ 183,313,173 $ 32,608,155 $ 656,753,921 $ 57,250,506 $ 1,393,785,216 $ 190,775,284 $ 125,295,895 $ 469,098,956

Marijuana CF $ 500,000 $ - $ - $ - $ - $ - $ - $ 500,000 $ - $ - $ - Tobacco $ 13,368,665 13,368,665 Gaming $ 10,534,301 2,388 562,482 9,969,431 Mandatory Fees (all) 272,973,093 4,737,000 0 29,669,040 5,678,495 79,118,255 5,342,395 96,569,829 15,507,986 17,740,757 18,609,336

TOTAL in LB $ 3,547,741,402 $ 42,634,148 $ 104,151,959 $ 212,982,213 $ 38,286,650 $ 735,872,176 $ 62,592,901 $ 1,504,223,710 $ 206,283,270 $ 143,036,652 $ 497,677,723 CF in Long Bill $ 2,692,846,925 $ 25,102,988 $ 69,150,185 $ 143,785,553 $ 22,645,688 $ 560,100,241 $ 48,243,060 $ 1,254,865,775 $ 180,246,734 $ 94,921,730 $ 293,784,971

9-Mar-2021 227 HED-fig Tuition and Fee Revneu Forecast - Institutions of Higher Education - February 2021 FY20 ESTIMATED Total CU CSUS FLC ASU CMU WSCU Metro CCC UNC CSM Resident UG Tuition $1,116,788,066 $372,523,019 $202,295,089 $9,101,518 $6,366,204 $56,144,072 $8,614,896 $109,889,262 $251,178,913 $53,444,114 $47,230,979 Non Resident UG Tuition $919,145,785 $509,322,144 $211,198,284 $30,949,914 $4,184,303 $13,355,151 $9,172,832 $10,841,108 $30,332,179 $19,218,560 $80,571,309 Resident Grad Tuition $207,896,913 $146,505,209 $32,464,317 $163,488 $4,940,276 $1,774,176 $0 $1,311,375 $9,431,848 $11,306,224 Non Resident Grad Tuition $185,580,812 $103,462,729 $50,716,382 $135,274 $4,505,764 $448,745 $0 $0 $900,358 $5,333,577 $20,077,983 Total Tuition $2,429,411,576 $1,131,813,101 $496,674,072 $40,350,194 $19,996,547 $71,722,144 $17,787,728 $120,730,370 $283,722,825 $87,428,099 $159,186,495 Student Mandatory Fees $283,802,961 $97,666,204 $79,991,065 $5,159,935 $5,118,973 $5,807,213 $5,939,292 $29,261,586 $20,816,860 $18,488,128 $15,553,705 Tuition and Fee Revenue $2,713,214,537 $1,229,479,305 $576,665,137 $45,510,129 $25,115,520 $77,529,357 $23,727,020 $149,991,956 $304,539,685 $105,916,227 $174,740,200

COF Stipend FTE 123,732.1 29,719.00 15,476.30 1,203.60 1,014.90 6,368.87 1,345.98 13,157.00 46,343.26 6,246 2,857.19 Resident Undergraduate FTE 130,965.1 32,272.00 18,267.00 1,292.00 1,015.00 6,369.00 1,372.75 14,067.30 46,955.00 6,405 2,950.00 Resident Graduate FTE 13,960.6 9,573.00 2,211.00 19 467 101 220.64 100 612 657 NonResident Undergraduate FTE 31,510.3 14,317.00 7,478.00 1,559.00 326 1,168.00 492.57 520.73 2,284.00 1,103 2,262.00 NonResident Graduate FTE 6,689.8 3,587.00 1,695.00 15 453 35 106.75 0 61 201 536

FY21 ESTIMATED Total CU CSUS FLC ASU CMU WSCU Metro CCC UNC CSM Resident UG Tuition $1,076,993,019 $356,143,069 $201,251,500 $8,752,437 $6,109,288 $55,539,774 $8,444,068 $101,380,890 $244,599,637 $47,380,296 $47,392,060 NonResident UG Tuition $812,249,289 $462,064,820 $157,883,448 $32,607,595 $4,119,961 $13,809,889 $8,119,531 $9,962,780 $26,607,951 $16,047,149 $81,026,165 Resident Grad Tuition $215,496,033 $150,393,242 $31,814,000 $287,340 $5,457,221 $2,249,592 $0 $0 $1,312,409 $10,423,544 $13,558,685 NonResident Grad Tuition $175,074,161 $101,972,199 $44,419,000 $262,438 $5,496,609 $444,081 $0 $0 $954,973 $3,845,300 $17,679,561 Total Tuition $2,279,812,501 $1,070,573,330 $435,367,948 $41,909,810 $21,183,079 $72,043,336 $16,563,598 $111,343,670 $273,474,970 $77,696,289 $159,656,471 Student Mandatory Fees $262,106,898 $88,628,867 $75,590,755 $5,263,443 $4,737,062 $5,678,495 $29,803,990 $18,316,983 $17,859,207 $16,228,096 Tuition and Fee Revenue $2,541,919,399 $1,159,202,197 $510,958,703 $47,173,253 $25,920,141 $72,043,336 $22,242,093 $141,147,660 $291,791,953 $95,555,496 $175,884,567

Resident Undergraduate FTE 123,758.7 31,788.3 17,053.3 1,266.0 975.0 6,119.1 1,360.0 13,086.7 43,436.1 5,692.0 2,982.2 Resident Graduate FTE 14,693.0 10,204.4 2,222.7 38.0 537.0 150.9 0.0 0.0 100.2 672.0 767.8 NonResident Undergraduate FTE 29,910.6 13,529.0 7,040.6 1,646.0 287.0 1,158.6 427.6 547.2 2,052.9 881.0 2,340.8 NonResident Graduate FTE 6,599.8 3,737.7 1,576.8 38.0 498.0 26.9 0.0 0.0 59.8 158.0 504.6

Change in Total Estimated Tuition and Fee Rev. -6.31% -5.72% -11.39% 3.65% 3.20% -7.08% -6.26% -5.90% -4.19% -9.78% 0.65%

FY22 ESTIMATED Total CU CSUS FLC ASU CMU WSCU Metro CCC UNC CSM Resident UG Tuition $1,095,810,404 $375,692,896 $197,986,345 $9,068,750 $6,200,000 $53,978,238 $8,603,155 $104,906,065 $243,953,696 $46,653,332 $48,767,927 NonResident UG Tuition $909,551,370 $507,740,445 $205,589,011 $34,271,723 $4,110,000 $13,549,546 $8,364,038 $12,357,630 $26,287,209 $15,830,732 $81,451,036 Resident Grad Tuition $226,335,876 $156,908,515 $33,955,300 $295,960 $5,457,000 $2,317,080 $0 $0 $1,328,937 $10,736,250 $15,336,834 NonResident Grad Tuition $176,959,652 $104,085,425 $43,451,330 $270,311 $4,596,600 $457,403 $0 $0 $954,973 $3,960,659 $19,182,951 Total Tuition $2,408,657,302 $1,144,427,281 $480,981,986 $43,906,744 $20,363,600 $70,302,267 $16,967,193 $117,263,695 $272,524,815 $77,180,973 $164,738,748 Student Fees $272,973,093 $96,569,829 $79,118,255 $5,342,395 $4,737,000 $5,678,495 $29,669,040 $18,609,336 $17,740,757 $15,507,986 Tuition and Fee Revenue $2,681,630,395 $1,240,997,110 $560,100,241 $49,249,139 $25,100,600 $70,302,267 $22,645,688 $146,932,735 $291,134,151 $94,921,730 $180,246,734

Resident Undergraduate FTE 122,923.6 31,465.1 17,229.3 1,274.0 975.0 5,987.0 1,360.0 12,125.0 44,055.4 5,462.0 2,990.9 Resident Graduate FTE 15,293.1 10,489.7 2,239.4 38.0 537.0 150.9 221.7 - 100.2 672.0 844.2 NonResident Undergraduate FTE 30,124.6 13,699.1 7,229.7 1,679.0 287.0 1,134.0 427.6 526.7 2,000.9 845.0 2,295.7 NonResident Graduate FTE 6,534.9 3,587.5 1,497.6 38.0 498.0 26.9 119.1 - 59.8 158.0 550.0

Increase in Total Estimated Rev 5.50% 7.06% 9.62% 4.40% -3.16% -2.42% 1.81% 4.10% -0.23% -0.66% 2.48%

Assumptions: 3.0 percent increase for resident and nonresident tuition

9-Mar-2021 228 HED-fig Office of the President Memo To: Joint Budget Committee Members From: Andy Feinstein RE: UNC FY 2021-22 Tuition Rates Date: March 4, 2021 CC: Michelle Quinn, UNC; Amanda Bickel, JBC

As part of an overall balanced approach to fiscal year 2021-22 budgeting, I am requesting tuition rate flexibility above the contemplated 3% cap. Underlying this request are three key elements:

• UNC is one of the most affordable 4-year institutions in Colorado, and will remain so in any of the tuition rate increase scenarios we are considering (3%, 5%, 7%). • We have implemented significant cost-cutting measures over the last several years, ensuring that we operate efficiently. • In collaboration with other Colorado CEOs, I have advocated for a reasonable increase in state funding to higher education, allowing all institutions to meet core minimum costs. However, the requested increase will still keep Colorado higher education funding in the bottom 10% nationally.

Affordability The recent Hanover study found that UNC’s tuition and fee revenue has been well below our national peers. Within Colorado, UNC’s cost is among the lowest of the public four-year institutions and lower than all other research universities.

FY21 Tuition FY22 Tuition UNC with 5% UNC with 7% Resident Tuition & Fees & Fees with 3% Inc. Tuition Inc.* Tuition Inc.* Colorado School of Mines $19,100 $19,673 University of Colorado-Boulder $12,466 $12,840 Colorado State University $11,939 $12,297 University of Colorado-Denver $11,425 $11,768 Colorado State University-Pueblo $10,664 $10,984 Western State University $10,646 $10,965 University of Colorado-Colorado Springs $10,480 $10,794 University of Northern Colorado $10,062 $10,364 $10,516 $10,668 Adams State University $9,560 $9,847 Metropolitan State University of Denver $9,437 $9,720 Colorado Mesa University $9,306 $9,585 Fort Lewis College $8,895 $9,162 *fee rates are increased by 3% in this scenario Source: CDHE Tuition and Fees Report Fiscal Year 2020-21

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9-Mar-2021 229 HED-fig Last month, the UNC Board of Trustees reviewed and began considering three prospective scenarios for undergraduate tuition rate changes for FY 2021-22 at 3%, 5%, and 7% increases.

Regarding the student impact from these scenarios, a 7% increase for resident undergraduate students would equate to a $532 increase in tuition for the academic year—before discounting from institutional aid. Even at that level of increase, if other Colorado institutions increase tuition by only 3% for FY 2021- 22, UNC would maintain the same comparative position for tuition rates in relation to other institutions.

UNC offers generous amounts of institutional aid to students from low- and middle-income families. In fact, 30% of UNC’s undergraduate resident students have no net tuition and fees costs after UNC institutional scholarships and grants are added to Pell grants, Colorado financial aid, and Foundation/private scholarships. On average, the discounted out-of-pocket impact for a 7% tuition increase for resident undergraduates would be $387 per year or $43 per month. Importantly, the impact to low- and middle-income students would be much less, even $0, after commensurate increases to institutional aid.

Efficiency and Budget Management Prior to disruptions caused by the COVID-19 pandemic, UNC had implemented $30 million in cumulative budget reductions, laid off almost 100 staff, and forgone faculty and exempt raises for three years. This was important and necessary work to reposition UNC for a sustainable and successful future, facing the realities of national higher education enrollment challenges. Additionally, in Fall 2019, UNC initiated a strategic planning process, aimed at improving our students’ success and building on the strengths of our institution.

After the budget reductions had been implemented, the university was positioned to rebuild financial reserves that would allow us to invest in the initiatives identified in the strategic plan. However, with the intense operational and financial challenges caused by COVID-19, including a $23 million revenue shortfall and $5 million in directly related incremental expenditures, those reserves have necessarily been redirected to basic operational realities. And, once again, we had to go back to our campus to produce even more savings. Throughout these measures, UNC has prioritized student support and has often done so by deferring basic operating and infrastructure needs, but more can and must be done to support students.

UNC has effectively managed these challenges through budget reductions, reallocations, and the Board- approved use of up to $6 million in operating reserves. We now anticipate that FY 2020-21 reserve usage will be lower than expected for the year due to continued conservatism in actual expenditures and relief from the most recent federal funding allocation.

Although enrollment of new first-time and new transfer students is expected to increase for Fall 2021, overall enrollment will not immediately return to pre-pandemic levels. In fact, total undergraduate enrollment is projected to be lower than Fall 2020 by about 4% due to decreases in new student cohorts in both Fall 2020 and Fall 2019. Coming on the heels of the budget reductions we have already made, this creates severe financial pressure.

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9-Mar-2021 230 HED-fig State Funding As you know, the recent Hanover study shows that statewide, Colorado funds higher education 66% less than national peers. For UNC, that is the equivalent of more than $40 million. The $82 million increase in state funding proposed by the CEOs would only keep us treading water, appropriately maintaining the campus and basic operations.

Request Regarding the institutional impact, a 7% increase for all undergraduate students would provide roughly $2 million more in revenue than a 3% increase in tuition. This would allow us to maintain investments that are needed in academic resources and student success support.

We are requesting that the Joint Budget Committee remain open to the possibility of and offer flexibility for increases in UNC’s undergraduate tuition rates above 3%, as our Board of Trustees gives consideration to the overall financial outlook for FY 2021-22. UNC’s final recommendation and decision regarding tuition rates will be made as enrollment expectations develop and more insight into state budget and federal stimulus actions becomes available.

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9-Mar-2021 231 HED-fig STATE FISCAL YEAR 2021-22

RANGE FOR RANGE FOR RANGE FOR HOW DO YOU EXPECT TO BALANCE YOUR BUDGET? E&G AUXILLIARY TOTAL REVENUE REVENUE REVENUE COMPARED COMPARED COMPARED TO TO TO SPR EADSHEET SPREADSHEE SPREADSHE DATA T DATA ET DATA

CU System

Boulder (3.0%)-3.0% (10.0%)- (5.0%)- Compensation decision for faculty and staff tied to Fall 2021 enrollment. 5.0% 5.0% If revenue comes in higher: Increase academic investments to offset enrollment growth needs, including student support services and academic technology Add investments in diversity, equity, inclusion, and justice priorities Reconstitute campus contingency levels

If revenue comes in lower: Personnel actions which could include continued hiring delays, position eliminations, continuous and intermittent furloughs, planned separations and retirements, layoffs Operational budget reductions to travel, official functions, preventive and deferred maintenance, utilities, hardware and software Reduction to planned increases to financial aid and investments in strategic campus priorities Use of contingency funds, including those that have been set aside for deferred maintenance and technology replacement Pause to capital projects

Denver (2.0%)-10.0% (5.0%)- (5.0%)- Compensation decision for faculty and staff tied to Fall 2021 enrollment. 10.0% 5.0% If revenue comes in higher: Restore campus-wide operating reductions, to the extent possible Invest in areas of need, including institutional aid, equity, technology and deferred maintenance

If revenue comes in lower: Utilize one-time funds and enrollment contingency to offset revenue shortfalls Push-out additional temporary operating reductions to the campus Pause planned investments in deferred maintenance and other infrastr u cture needs

UCCS (5%)-5% (10%)-10% (5%)-10% Compensation decision for faculty and staff tied to Fall 2021 enrollment. If revenue comes in higher: Restore staffing positions Restore operating cuts

If revenue comes in lower: Increase open position freezes Further operating cuts Furloughs Further contingency fund reductions

9-Mar-2021 232 HED-fig STATE FISCAL YEAR 2021-22

RANGE FOR RANGE FOR RANGE FOR HOW DO YOU EXPECT TO BALANCE YOUR BUDGET? E&G AUXILLIARY TOTAL REVENUE REVENUE REVENUE COMPARED COMPARED COMPARED TO TO TO SPR EADSHEET SPREADSHEE SPREADSHE DATA T DATA ET DATA

Anschutz (3.0%)-3.0% (1.0%)-3.0% (3.0%)- 3.0%

CSU System

Ft. Collins Flat to 10% Flat to 10% Flat to 7.5% Draw on reserves, draw on the Strategic Financing Source (Scoop & Toss), below below below Base Budget reductions (including staff reductions) balance with any staffing increases approved by the State Legislature.

Pueblo 56,083,255 - 5,238,000 - 94,204,255 - To balance we will hold positions vacant, reduce discretionary expenses, and 59,552,323 5,562,000 97,117,789 pull from reserves. We do expect to increase salaries. If we come in at the low end of the range we will go further into position management, and restructure under performing business units. If we should fall into the upper range it will only serve to rebuild our reserves which we can then put back into program initiatives.

CCCS (2.5%)-5.0% (10.0%)- (3.5%)- Eliminate positions, hold positions vacant, furlough staff, implement hiring 10.0% 6.0% freezes, reduce operating and travel, and use reserves. At this point, there are too many uncertainties to know what to expect for salary increases.

UNC (3.0%) - 3.0% (5.0%) - (4.0%) - 4% Extend reductions from FY21, eliminate positions or hold positions vacant, 5.0% delay investments in infrastructure and services where feasible, minimize travel and development expenses, and utilize reserves. Specific considerations beyond these will be made, as needed, including the topic of compensation increases.

Mines (5.0%)-3.0% (5.0%)-3.0% (5.0%)- (1) If the forecast is accurate, we expect to proceed with selective hiring and 3.0% partial restorations of operating budget cuts made in FY21. We would also expect to be able to offer some level of salary increase to employees. Capital projects without donor funding would remain suspended. (2) If enrollment comes in at the low end of the range, balancing actions would include holding vacant positions open, salary freezes, hiring freezes, furloughs, eliminating open positions, travel reductions, and additional operating expense reductions.

CMU (3%-1%) (3%)-(1%) (3%)-(1%) Previous budget savings measures included redeployed employees to support critical areas, such as student services and facilities departments, limiting travel, pausing campus improvements, not re-filling vacant positons not deemed critical, and voluntary furloughs. CMU's estimates are based on best information we have at this time given it is early in the budget process with state funding unknown and very unpredictable enrollments for AY21-22. If the State does not fully fund the core minimum cost increases and/or CMU suffers enrollment decline, CMU will need to continue some combination of the budget saving measures outlined previously and look at potential additional permanent reductions in programs and services depending on the

9-Mar-2021 233 HED-fig STATE FISCAL YEAR 2021-22

RANGE FOR RANGE FOR RANGE FOR HOW DO YOU EXPECT TO BALANCE YOUR BUDGET? E&G AUXILLIARY TOTAL REVENUE REVENUE REVENUE COMPARED COMPARED COMPARED TO TO TO SPR EADSHEET SPREADSHEE SPREADSHE DATA T DATA ET DATA

level of revenue shortfall. The difficulty is compounded by the need to engage and support students to even a larger degree as we come out of the COVID period. It is imperative we recover the students who stopped out or took a gap year(s) and address the finanical, social and economic challenges caused by COVID--especially the low-income and first generation students and families who were disprortionately hit the hardest NOTE: It should be noted that in spite of an enrollment decline in Fall'20 and Spring '21, tuition revenues have increased between the FY21 revised tuition revenue estimates and the FY21 original estimates as more classes during this COVID academic year were on-line vs. in-person. While CMU's total on-line rate vs. total in-person rate is not significantly different, the on-line rate is a flat rate which does not differentiate between tuition and fees as does the in-person rate. Thus, on-line results in more tuition revenue to CMU with a corresponding reduction in fee revenues.

MSU-Denver (7%) - 6% (12%) - 9% (8%) - 6% If the forecast is reasonably accurate, the E&G budget will be about $193 million, which is an increase from FY20-21 (including the Governor’s portion of CARES funding) of about $5.8 million. However, this only represents an estimated increase from the FY19-20 E&G budget of about $840,000. The $5.8 million increase would not be sufficient to cover the $8 million in mandatory costs for FY22, which include the Governor’s recommended increase for Classified staff, Denver minimum wage increase, AHEC bond payment, and inflation. The University would need to use at least $2 million from the reserve to cover these increases. MSU Denver should be able to restore salaries for furloughed staff but would not be able to reinstate any of the positions that were cut in the FY20 budget reductions. MSU Denver has been chronically underfunded and these cuts have had a disproportionate impact on the university, the infrastructure, and most importantly, the students. Without restoring these positions, we are unable to directly and indirectly support our students to ensure their success. Also, the University will not be able to offer Faculty or non-classified staff any salary increases for another year. Over the last five years, MSU Denver has only been able to provide salary increases for faculty and non-classified staff of about $.50 per every $1.00 of inflation. Investing in personnel has become a critical issue for the University. Additionally, MSU Denver will remain incapable of investing in critical infrastructure needs like the aging IT system, outdated HR processes, and the building environments. Deferring these costs for yet another year increases the probability of critical failures and the cost to repair, while decreasing our ability to support students. At the low end of the range shown, MSU Denver would have a budget shortfall of about $16 million, including the mandatory increases. After implementing $9.3 million in base reductions and furloughs for the current fiscal year, there is little left to cut in the E&G budget. The University would be forced to evaluate cuts to academic, student, and institutional

9-Mar-2021 234 HED-fig STATE FISCAL YEAR 2021-22

RANGE FOR RANGE FOR RANGE FOR HOW DO YOU EXPECT TO BALANCE YOUR BUDGET? E&G AUXILLIARY TOTAL REVENUE REVENUE REVENUE COMPARED COMPARED COMPARED TO TO TO SPR EADSHEET SPREADSHEE SPREADSHE DATA T DATA ET DATA

support programs as well as fully deplete the reserve. These cuts would significantly inhibit our ability to serve our students to ensure their academic success and put the institution at risk in maintaining compliance with state and federal regulations. The upper end of the range includes a 3% tuition increase, closing the tuition window the remaining 50%, and flat enrollment. The tuition rate discussion has just begun and no decision will be made regarding the tuition window until May. Given the economic and emotional impacts of COVID on our students, we will be faced with tough choices regarding both a tuition increase and the closing of the tuition window in order to address our severe budget shortfalls. In this scenario, the University would have about $9 million in budget available to address the critical personnel, program, and infrastructure needs, after covering mandatory costs. Providing faculty and non-classified staff with an increase equal to Classified staff would be about $2.8 million, leaving approximately $6 million to allocate toward the nearly $50 million in unfunded needs. MSU Denver’s critical unfunded needs include planning for infrastructure and IT maintenance and renewal, replenishing our depleted reserves to deal with unforeseen crises, and improving the staff ratio to better support our students.

Western (10%)-10% (10%)-10% (10%)-10% Western anticipates overall reserve use of 2,432,340.00 in FY22. This is reflected in the E&G tab column N reserve use and the net on the Total Funds estimate. We have just begun our FY22 budget process. These assumptions are based on flat enrollment. Our board will make decisions regarding tuition and fee rates as well as salary increases in March.

Ft. Lewis (3%) - 5% (2%) - 8% (3%) - 3% Fort Lewis is still holding some positions vacant. If the forecast is reasonably accurate, the College will continue reduction, reallocation efforts and pull funds from reserves to balance the budget. The Board of Trustees do not decide on salary increases until the May/June meeting, however, the Trustees are very concerned about salaries as faculty/staff have gone 4 of the last 5 years without salary increases. The range for auxiliary revenue is wider as FY 20-21 did not have consistent trends between fall and spring semesters.

Adams Adams State University is holding several positions vacant, and several have been eliminated. We have shifted our health plan to put a larger percentage burden on our employees, and will see an additional six months of savings from that shift in FY22. We have also temporarily reduced our retirement contributions. We did not give cost of living adjustments this year, but will likely do whatever the JBC does with Classified to our entire population to be equitable. We have not kept up with the salaries of our peers, and it has hurt us in the recruitment and retention of qualified faculty and staff. We have made drastic budget cuts over the past four years, and we cannot

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RANGE FOR RANGE FOR RANGE FOR HOW DO YOU EXPECT TO BALANCE YOUR BUDGET? E&G AUXILLIARY TOTAL REVENUE REVENUE REVENUE COMPARED COMPARED COMPARED TO TO TO SPR EADSHEET SPREADSHEE SPREADSHE DATA T DATA ET DATA

continue without any investments in our infrastructure and our people. While we are not budgeting for theses investments yet, we are working diligently on cost control and innovation in order to position ourselves to be able to.

CMC (5.0%)-5.0% (10.0%)- Most of the balancing will be seen in adjunct faculty lines, as these expenses 10.0% are incremental and directly tied to enrollments. Additionally, we are trying to maximize faculty resources across the college through cross-campus offerings that the virtual environment has helped expand. The college no longer has a hiring freeze, but will not be adding any employee FTE to the 21-22 budget. The BOT will not take action on salaries until their May/June board meetings, however, we are planning to offer inflation-based cost of living increases to employees. In the current year, we waited on a portion of our cost of living increase until midway through the year to ensure sufficient funds were available. This technique could be repeated if necessary, though such a decision would need to be finalized before the start of the new fiscal year. If property taxes come in lower than estimated, we will need to use reserves to fund our capital project and equipment budget lines.

Aims (3%)-1% (5%)-10% (3%)-1% Because of Aims prudent fiscal management of local property tax revenues and other financial resources, Aims was able to avoid reducing or furloughing staff for FY 20-21. We anticipate maintaining a flat but stable budget for FY 21-22. As a local district college, a significant portion of our funding comes from mill levies assessed on property valuations within our taxing district. As assessed values change due to changing economic conditions, primarily with the oil and gas industry, the college will see reductions in local tax revenue received. The timing of setting assessed values for residential property (reset every 24 months) and oil and gas (reset every 12 months) lags behind; therefore, the complete picture of the economic changes and impact on Aims’ budget will not be fully realized until FY 2022-23 and FY 2023-24. Aims will continue to monitor assessed valuations, be fiscally prudent, and leverage reserves and other financial options in the event budget reductions are needed.Our board does not take action on salaries until their April board meeting.

ATC - Emily (5%)-5% (5%)-5% (1) if forecast is accurate, we can increase salaries, (2) If enrollment/revenue Griffith Technical are lower, we will need to hold positions open, eliminate programs that run College in deficit; if higher, we would use the addtional funds to cover deferred expenses

ATC - Technical (2%)-1% (2%)-1% (1) If this forcast is reasonably accurate, then we would be able to function College of the normally. We would be able to give pay increases and fully fund positions Rockies without going into reserves. The pay increases would be to offset year's of

9-Mar-2021 236 HED-fig STATE FISCAL YEAR 2021-22

RANGE FOR RANGE FOR RANGE FOR HOW DO YOU EXPECT TO BALANCE YOUR BUDGET? E&G AUXILLIARY TOTAL REVENUE REVENUE REVENUE COMPARED COMPARED COMPARED TO TO TO SPR EADSHEET SPREADSHEE SPREADSHE DATA T DATA ET DATA

flat salaries. (2) We are not looking to reduce staff, but we may not be able to give the pay raises, and we may need to dip into our reserves.

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