The latest round of budget cuts and transfers proposed Wednesday by Gov. Bill Ritter would preserve current levels of higher education spending in 2009-10 – but only by using federal stimulus funds that had been intended for use in 2010-11.

Gov. Bill Ritter (left) and budget director Todd Saliman present budget cuts to the Joint Budget Committee on Oct. 28, 2009.
Gov. Bill Ritter (left) and budget director Todd Saliman present budget cuts to the Joint Budget Committee on Oct. 28, 2009.

That means college and university spending faces an even higher “cliff” in 2010-11, and that the 2010 legislative session will face an even tougher challenge in trying to support higher ed.

State funding for K-12 schools, protected by formulas this year except for a $110 million cut lawmakers are expected to take in January, isn’t part of the plan that Ritter and state budget director Todd Saliman unveiled Wednesday to the Joint Budget Committee and a hearing room packed with other lawmakers, bureaucrats, lobbyists and reporters.

But, 2010-11 K-12 spending is expected to take a hit regardless of Amendment 23. Administration officials wouldn’t elaborate Wednesday on their proposals for trimming education spending. Those should become clearer next week, because the governor is supposed to submit his proposed 2010-11 budget to the JBC on Monday.

Last spring, as the governor and lawmakers struggled with recession-induced revenue declines, the plan was to hold higher ed funding level for 2008-09, 2009-10 and 2010-11 by spending about $555 million in state tax funds and about $150 million in federal American Recovery and Reinvestment Act aid each year. (The college and university system receives additional funds from tuition and grants.)

The administration last summer announced that it would need to use an additional $80 million in stimulus funds to keep higher ed afloat this year. Doing so requires a federal waiver; that request is pending, although Saliman expects it will be granted.

CapHierEdCutChart102809But, under the plan announced Wednesday, the administration proposes using $376.5 million in stimulus money and only $329.5 from the state general fund for the 2009-10 fiscal year, a total of $706 million.

So, the 2010-11 budget will see “a net reduction in higher education,” Ritter told the JBC. Because of stimulus rules, however, policymakers won’t be able to go below $555 million in state support for 2010-11. So, at least they’re going to have to make up the difference between that figure and the $329 million.

Referring to the reduction, Saliman said, “There won’t be enough ARRA dollars to restore spending to $706 million.”

Asked about tuition at a later news conference, Ritter indicated he didn’t favor raising the tuition ceiling above 9 percent or giving college trustees control of tuition as a way of easing 2010-11 cuts.

Instead, Ritter said, he wants the tuition issue to be studied thoroughly during an upcoming higher education strategic planning process.

He also noted, “If you do tuition increases you still have to find a way of protecting middle and lower-income families.”

Overall, the Ritter plan, effective Nov. 1,  closes a $271.4 million shortfall and comes on top of previously closed budget gaps of $2.1 billion. That has been accomplished with some cuts, use of cash funds and various transfers and accounting steps. In addition to declines in state revenues, growth in such programs as Medicaid have squeezed the budget.

Shifting more higher ed support to stimulus money from the general fund accounts for $145 million on the new balancing plan.

Ritter and Saliman got some questions from the JBC about furloughs, which affect only about 60 percent of state employees because emergency and public safety workers have been exempt. Earlier this week Ritter announced four additional furlough days for many state workers. (The furloughs also haven’t affected higher ed, because work policies are up to individual boards of trustees.)

The governor said he was aware of that problem and that the administration was looking at other ways to control payrolls in 2010-11. “We are considering other options.”

Ritter also talked about how the administration had worked to minimize cuts to programs that serve vulnerable children.

Sen. Chris Romer, D-Denver, said, “I would ask for the same safety net to be considered for at-risk kids” when 2010-11 cuts to education are proposed.

On the question of raising revenue rather than just continuing to cut, Ritter said, “Tax credits and tax deductions will be on the table in 2010.”

What they’re saying

Sen. Josh Penry, R-Grand Junction, Senate minority leader: “We’re in this budget mess for two reasons: a bad economy, and a legislature and governor that spent too much when times were good. While some of these reductions are overdue, most are gimmicks, half-measures, or short-term fixes that only kick the can down the road. It’s time to start thinking about the fundamental reform of government.” Penry, of course, is running for governor.

House Speaker Terrance Carroll, D-Denver, responding to Penry’s statement: “Senator Penry must be trying to make light of our state’s 7 percent unemployment rate and the Democrats’ commitment to budget-balancing by calling this crisis a ‘budget mess.’ Well, I see serious problems and the governor presenting some serious solutions.”

Tim Foster, president of Mesa State College: “Of course that news is difficult to hear, but we are resilient and have been working for the last five years to make sure that we are operating as efficiently as possible while still growing both in enrollment and quality academic programs.” The statement was part of a lengthy news release touting Mesa’s efficiencies and success under Foster, who was higher education director for part of GOP Gov. Bill Owens’ administration.

Wade Buchanan, president of the liberal Bell Policy Center: “These are the most challenging times for state budgeters in decades, and we think Gov. Ritter continues to do a responsible job navigating between bad options.”

Kathy White, program director of the liberal Colorado Fiscal Policy Institute: “The latest round of budget cuts is another stark reminder that Colorado needs a new approach to escape our perpetual budget crisis. We’ve been saying for months that we cannot simply cut our way back to prosperity, nor can we continue relying on one-time measures. … There is simply not enough state revenue to support and sustain the vital services that Colorado families and businesses rely on every day.”

OSPB presentation on latest balancing steps (higher education detail on page 11)