State budget cuts brought on by a struggling economy have hammered funding for higher education and public research universities across the country.
Colorado has been bruised by these cuts almost more than any other state.
A report released last year by the National Science Foundation found that between 2002 and 2010, state funding on a per-student basis at Colorado’s two major public research universities — CU and CSU — dropped 48 percent, the largest decrease for any state during that time period.
Colorado also bottomed out at No. 50 in state funding per student for its major public universities — $3,417 per student compared to the national average of $9,082 in 2010.
CSU President Tony Frank has frequently talked about what this means — the slow but steady move towards privatization of higher education in Colorado.
“Ours could potentially become the first state in the nation to de-fund its system of public higher education,” Frank said in his 2012 fall address.
Since 2010, the last year studied in the report, state funding to higher education in Colorado declined an additional $193 million, according to the Colorado Department of Higher Education website. During that same time frame, CSU saw a $37.6 million decrease, bringing the total state support to $91.2 million for 2013.
These numbers are a cause for great concern among campus leaders and advocates for public research universities.
In an earlier interview with the Collegian, Dan Arvizu, chairman of the National Science Board, said the nation’s public research universities are the backbone of our country, providing access to higher education to a wide swath of the population and driving cutting edge research and development.
“They are part of the fabric of this country,” Arvizu said. “In fact, I think they’re what make this country strong in terms of competitiveness, and any erosion of that national asset, I think, is hugely disturbing to those of us who are trying to promote science and engineering education for national benefit.”
The report shows public research universities in peril across the country.
In the eight-year time period analyzed, state support declined an average of 20 percent, adjusted for inflation, for the nation’s 101 major public research universities. Only seven states saw an increase in state funding.
A number of possible consequences are outlined in the report as a result of this erosion in state funding.
With private universities spending more than twice the amount per student, many worry about the creation of a two-tier system between public and private universities.
As the salary gap widens between faculty at private and public universities, talented students and faculty members could migrate to private universities, reducing the quality, research capacity and access of public research universities.
As tuition is often increased to make up for the shortfall, there is also concern that the ability of low and mid-income students to afford to attend a world class public university may be diminished.
“A consequence, maybe unintended, is that tuition is rising at a faster rate than many people are able to afford,” Arvizu said. “Their resources aren’t rising at the same rate. It does make it more difficult, it’s working against us to educate the rest of the population.”
This also means students end up bearing the brunt of the cost of education. Twenty years ago in Colorado, students footed one-third of the cost of their education, a number that is now two-thirds.
At CSU, tuition has increased 54 percent over the last four years to its current rate of $6,875 per year, with a tentative 9 percent increase on the table for the 2013-14 school year.
Reasons for Decrease in State Funding
A combination of rising student enrollment numbers and education expenses, coupled with state budget cuts, was blamed for the decreasing amount of state funding on a per-student basis.
CSU Chancellor Mike Martin believes larger social and demographic trends are also contributing to this decline.
He cited a growing feeling among many state legislatures and citizens that the public sector needs to be reduced in size, along with a belief that higher education is less of a public good than it used to be.
“We’ve sold it in some ways as a means of getting a job as opposed to just improving society,” Martin said. “I think taxpayers say ‘if this is just about your job then you should pay for it yourself.’”
He added an aging population that has sent their kids through college might not be as willing to support higher education like they did in the past.
Charles Brown, the director of the Colorado Futures Center, which analyzes the state economy and public policy, said various research models shows that only three areas in the state budget’s general fund will receive funding by the year 2025.
Prisons, healthcare and K-12 education will absorb the entire state funding, leaving the other 17 departments in state government “squeezed out” of the state budget.
Brown cited the aging population and growing pressures on correction facilities and services as a primary factor in the loss of state funding. The state of Colorado is legally required to allocate a certain percent of the budget to those three areas, Brown said.
The next few years are not going to be problem years according to Brown. According to his research models, the problem years will most likely occur closer to 2020 and for the next five years after.
“Looking at the magnitude of the problem, neither spending cuts nor revenue increases in and of themselves will be sufficient to solve the problem,” Brown said. “We need to be looking at structural solutions in the state financing system.”
Joint Budget Committee member and state representative Claire Levy agreed with Brown about the long term predictions of state budget allocations. She said the problem is exacerbated in part because Colorado has fairly low taxes and residents don’t pay a tax on services like auto repair.
Colorado taxpayers are also protected by The Taxpayers Bill of Rights (TABOR), which is a state constitutional amendment mandating all tax increases have to be voted on.
“The fact is that there is no amount of juggling we can do that will allow us to cover the needs we have without raising taxes,” Levy said. “And that is our fundamental problem.”
Even though higher education in Colorado is slated to receive an additional $30 million from the state for a total of $543 million in fiscal year 2014, the trend line is moving down. The $543 million is significantly less than the record high of $706 million in 2010.
“Hopefully this (2014 increase) is a long-term trend, but we’ve got to continue to believe that we are going to have to find new ways to do business,” Martin said, “because I don’t want to have to count on having the legislature to continue to rebuild funding.”
New Revenue Models
This dwindling support from the state has forced public universities to become more financially self-reliant.
A few of the more well-known methods for generating new revenue outside of tuition hikes has been increasing enrollment of out of state and international students, along with private contracts public universities enter into, like the contracts CSU has with Coke and Hewlett Packard.
Martin said public universities are coming up with even more creative ways to diversify revenue streams.
He talked about surplus funds from the CSU-Global online campus being used as a venture capital fund. Campuses or faculty members within the CSU system would apply for the funds to invest in ways to reduce costs, increase access and find ways to do “academic business and business business better.”
As another model of the future, Martin talked about partnering with other college systems, both public and private, to offer CSU degrees to students in the metro area. He also predicted that in five or six years, 20 percent of the CSU-Fort Collins curriculum will be online.
“These are the new models, not the stand alone campus where people show up and march through as freshmen to seniors,” Martin said. “We’ll still do that and do it well, but this is a whole other way of doing business.”
Senior Reporter Austin Briggs and Collegian Writer Mariah Wenzel can be reached at firstname.lastname@example.org.