State colleges' survival in doubt after $300 million cut

This week’s “draconian” cuts to higher education will mean that some state colleges will close and others will have to drastically restructure to survive, one college president said Thursday.

“There will be some that won’t be able to restructure themselves in a way to be viable, so will disappear,” said Metropolitan State College of Denver President Stephen Jordan.

The Colorado legislature’s Joint Budget Committee on Wednesday cut $300 million from higher education, essentially slashing in half state support for colleges and universities.

Joint Budget Committee members still hope that the $300 million slash in higher education can be made up – at least for this year – by taking some $500 million from the reserve fund of a quasi-public entity called Pinnacol Assurance.

Pinnacol advertises itself as “Colorado’s choice for workers compensation insurance” and has a healthy $700 million reserve.

Education advocates see raiding the reserve as a way to save colleges from crippling cuts for at least a year.

But employers want that reserve to stay intact, so that if unemployment continues to rise, they won’t be hit up for more money to keep the fund solvent.

JBC member Rep. Jack Pommer, D-Boulder, said the state’s lawyers are confident that Pinnacol’s reserve fund can be used to meet shortfalls in the state budget, but he acknowledged that Pinnacol’s board members are just as adamant that “it’s their money.”

“It’s going to come down to they win or we win,” he said.

In any event, state universities had better prepare for being without their share of that $300 million when the fall semester rolls around, Pommer said.

And if that comes to pass, “higher education is finished,” in terms of getting any meaningful piles of money from the state, he said.

The state’s top-tier schools – University of Colorado at Boulder, Colorado School of Mines and Colorado State University – likely can weather the cuts because they get loads of money from research and for years have gotten only a small percentage of their revenues from the state, Pommer surmised.

But community colleges and four-year colleges such as Adams State, Metro State, CU-Denver and the University of Northern Colorado could suffer greatly.

“Even if we get the (Pinnacol) money, it’s just for one year, and we’ll have this issue a year from now,” said Metro State’s Jordan.

Metro State’s share of the $300 million cut, added to smaller cuts already announced by the JBC, will leave it with a shortfall of $26.2 million for 2009-10 – a 56 percent cut – the president said.

He said he has never seen such a drastic cut in his decades in higher education.

“We were working on plans for a $5 million cut, and thinking that things could get worse, we had laid out specific plans for a $10 million cut,” he said. “We had identified a whole series of positions we would have to eliminate.”

And now, Metro State is looking at another $16 million gap.

Gone for sure is Metro State’s pay-for-performance plan, a way to reward exceptional professors.

“We spent countless hours putting together this plan,” Jordan said. “We had spent 2½ years on it. This was to be the evaluation year.”

When times are tough, legislators always seem to cut higher education deepest, thinking it can better withstand the slashing because it at least can raise revenues with tuition, Jordan said. But in Colorado, lawmakers cut colleges’ funding, then try to limit the amount tuition can rise, he noted.

Cutting higher education is risking the future, Jordan said.

“As much as we talk about the importance of higher education to the economy, there are a lot of people who say you don’t need to have a degree to have a good job,” he said. “They’re willing to run that risk, to have fewer people go to college.”

But Colorado’s economy is dependent upon an educated populace and “currently we’re not producing enough people to replace the people who are aging,” he said.

The so-called “Colorado Paradox” refers to the fact that the state has a higher percentage of college-educated adults than almost any other state, yet it is not delivering a college education to very many of its young people.

Instead, Colorado’s youths tend to fill the blue-collar jobs in the state, while college-educated people from other states move here to fill the higher-paying jobs.

The $300 million cut “is raising the ante on the whole Colorado Paradox,” Jordan said.

“How much are we willing to bet our future on other states producing an educated work force for us? What are the risks we are willing to run, “ he said, suggesting that fewer college graduates will mean more dollars will have to be spent on prisons, social services and courts. “Basically, the legislature is saying that some institutions are going to have to close down.”

“At Metro, we’re going to have to restructure ourselves to make ourselves economically viable,” Jordan said. “We’ll still be capable of providing a quality education experience, but we will end up being a smaller institution. A lot less students will be able to get into Metro, even though our historic mission has been of being an open institution.”