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Budget Woes Prompt Colorado State University to Consider Partial Privatization

Leonard Gilroy
October 20, 2009, 1:47pm

The Denver Post reports today that officials at the Colorado State University system are considering partial privatization as one potential response to significant budget cuts to higher education in the wake of the state's fiscal crisis and the expiration of federal stimulus dollars in 2011:
As state funding cuts loom in 2011, leaders of the Colorado State University system have started considering an option unheard of in all but a handful of states: converting to a part-public, part-private structure in which students pay more for costlier degrees.

If implemented, the change could mean CSU's $4,800 annual in-state tuition jumps to about $13,500 for liberal-arts programs and as much as $20,000 for engineering degrees at the Fort Collins campus. [...]

CSU executives earlier this month raised partial privatization as a possible answer to the state's defunding or severely reducing its support for higher-education institutions. Also under CSU's consideration are plans to cap the number of Coloradans who can receive reduced, in-state tuition rates.

CSU chief financial officer Rich Schweigert cautioned that the suggestions are the start of a last-resort contingency plan, and their implementation depends on how the state handles higher-education funding. All of the suggestions would require legislative approval. [...]

Colorado institutions are scrambling to cut costs and find new revenue ahead of a funding crunch that will leave them a collective $230 million-plus short in 2011, when federal stimulus money runs dry.



That shortfall represents more than a third of the state's support for colleges and universities, and the shortfall is only expected to worsen with the state's budget crisis. [...]

Schweigert said the CSU programs most ripe for privatization are those that cost the most to provide, such as veterinary medicine.

At the same time, CSU could limit the number of students admitted at lower, in-state rates to the amount that state funding will pay for. Both scenarios would mean tuition hikes for many students.

And both will be met with resistance from the legislature in 2010, when lawmakers expect CSU and other colleges to start pushing backup plans such as these.

And the political honesty award of the week goes to Colorado State Representative Jack Pommer:

[Pommer], incoming chair of the budgeting committee, said higher education's funding crisis has been a long time in the making as lawmakers for years have shied away from politically inexpedient proposals to allow tuition increases and other fixes.

"I'm very glad CSU is looking at these options. They really don't have a choice," said Pommer, D-Boulder. "If we're not going to plan ahead, at least the schools are."

» Reason Foundation's Annual Privatization Report 2009
» Reason Foundation's Privatization Research and Commentary


Leonard Gilroy is Director of Government Reform


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