Medicaid hurts college funding, official says

It’s a short and unhappy story.

That’s the way Mark Cavanaugh, chief financial officer for the Colorado Department of Higher Education, describes the future of public higher-education funding.

Colorado colleges and universities need to plan now for budget cuts in the next few years regardless of what happens with the economy, Cavanaugh said Thursday while presenting a budget and economic update to Colorado Commission on Higher Education. The commission met Thursday at Colorado Mesa University.

While some state-funded departments may be able to rebound as jobs return, Cavanaugh predicted state funding for higher education will continue to decline as other parts of the state budget grow. Kindergarten through 12th-grade education funding, for example, is constitutionally required to increase by inflation, and Medicaid enrollment has grown by 121 percent since the start of the millennium, he said.

“Medicaid is eating everything up,” Cavanaugh said, adding more than 10 percent of Colorado’s population is now enrolled in the public health insurance program, up from about 6.5 percent 10 years ago.

Higher Education Commissioner BJ Scott said she believes the increase in Medicaid enrollment is linked to the economy, with more people losing work and qualifying under Medicaid’s income requirements. Even if the economy rebounds and fewer people qualify, Cavanaugh said higher education remains at a disadvantage.

“The fact is higher education is practically the only thing left that’s discretionary, so it’s always the last puzzle piece to the budget,” Cavanaugh said. “Higher education is in the mouth of the Pac-Man. It’s really not sustainable. Time allows us to plan, allows these institutions to plan.”

Plans for staying solvent are being discussed at Colorado Mesa University, according to the school’s vice president of finance, Pat Doyle. Doyle said the downward trend in state financing for higher education is “frightening” and he is planning for the trend to continue.

“We’re running out of one-time solutions to buy more time,” Doyle said. “We’re clearly going to have to do more with less.”

Doyle said the university wants to attract more out-of-state students to help underwrite in-state tuition. Aside from that idea, Doyle said, Colorado Mesa leaders are brainstorming nontraditional funding sources, although he’s not sure what those will be.


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