DENVER — Department of Higher Education Executive Director Dr. Angie Piccione and senior staff told the Joint Budget Committee on Wednesday that the department submitted a budget that emphasizes targeted program cuts rather than across-the-board reductions and includes requests to sustain rural institutions and restore one-time accounts.

At the start of the hearing, Piccione said the department’s packet would focus the committee’s questions and that staff were “ready to address any questions that you may have over the next 90 minutes.” Crystal Collins, the department’s chief financial officer, led detailed answers to common budget questions.

The department asked the JBC to consider several items in the governor’s November 1 request and January 2 supplemental letter. Most immediately contested among committee members was a supplemental or budget amendment to provide $7,300,000 in general fund operational support for Colorado’s rural-serving public institutions, a funding stream the administration previously added for fiscal year 2024–25 that the governor’s staff proposed to annualize temporarily while a new funding formula is developed.

“Those funds were identified in 24–25 for support for institutions,” Collins said, adding that the governor and the commission expect the funding formula review process to address rural supports in more detail as the commission develops a proposed formula for the legislature. Several committee members pushed back: Representative Matt Taggart and others said their intent in approving the step‑1 funds last year was to build base funding for rural institutions, not to make the money contingent on future formula changes. Senator Kirk Myers said the funds were added to the long bill to be ongoing.

Collins and Piccione repeated that statute requires a funding formula review and that the commission plans stakeholder engagement. Collins confirmed the commission’s report timeline is set for November 2025 but that statute sets a deadline no later than November 2026.

Other notable budget items discussed:

- College Opportunity Fund shortfall: Collins told the committee that House Bill 24‑1424 required a transfer of $1,496,000 from the private school portion of the College Opportunity Fund to the state treasury. Because actual private school COF participation generated only $1,260,000 available for transfer, the fund is in a deficit of about $243,000; the department requested a supplemental to make the account whole.

- Cybersecurity supplemental roll‑forward: Dr. Tricia Johnson, deputy executive director, described work funded after the department’s summer 2023 ransomware event. The General Assembly provided one‑time funding (about $920,000) for data governance and integration; the department has contracted with a vendor and asked to roll forward the unspent one‑time funds into FY 2025–26 so the work can be completed.

- R1 operating support: The department recommended a $12,100,000 increase in general fund support for institutions in FY 2025–26 and an additional $2,300,000 for state financial aid. Collins said the R1 package also includes an allocation to help institutions meet the costs of the Cowen’s agreement for classified employees; the department estimated the total Cowen’s cost for classified staff at public institutions at about $13,700,000 and calculated a general‑fund proportional share of roughly $7,800,000.

- Transparency bill proposal: The department proposed legislation to standardize and codify certain financial reporting from institutions to improve the department’s ability to measure institutional financial health and compare data across campuses. Collins said the department is in the “very early stages” of stakeholder conversations and that the department itself requested the proposal be included in the November 1 submission. Some committee members objected to drafting legislation before direct engagement with institutions and expressed concerns about administrative burden; Collins said the department is not seeking funding for the effort and hopes standardization will reduce, not increase, reporting burden.

- Financial aid and outreach FTEs: Piccione and Collins described two positions (a FAFSA coordinator and a CASFA coordinator) that the department hired to meet statutory outreach requirements. Director Piccione and Crystal Collins reported the outreach team presented at nearly 150 events in AY 2023–24 and reached approximately 11,000 attendees. The department is seeking ongoing funding to sustain those positions after they were initially supported with one‑time dollars.

- PSEP roll‑off (Professional Student Exchange Program): The department recommended a phased roll‑off that would stop new enrollments while protecting current students. Collins said roughly $325,000 in outstanding debt was identified for former participants; that amount had declined to about $290,000 as students made payments. The department estimated it expects to collect another roughly $270,000 by the program’s final year, leaving about $20,000 outstanding by June 2028, and said it is open to contracting with a collection agency for long‑running delinquencies.

Why it matters: The department’s requests and the committee’s questions reveal two tensions that will shape the budget debate: whether last year’s rural funding should be treated as base building or redirected into a revised funding formula, and how far the legislature should go on transparency and standardized reporting without adding new administrative costs to institutions. Members repeatedly stressed they intended the recently adopted rural dollars to be durable support for smaller campuses.

Department staff fielded extensive technical questions, including statutory authority for the commission (Title 23), budget accounting rules for the COF, and timelines for the commission’s formula report. The hearing closed with follow‑up items the committee requested, including statutory citations for commission authority and a breakdown of COSI (Colorado Opportunity Scholarship Initiative) carryforward details.

The department’s packet and the JBC staff materials include line‑by‑line requests; the committee indicated it would pursue follow‑up questions in figure setting and later hearings. The department said it would provide more detailed citations and data requested by members.

Ending: The hearing produced no formal action votes. Committee members signaled continued skepticism about using the formula review as the primary vehicle to determine whether step‑1 rural supports should be treated as base funding. Members requested written follow‑ups on the COF accounting, projected carryforwards for COSI, statutory references for the commission’s authority, and additional detail on the transparency bill stakeholdering process.