My Fellow Lynx Community,

I am writing to provide an update on the governor’s budget proposal, which was published on Oct. 31, and its potential impact on our CU Denver campus as we begin budget planning for the 2026-27 fiscal year.

As you may have heard when the governor called a special legislative session in August, the passage of H.R. 1 (the Big Beautiful Bill) at the federal level had an immediate impact on the state’s fiscal health, creating a $1.2 billion revenue shortfall because of the bill’s retroactive changes. In fiscal year 2026-27, H.R. 1 is expected to result in a loss of approximately $610 million in general fund revenue. Re-balancing the State of Colorado budget resulted in a $9.5 million operating reduction for higher education, which led to a reduction of almost $500,000 in state funding for CU Denver in this current fiscal year.

Governor’s Budget Proposal

The governor’s 2026-27 budget request proposes a continuation of the August higher education reduction, but also a reallocation of $10.6 million in operating support across all of Colorado’s colleges and universities. There are two funding formulas for allocating state support across higher education currently under consideration:

• the current formula would provide the CU System with a $2.8 million (1.2%) increase.
• a new formula proposed by the governor would result in a $1.1 million (0.5%) increase.

This latter formula is predicted to provide a 0.9% increase in state support for CU Denver because of the internal CU system allocation process. The governor’s proposal also addresses tuition, with limits on in-state tuition increases to 2.6% (equal to the inflation rate), and a 3% increase for out-of-state students.

Impact on CU Denver

What are the implications for CU Denver? Our initial planning starts with an assumption of essentially flat state support, and a continuing emphasis on enrollment as the principal driver of our general fund revenue. The hard work of the 2022 through 2024 budget reduction process has led to increasing fiscal confidence, bolstered by this year’s improvements in admissions and retention. Assuming that this enrollment trend continues, we will be able to face other environmental headwinds in a strong position. But there’s a lot of uncertainty this early in the planning cycle.

We are very likely to experience ongoing external drivers. They include uncertainty for our international students’ ability to come to Denver, the impact of our new CU Denver Direct agreements, shifting policies about federal funding, changes at the Department of Education, the state economy, etc.

Our New Budget Model

The final details of the new budget model recommendations from the Budget Allocation Review Committee (BARC) are also being finalized, with the most recent being a historical analysis and decision on the school and college (65.5%) and administrative split (34.5%), and a proposed process for requesting funds from the Temporary Initiative Pool, which will be discussed at the Campus Advisory Committee on the Budget (CACB) in December. The last remaining determination is that of the “subvention” levels, which help to ensure a thriving variety of programs across all schools and colleges. That decision will be made by the provost after a review of opportunities and impact, as well as consultation with the deans.

Once the subvention calculations are complete and spring enrollment numbers are finalized, the Budget Office and members of the BARC will assess the efficacy of the new model in anticipation of full implementation for the 2026-27 fiscal year.

What’s Next

Preliminary budget projections, based on our enrollment forecast and historical data, will be submitted to the Board of Regents in early February. This process runs parallel to the legislature’s budget process which wraps up in April. The Board of Regents approves financial plans at its June meeting. It is CU Denver’s commitment to our students that impels us. It is through our alignment on student success, innovative teaching and research, process improvements and enhanced use of technology, and the initiatives associated with the Strategic Plan Refresh that will keep us steadily moving forward.

I’ll share another update in the spring semester. Thank you for your dedication to CU Denver’s mission of supporting lifelong learning and serving students.

Warm regards,

Ann Sherman
Executive Vice Chancellor for Finance and Administration