Stabilization Fund
As part of the Recovery Act, the State Fiscal Stabilization Fund will help support vital state services in the face of dwindling revenue during the recession. More than 80 percent of the State Fiscal Stabilization dollars must be spent to shore up K-12 and higher education programs. The remaining 18.2 percent is dedicated to shoring up state budgets. States are allocated funds according to a formula, but state officials must still apply for the dollars and follow strict regulations and extensive reporting requirements.
According to the plan developed by Gov. Ritter's office and the legislature, $452 million of stabilization funds will go to colleges and universities and $170 million to K-12 programs. An estimated $70 million will be used to balance the state General Fund budget, $10 million is allocated to enhance the state's competitiveness for the Race to the Top education reform grants through the Recovery Act. The remaining $58 million is being set aside in case the state encounters further revenue shortfalls. The chart below details the Higher Education distribution.
With the economic downturn, Colorado was at risk of losing gains that had been made to restore state support of higher education. The Act does not allow Colorado to drop below FY 2005-06 levels of state support. The Education Stabilization Fund will shore up state resources for higher education. These funds will keep Colorado from slipping backward and will keep tuition and fees as low as possible. This is illistrated in the chart below: