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Home » Clarion » 2013 » August 2013 » Around US, Funding Drops for Public Higher Ed

Around US, Funding Drops for Public Higher Ed

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State support for public higher education in the US has been in steep decline since 2008, thanks to repeated austerity measures enacted in the wake of the Great Recession. In some states, alternatives to deeper austerity are starting to get political traction – but the damage has been severe, and the lost ground will not be easy to regain.

According to a report from the Center for Budget and Policy Priorities (CBPP), state funding for higher education has plummeted 28% per student since the 2007-08 fiscal year, after adjusting for inflation. In the last year alone, state funding for higher education fell 7%.

Tuition increased sharply in the same period: between fiscal year 2008 and fiscal year 2013, annual tuition at four-year public colleges grew by 27%. “The decline in state funding and the resulting rise in tuition since the start of the recession have accelerated a longer-term cost shift from states to students and families,” the CBPP notes. In 1987, net tuition made up 23.3% of public higher education revenue, but by 2012 the share from tuition rose to 47%. In 2012, net tuition revenue per student hit a historic high of $5,189.

Tuition Increases

But increased reliance on tuition has left public colleges and universities with less money overall. According to an annual report from State Higher Education Executive Officers, “even after adding revenue from tuition increases,” public colleges’ total revenue per student “decreased 8% on average between 2007 and 2012.”

Cuts in state higher education funding have been near universal in the last five years: only Wyoming and North Dakota increased state spending in this period. In all, 36 states reduced funding by more than 20%, while 11 slashed it by more than one-third. Arizona and New Hampshire have cut state support in half.

Pennsylvania is a relatively typical example: its spending on public higher education sank 29.9% per student between fiscal years 2008 and 2013, slightly above the national average. As in many states, the deepest cuts have come in the last couple of years, after federal stimulus aid to the states ended in 2011. In that year, Republican governor Tom Corbett asked for a stunning 50% reduction in a single year for his state’s aid to higher education. In the end, the legislature reduced it by “only” 20%.

Pennsylvania students protest a 20% cut in state support for public higher education enacted by a Republican governor and the state legislature. The cuts have led to tuition hikes and program rollbacks.
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Corbett tried for deep cuts again in 2012, and while the Republican-dominated legislature stopped him, they did nothing to roll back the previous year’s losses. Corbett’s 2013 budget flat-funded higher education aid, locking the old cuts into place and making them the “new normal.”

The result has been both tuition hikes and rollbacks of programs and positions within Pennsylvania’s state university system, from faculty positions to cross-country teams to nursing programs to the infrastructure that helps low-income students adapt to campus life. The Advising Center at Kutztown University, for example, was recognized in the 2009 Handbook of Career Advising for its “exemplary practices” in academic advising. It was eliminated in 2011.

Decimated Programs

“I work with at-risk students, and the administration is stripping away the programs to retain and support those students,” says Kevin Mahoney, associate professor of composition at Kutztown University. “I’ve been here for ten years and every year it gets harder and harder to do my job. I’m in the best department I’ve ever worked in, with some of the most dedicated people I’ve ever worked with. I work with awesome students, but I walk away at the end of the day and I hate my job. Because of that constant drumbeat of cuts, we are not able to do the very thing we are supposed to do.”

These deep cuts were not unavoidable. As the CBPP points out, “states could have reduced the size of spending cuts by enacting significant new revenues,” but most legislatures chose not to. Last year in California, however, voters made a different choice.

Higher education spending by California has declined by 29.3% per student in the five years since the start of the recession. But in November 2012, Californians approved a measure raising taxes on the rich, along with a quarter-cent sales tax increase, to secure $6 billion for public schools, higher education and a variety of other social services. Ninety percent of the new revenue will come from higher taxes on the wealthy.

This push to tax the rich was led by the California Federation of Teachers (CFT), which built a coalition around a straightforward “millionaires’ tax” proposal. Two rival tax initiatives, one of them launched by Gov. Jerry Brown, relied on tax increases that would apply broadly across income levels, since their backers did not want to “demonize the rich.” But the CFT’s plan consistently polled better than its rivals, and Brown eventually asked to join forces with the CFT around a compromise proposal: Proposition 30 was the result.

While somewhat less sweeping than the CFT’s original plan, Prop. 30 marked a major change in California’s fiscal direction. “It is the single largest progressive tax passed in the state since World War II, both in the amount of revenue raised and as a percent bump on the income taxes of the wealthy,” CFT Communications Director Fred Glass wrote in Labor Notes.

The new funds have allowed every level of the state university system to avoid the budget cuts and tuition hikes that had been expected this year. But this is not enough to roll back the tuition increases and budget cuts inflicted on the state’s public colleges in recent years.

“It wasn’t that Prop. 30 added more money to the university budget, but it prevented even more cuts from happening,” says George Kieffer, one of the 26 members of the University of California’s Board of Regents. As the president of the California Teachers Association, Dean Vogel, told the Huffington Post, “Prop. 30 stopped the bleeding” – and that’s a major change. But the limits of its success show just how deep a hole California has dug itself into.

While Gov. Brown has said he opposes further tax increases now that Prop. 30 has passed, additional revenue sources will be required if California’s public universities are to regain lost ground. As the CBPP has stressed, “Economic growth in and of itself will not be sufficient to propel higher education funding to previous levels any time soon.”

Passage of Prop. 30 thus meant victory in one battle, not the war – but it did change the terrain on which the next battles will take place. As the CFT’s Glass observed, its 55% approval has “reshap[ed] the decades-old understanding of California as an ‘anti-tax’ state.”

Free state-provided higher education was once normal practice in several states, including New York; today it is usually seen as a utopian idea. But in 2013, a version of that idea has been advanced in an unexpected corner of the nation: Arkansas.

While campaigning for the Democratic nomination for governor, former Lieutenant Governor Bill Halter advanced a proposal he called “The Arkansas Promise.” The plan called for an in-state tuition scholarship for any student graduating from an Arkansas high school with at least a 2.5 GPA. After a student received federal, state, local or private financial aid, the state would cover the rest of the tab, up to a maximum equal to tuition at the priciest public university in Arkansas.

Arkansas Promise

Halter said he was inspired by the “El Dorado Promise,” created by Murphy Oil Corporation to provide tuition-free college education to students in the central Arkansas town of El Dorado, where Murphy Oil is based. “If a company, whose main concern is its shareholders, if a company can make that investment, then I defy you to tell me why we, the state of Arkansas, cannot do the same thing,” Halter said.

Halter recently withdrew from the race, saying that he was endorsing his rival Rep. Mike Ross in order to spare the party a divisive primary. (Ross has raised $1.7 million, more than twice as much as Halter.) But the Arkansas Promise proposal was described positively in news coverage of both Halter’s campaign and his withdrawal, and the fact that a savvy, ambitious politician would advance such an idea caught the attention of the state’s political insiders. Arkansas is currently ranked 49th in the nation in the percent of adults with college degrees.

The political limits of Halter’s plan could be seen when he insisted that no new taxes would be needed to pay for it, saying that several existing revenue streams, including a state lottery that funds college scholarships, could do most of the job.

In Arkansas, state support for public higher education has declined 19% per student since the recession began, a reduction of $42 million overall. If that $42 million is to be restored, it has to come from somewhere. (Arkansas, it should be noted, is also the home state of Walmart’s Walton family, collectively worth about $93 billion.)

CBPP analysts emphasize that the damage caused by austerity in public higher education cannot be overcome without additional revenue measures. Even if spending rises in tandem with an economic recovery, they say, this growth alone will leave public colleges and universities at a net loss.

Cost Shift

“The cost shift from states to students has not occurred in a steady, straightforward way,” the CBPP explains. “During and immediately following recessions, state and local funding for higher education has tended to plummet, while tuition has tended to spike. Funding has tended to largely recover, and tuitions have tended to stabilize, during periods of economic growth.” But the recovery never quite catches up with the cuts, resulting in a long-term negative trend.

Overall, “states have been reducing their contributions to public higher education, while students have been picking up a larger share of the costs.”

On the ground, that means that college has become less accessible over time. “Temple is one of the best equalizing institutions in Pennsylvania because they do accept a lot of students who really wouldn’t be able to go to a good school on their parents’ incomes,” says Brett Wise, a junior at Philadelphia’s Temple University and a member of student government. But Wise has several friends who may drop out if tuition continues to rise: “If it keeps going up, it is going to become less and less of an equalizing institution and more just another school where you’ve got to pay a lot to get in.”


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