3 directions of the state budget to pursue higher education

Goff Justice announces a $20 million expansion of nursing education programs

Across the country, lawmakers are collaborating, bargaining and negotiating the details of their state budgets. The annual process could have major ramifications for higher education: Public institutions, of course, get their annual funding from their state. But private foundations will also benefit from government financial aid grants.

It’s still too early to tell where all the chips will fall this year, but here are some preliminary trends.

Tuition fee increase

Many states are running large, sometimes even historic, surpluses, said Tom Harnisch, vice president of government relations for the Association of State Higher Education Executives. But lawmakers in those places often put tax cuts before investing in other areas.

“It is disappointing that many states are prioritizing tax cuts while underinvesting in higher education in this legislative session,” Harnisch said. I fear that in a few years the crisis of these tax cuts will be felt by the states. Budget deficits will develop, and higher education will eventually pay the price.”

Some legislatures are considering tuition increases at their public universities to help cover funding. In Wisconsin, for example, the governor’s proposal would leave public colleges with an extension $130 million shortfall. The state legislature froze tuition from 2013 to 2021 and the University of Wisconsin Board of Regents elected to continue the freeze since then. Now, Republican lawmakers Suggest link fees to increase inflation.

In Nebraska, the governor’s initial proposal called for 2% higher funding for the University of Nebraska. But the rector Enterprise said It would need a percentage point more to avoid higher tuition fees and deep spending cuts.

In New York, Gov. Kathy Hochul has proposed a 3% tuition increase for students in the two state systems. State legislators opposed the increase, while the two systems’ advisors did defend ruler approach.

Inflation cut off growth

Even as states increase funds for higher education, some have said inflation will dampen the value of that new money.

“This is a hyperinflationary environment, so a 1% or 2% increase for higher education would be a cut,” Harnisch said.

Colleges also find themselves squeezed by rising prices, as inflation pushes up construction and maintenance costs and faculty members demand higher wages.

In addition, some states have to deal with deficits caused by years of non-investment that a single year of increases will not solve.

For example, from fiscal years 2000 to 2020, funding for higher education in Illinois, adjusted for inflation, accounted for a 46% reduction, according to Ralph Martier, executive director of the Center on Budget and Tax Accountability. That amounts to $1.8 billion in real dollars, he said.

“Even if the state were to pass the budget Gov. [J.B.] Pritzker just put it on the table and increased funding to top institutions by $219 million, which is a nice nominal increase of 9.7% in dollar terms, and nowhere near that real reduction of $1.8 billion,” Martyr said.

Nationally, he said, the share of revenue in public institutions that comes from state appropriations has fallen by about 11 percentage points, from 68% to 57%.

Pritzker has proposed additional funding for the state’s financial aid grant program, called the Cash Award Program. This is a good step, Martier said, but inflation continues to erode the value of those scholarships for students. In 2000, he said, the average program scholarship covered 66% of tuition fees. Today it covers 26%.

“The governor has proposed a $100 million increase in value, which is great. But that won’t come close to making up for the loss in value,” Martyr said.

Free college programs

Some states propose new free college programs or expand existing programs.

In Massachusetts, Governor Maura Healy asked $20 million For MassReconnect, a free college program for adults that builds on similar programs in Michigan and Tennessee.

Healy said statement Last month.

In Michigan, Governor Gretchen Whitmer is seeking $140 million To expand its state’s program, Michigan Reconnect, by lowering the eligibility age from 25 to 21.