State Higher Ed Budgets Rebound

State spending on higher education is up, after years of cuts, but public colleges are not yet receiving as much in appropriations as they were before the recession. In the current budget year, which began for most states last July, 40 states increased funding for public colleges, according to the annual Grapevine report released today by the Center for the Study of Education Policy at Illinois State University and the State Higher Education Executive Officers.

“What we found in this year’s survey is that the trend is up nationwide, which I think reflects that the economy is a little bit better," said Jim Palmer, the report’s editor. “Historical trends indicate that state support for higher ed tracks the economy.” 

Over all, state funding for higher ed is up 5.7 percent in the current budget year. That's a significant turnaround from just two years ago, when state funding dropped by nearly 8 percent. A recovery of sorts began in most states in previous budget cycle, when 31 states increased funding.

A nuanced view of this year's budgets, though, shows just over half of that the real dollar increase comes in three large states, California, Florida and Illinois. In Illinois, much of the new higher ed funding has not gone into the classroom but toward shoring up pension funds. Some increases in other states were extremely modest, like a 0.8 percent increase in Hawaii, and others significant, like the 27 percent increase in New Hampshire.

But, like most of the rest of the country, the increases in those two states last year have yet to restore the funding that was cut following the recession: Hawaii and New Hampshire are both among the 31 states in the country that are spending less on colleges now than before the recession, even before adjusting for inflation. 

Even colleges in states like North Carolina, which is spending slightly more now than it did before the recession, are seeing signs of stress on their systems, and the state college system is Pennsylvania, where funds are 18 percent below where they were in 2009, are going through rounds of budget-based layoffs.

Louisiana, Arizona, Nevada and New Hampshire are furthest from where they were in the 2009 budget year.

In Louisiana, for instance, state colleges received $1.7 billion five years ago, the budget cycle just before states saw widespread effects of the downturn. In the current budget, the state’s college are operating with $1.1 billion — about a third less money.

W. Clinton Rasberry Jr., the chairman of the Board of Regents in Louisiana, which overseas four higher ed systems, said part of the problem is that the state’s laws put higher ed and health care "last in line" for state money. Still, he said he’s optimistic the state will get new money soon.

Governor Bobby Jindal will present his budget to the legislature next week. “Anything short of more cuts for us is good news and I think there is good news coming,” Rasberry said.

In West Virginia, the higher ed systems is in an unusual position among states: it has avoided cuts during the worst of the downturn — largely because of federal stimulus dollars — but has to make them now because of declining tax collections and shortfalls driven in part by long-foreseen increases in Medicaid spending.

Last year, the higher ed system had to deal with a 7.5 percent cut in higher ed funding and will likely be making the same sized cut this year, said Chancellor Paul Hill. Like in Louisiana, certain things — particularly K-12 education in West Virginia — are protected, while higher ed funding is not.

“We’re not greedy; we understand that there are types of needs, people within the state that are dependent on that budget, and revenues are running low,” Hill said. “At the same time, we feel that two years in a row majority of it is difficult for us to take.

Still, budget officials in West Virginia expect the belt-tightening to end for higher ed by 2016.