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Maintain State Spending. Or Else.

April 28, 2008

You college presidents out there likely know this: Legislators don’t much like to be bossed around. And they are not happy.

They and other state policy makers are pushing back hard against a provision in the U.S. House of Representatives’ version of legislation to renew the Higher Education Act that would require states to maintain their fiscal support for higher education or otherwise risk losing a slice of federal funding. The so-called “maintenance of effort” provision requires that states finance higher education at or above average funding levels over the preceding five years. States that don’t maintain the minimum spending levels could forfeit a specific portion of the monies provided through the Leveraging Educational Assistance Partnership (LEAP), a need-based aid program that, nationally, is funded to the (relatively) modest tune of about $64 million.

“It’s an intrusion into states' rights,” State Rep. Rae Ann G. Kelsch, a North Dakota Republican and chair of the National Conference of State Legislatures (NCSL) Education Committee, said Friday following a session at NCSL’s Spring Forum in Washington on "What's Driving College Costs?" NCSL, the National Governors Association, the State Higher Education Executive Officers and the National Association of State Student Grant and Aid Programs are among the groups that have come out in opposition to the maintenance of effort provision -- which, while included in the House version of the Higher Education Act, is absent from the U.S. Senate’s. It’s unclear whether it will remain in the compromise bill that arises from the two chambers’ continuing negotiation process.

Opponents argue that the provision amounts to a new federal mandate that could unduly hurt the low-income students who benefit from the LEAP program -- and could result in lower state appropriations in the long run, as state lawmakers would be less likely to appropriate extra monies for higher education in years of surplus for fear of having to maintain higher levels of support in years of shortfall.

“We continue to lobby against it heavily,” Representative Kelsch said. “Once they start getting involved in the appropriation process, who knows what will happen next?”

The rationale for the provision, however, is of course tied to the topic of Friday’s NCSL session on the factors driving college costs. Federal lawmakers have latched onto the provision as a strategy to keep state appropriations up and, by extension, tuition down.

“I think that is a somewhat dubious premise,” said Richard Vedder, an Ohio University professor who served on the U.S. education secretary’s Commission on the Future of Higher Education. At the NCSL event, Vedder said that in his analysis, every $1 extra in state appropriations does in fact correlate with lower tuition -- but the return to students is only 30 cents on the dollar. The balance, he said, the colleges are keeping.

But Daniel Hurley, director of state relations and policy analysis for the American Association of State Colleges and Universities, which supports the maintenance of effort provision, sees it as primarily a symbolic -- but welcomed -- recognition of the crucial role states play in influencing college costs. When states cut their funding for higher education, public colleges argue that they must either cut back on their services or raise what they charge students to balance their budgets. “This proposal is really a very modest proposal that provides a minimum level of incentive for states to provide a minimum level of support,” Hurley said in a phone interview.

“Obviously, it’s political. Governors and legislators typically probably are not, from what I’ve heard, terribly supportive, or at least the associations aren’t, but it’s more from an autonomy standpoint. When you look at the actual dollars involved and you compare it to an overall state budget, I honestly cannot believe or I cannot foresee that decisions on funding a state’s higher education system would be based on whether or not they’re going to be punished based on this provision.”

 

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