States are spending more than $79 billion on higher education in 2010-11, a decline of 0.7 percent from last year, according to a report being released today by the Center for the Study of Education Policy at Illinois State University and the State Higher Education Executive Officers.

While a cut of less than 1 percent might seem like a relief, given the magnitude of some of the cuts public higher education systems have faced in recent years, the report contains plenty of danger signs for the future. More than $2.5 billion of the total state spending on higher education came from the federal government in the form of stimulus funds that have now run out. Over two years, state support is down nearly 2 percent -- in a period when the same economic downturn that has left state coffers empty has also spurred enrollment increases in much of public higher education, and greater demands for financial aid. And plenty of states are talking about additional cuts for 2011-12.

"There are a lot of question marks right now and the revenue shortfalls in many states are casting a long shadow," said James C. Palmer, professor of educational administration and foundations at Illinois State and director of the study. "I don't see any indication that the states are pulling out of the recession."

Indeed, in recent weeks, California's Gov. Jerry Brown, a Democrat, has proposed cuts in state support of 18 percent cut for California State University; 16.4 percent for the University of California; and 6.5 percent for community colleges. In Texas, a draft state budget is provoking outrage because it would close four community colleges. And in Arizona, Gov. Jan Brewer, a Republican, last week proposed budget cuts for higher education that include a reduction for four-year colleges and universities of 20 percent, and cuts of 50 percent for community colleges.

The report by Palmer notes that the national average "masks considerable variations across states." Thirty-two states reported declines in state support for higher education for the year, with drops ranging from 0.3 percent to 13.5 percent. Another 16 states saw gains, from 0.2 percent to 24.7 percent. (Two states saw no change.)

Notably, however, there were six states where the percentage losses were in double digits: Missouri (down 13.5 percent); Delaware (12.4 percent); Iowa (12.2 percent); Minnesota (11.7 percent); Arizona (11.6 percent) and Oregon (10.8 percent). Only one state reported a double-digit increase: Wyoming (up 24.7 percent).

While states use different financial procedures to support higher education, the Illinois State-SHEEO study is considered the definitive source on state appropriations, with consistent rules for what is counted (state funds for operating support and student aid) and what's not (funds for building projects and tuition revenue). Federal research grants (a significant budget line for research universities) aren't counted, but the federal stimulus "stabilization" funds -- which were intended to support the operations of public schools and colleges -- are included because they support the same purposes as general state appropriations for higher ed.

While the stimulus funds continue to have a major impact this year, that impact is declining. Thirty states are spending stimulus funds on higher education support this year, compared to 43 last year. (States had some latitude on how much of the stimulus funds to spend in which year, and on the split between K-12 and higher ed.) The national proportion of total state funding for higher education nationwide that came from the federal stimulus funds (as opposed to state monies) declined to 3.5 percent this year, from 6.0 percent last year.

The following tables show changes in state support over one, two and five years (with the stimulus funds not in the base from five years ago), and the totals provided in state support for higher education this year.

Changes in State Support for Higher Education, 2010-11, over 1, 2 and 5 Years

State Support for Higher Education, 2010-11