Happy Days Aren't Quite Here Again

February 28, 2006

The state budget picture has been looking better lately, much to the relief of public college officials. Fewer states are pondering big budget cuts or tuition increases -- and more governors and legislators are able to sign off on salary increases, program expansions and building plans.

Don't get used to it.

A report released Monday by the National Center for Public Policy and Higher Education warns that states are facing tough times ahead -- and a number of factors make college budgets vulnerable. The report looked at projections for state budgets from 2005 through 2013 and found that all states face deficit risks.

When states face tight budgets, colleges almost always feel the pain. Entitlements can't be cut, health care costs are rising, and law enforcement is seen both as more important and more expensive in the post-9/11 era. Given that many legislators want to protect elementary and secondary education from cuts, higher education is frequently the largest item available for scaling back.

A state-by-state analysis in the report found that 5 of the 10 states with the largest projected deficits are states that do not have an income tax: Nevada, Tennessee, Texas, Washington and Wyoming. The other states in the study's list of likely deficits are Alabama, Louisiana, Mississippi, Missouri and Oregon.

New England states and some others in the Northeast (New Jersey, Delaware and Maryland) are projected to have the smallest deficits over the next eight years.

The report was written by Dennis Jones, president of the National Center for Higher Education Management Systems.

His concluding comment: "For most states, it is difficult to see a future for higher education that recreates the prosperity of the late 1990s. Colleges and universities -- and the students who enroll in them -- are more likely to face continued financial strain."

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