State Appropriations Are Up ... for Now

Spending on colleges grew 7.5% for 2008, the largest percentage hike in a decade, but deficits in many states suggest tighter years are ahead. New California budget plan worries educators.
January 11, 2008

If you work at a public college or university, and it seems like budgets have been a little looser or raises a little more generous this year or last, don't get used to it.

State appropriations for higher education are indeed healthy for the 2008 fiscal year, up 7.5 percent, the largest percentage increase in a decade, according to a report being released today by the Center for the Study of Education Policy, at Illinois State University. But other studies released in the last month -- not to mention grim budget forecasts in such states as California -- suggest that this may be a peak year in terms of state support going up.

Total state support for higher education this year is currently projected to be $77,504,009,000, according to the study. That figure is based on state operating support, so it excludes funds for facilities, or funds that are provided by students through tuition. The Illinois State study -- which includes state by state totals, many of which include individual colleges -- is considered the definitive analysis of what states are spending on higher education.

Over the last decade, the percentage change in total state support has fallen as low as a 2.1 percent decrease, but has been creeping back up.

Annual Percentage Change in State Appropriations for Higher Education, 1998-2008

Fiscal Year Change From Previous Year
2008 +7.5%
2007 +7.1%
2006 +6.0%
2005 +3.8%
2004 -2.1%
2003 +1.2%
2002 +4.6%
2001 +7.0%
2000 +7.1%
1999 +6.5%
1998 +6.0%

State appropriations levels for higher education reflect many factors. But with many states having increasing percentages of their budgets set aside for various items (typically not higher education), it becomes unlikely that public colleges will receive substantial increases in years that the total budget picture isn't healthy.

"Nobody knows for sure, but I would predict that this is probably the calm before the storm," said James C. Palmer, who directs the research project at Illinois State. "I think the uptick we saw in '08 nationwide indicates that at the end of fiscal '07, the fiscal engines of many states had just enough oomph in them to increase higher education appropriations and allow higher ed to some extent to climb out of the recession we experienced earlier in the decade."

Evidence abounds that tighter times are ahead. A study by the National Governors Association and the National Association of State Budget Officers warns of "significant deterioration" of state budgets. Similar projections were released by the National Conference of State Legislatures. Kentucky is already cutting budgets for colleges (and other state entities) and higher education leaders fear worse cuts for the next fiscal year, The Lexington Herald-Leader reported.

In California, the news was bad on Thursday for next year's higher education budget. While materials released by Gov. Arnold Schwarzenegger suggested that more money would be going to higher education, university officials said that the governor was actually seeking to cut more than $1 billion from their budgets and those of community colleges. University officials were releasing statements of concern about the budget plan -- but it remains a long way from being enacted.

This year's totals have a clear regional tilt, with the percentage increases in the Southwest and Rocky Mountain states at twice the rate for New England or the Mid-Atlantic states. Over a two-year period, however, the Southeast saw the most growth, and the Great Lakes states the least. (An important caveat is that some of the regions where the growth is the greatest also are experiencing particularly rapid enrollment growth.)

One and Two-Year Percentage Increases in State Appropriations for Higher Education, by Region, for 2008

Region 1-Year Increase 2-Year Increase
New England +4.4% +11.4%
Mid-Atlantic +5.3% +12.1%
Great Lakes +4.9% +8.4%
Plains +8.7% +12.9%
Southeast +8.9% +21.5%
Southwest +11.1% +19.5%
Rocky Mountain +10.3% +18.5%
Far West +6.5% +17.4%

In terms of individual states, North Dakota has the largest one-year percentage increase this year (19.1 percent). Only two other states had percentage increases above 15 percent: Louisiana at 15.8 percent and Mississippi at 15.4 percent. Only one state this year showed a decrease: Rhode Island, which saw state support fall by 1.2 percent. But two states saw increases of less than 1 percent -- Michigan at 0.1 percent and Virginia at 0.9 percent.

The Web site of the Illinois State center features state reports, with data broken down in some cases by institution. The state totals follow.

State Appropriations for Higher Education, Fiscal 2008

State 2008 Appropriation 1-Year Percentage Change
Alabama $1,936,513,000 +14.9%
Alaska $294,270,000 +3.6%
Arizona $1,267,786,000 +14.6%
Arkansas $857,955,000 +9.3%
California $11,062,155,000 +5.7%
Colorado $737,724,000 +8.2%
Connecticut $989,436,000 +7.1%
Delaware $243,130,000 +4.2%
Florida $3,766,280,000 +2.9%
Georgia $2,410,676,000 +9.4%
Hawaii $554,292,000 +10.1%
Idaho $398,660,000 +9.5%
Illinois $2,919,547,000 +4.8%
Indiana $1,528,494,000 +4.9%
Iowa $881,031,000 +9.5%
Kansas $825,698,000 +4.7%
Kentucky $1,342,354,000 +7.1%
Louisiana $1,656,927,000 +15.8%
Maine $274,767,000 +6.1%
Maryland $1,573,339,000 +9.5%
Massachusetts $1,051,518,000 +2.1%
Michigan $2,043,409,000 +0.1%
Minnesota $1,577,102,000 +12.6%
Mississippi $1,043,246,000 +15.4%
Missouri $934,957,000 +4.4%
Montana $189,506,000 +11.8
Nebraska $616,042,000 +6.9%
Nevada $641,459,000 +7.3%
New Hampshire $133,607,000 +7.8%
New Jersey $2,040,132,000 +2.7%
New Mexico $961,418,000 +11.6%
New York $5,136,537,000 +6.8%
North Carolina $3,745,630,000 +10.5%
North Dakota $256,838,000 +19.1%
Ohio $2,377,796,000 +7.7%
Oklahoma $1,015,150,000 +6.2%
Oregon $720,365,000 +10.9%
Pennsylvania $2,193,274,000 +1.8%
Rhode Island $180,177,000 -1.2%
South Carolina $974,912,000 +13.4%
South Dakota $187,693,000 +6.7%
Tennessee $1,361,977,000 +8.6%
Texas $6,058,375,000 +11.2%
Utah $798,257,000 +13.2%
Vermont $88,195,000 +3.5%
Virginia $1,870,633,000 +0.9%
Washington $1,787,124,000 +9.6%
West Virginia $445,184,000 +14.3%
Wisconsin $1,271,724,000 +8.2%
Wyoming $280,738,000 +8.3%
Total $77,504,009,000 +7.5%

SOURCE: Illinois State University Center for the Study of Education Policy


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