Waiting for Recovery

May 4, 2010

DENVER -- State support for higher education tends to be cyclical -- a fact that's been comforting to many who study or teach at public colleges and universities that have been facing budget cuts these past two years.

But research presented here Monday at the annual meeting of the American Educational Research Association suggests that while you can still assume that what goes down will come up, you can't assume it will happen any time soon. The research asserts that the time it takes states to restore deep cuts has grown longer in the last 20 years. Further, the research suggests that states that imposed large tuition increases, have centralized governing boards, or are located in the West may have to wait a particularly long time for cuts to be restored.

The paper's authors -- William R. Doyle of Vanderbilt University and Jennifer A. Delaney of the University of Illinois at Urbana-Champaign -- note that there are so many states with deep cuts this year that the magnitude of those reductions could become less significant than the question of "how long it will take to regain pre-cut levels of state support." (Delaney presented the research here; floods in Nashville kept Doyle from attending.)

Doyle and Delaney analyzed data on state support for higher education between 1979 and 2007. To focus on significant cuts, they counted as a reduction a budget that was 5 percent less than what was provided the previous year (adjusting for inflation), and then counted as a recovery when the state was again providing pre-cut levels of funds. The pattern over time has always been to return to pre-cut levels, and for many to do so relatively quickly.

Their first key finding is that it is taking more states longer to recover than used to be the norm. In the 1980s, they found no state stayed in the "risk set" (when it was waiting for funds to be restored) for longer than seven years, and that 76 percent were restored within five years. In the 1990s, they found that 42 percent had not been restored within five years. By this decade -- even before the cuts of the last two years sent many more states into the "risk set" -- the researchers found that only 40 percent of states are recovering in five years.

With five-year recoveries becoming the exception rather than the rule, the scholars wanted to find out if there were factors that correlated with speedier or slower recoveries. They did not find significant correlations with states being governed by Republican lawmakers or having a large population of senior citizens -- both factors that some might think would result in stingier spending on higher education. What they did find was a correlation between geography (being in the West is associated with a delayed recovery); governance (centralized state governance is associated with delayed recovery) and tuition policy (larger increases are associated with a delayed recovery).

As Delaney noted, the tuition finding could be particularly relevant -- given that many state higher education systems have said that they have no option right now but to approve large increases.

"We know that very frequently, the first response [to large cuts] is to turn around and raise tuition," she said. But the findings suggest that when higher education systems do that, "state legislators are looking and saying 'they are getting money from elsewhere' " and thus may not be as worried about restoring budgets.

Delaney stressed that the paper was not designed to suggest that there is any one perfect response to deep budget cuts. But she said that the authors hoped to encourage states and their higher education leaders to recognize the potential for a long downturn and to focus on "how long these cuts are going to last."

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