Colleges and the Governors' Races

August 5, 2010

With state budget shortfalls likely to hit $180 billion in 2011, the incoming governors -- a potentially record-size pool of brand-new state chiefs -- will have a lot to take on when they take office in January. Jobs and the economy have dwarfed all other campaign issues, and higher education -- despite its link to economic development -- is unlikely to be a focal point in this year’s elections.

“Political candidates are grappling with more immediate solutions for job creation opportunities,” says Dan Hurley, director of state relations and policy analysis for the American Association of State Colleges and Universities. “I think we’ll see some [newly elected] governors bringing higher education to the top of their political agendas, but right now it’s simply not at the top of the list.”

Four years ago, higher education was one of the top issues in several gubernatorial races. But the economy crashed 13 months after the election, and the recession descended across most of the country, forcing governors to slash funding -- much of it from higher education. According to the most recent State Higher Education Finance report, state funding for higher education fell $2.8 billion in the 2009 fiscal year as a result of the recession. Federal stimulus funds worth $2.3 billion partially offset the costs, but state funding fell another $2.7 billion in 2010 and is likely to continue to fall.

The pressing need to deal with these fiscal problems is likely to force many of the new governors to continue reining in higher education spending. At the same time, however, their states will be feeling pressure to improve college completion, which President Obama has emphasized and which the National Governors Association is championing as its priority this year. The federal government has poured tens of billions of dollars into Pell Grants to do its part, but most of the heavy lifting in the college completion agenda will be left to the states, since the vast majority of American students attend public two- and four-year colleges.

These dichotomous pressures are likely to challenge the candidates -- and later, the governors -- as they establish their budget and policy priorities. Even as most are calling for decreases in overall spending, many are promising to protect higher education, though few are laying out specific plans for how to do so. After the states’ economies eventually stabilize, many candidates say they'll revisit the higher education crisis; but because they lack the money now, the next round of governors may put pressure on their public institutions to increase efficiency and improve productivity.

Addressing the Budget

The tension between the candidates' need to cut state budgets and their desire to protect and advance higher education is evident in some of the country's biggest states.

Gov. Jan Brewer of Arizona

In California, Republican candidate Meg Whitman promised $1 billion to the University of California and California State University if elected, and pledged to shield faculty and research positions. However, she has also proposed cutting 10 percent of the state work force and $15 billion worth of government spending -- much of it from the General Fund, more than half of which is devoted to K-12 and higher education.

Similarly, Arizona Gov. Jan Brewer, a Republican who is running for re-election, cut 18 percent of Arizona State University’s budget for the 2009-10 academic year. Her proposed budget for the 2011 fiscal year cuts $1.1 billion across the board, including $43 million from universities -- a smaller cut than GOP legislators wanted. She also implemented a stimulus act for the state universities, increasing funding to keep them at or above 2006 fiscal year levels, as mandated by the federal government for the acceptance of stimulus money. However, once it runs out next year, the universities may have trouble procuring the money they need to stay afloat.

In Texas, both Democrat Bill White and Republican Rick Perry, the current governor, have expressed a commitment to higher education, touting it as one of the state’s highest priorities. Perry wants to increase financial aid and provide resources to move Texas universities in the direction of becoming major research institutions. Nonetheless, this year he mandated a 10 percent spending reduction for Texas colleges and universities over the next two years, on top of an extant 5 percent cut. As a result, universities are being made to freeze tuitions, eliminate filled positions, cancel vacant ones, reduce amenities, and restructure.

“It’s going to be tough for gubernatorial candidates to go on the record to make a unilateral pledge that they will not cut higher education,” Hurley said. He added that, once in office, the governors will be crafting budgets for the 2012 fiscal year. “By then we will certainly see some positive turnaround in state revenues, but in no way are we going to be out of the woods with 50 state rebounds in economic conditions.”

Bill White, Democratic challenger in Texas

The SHEF report states that federal stabilization funds in nearly all states have been or soon will be exhausted, and state revenue has fallen at an unprecedented rate. At the same time, enrollment continues to increase dramatically, tuition has been skyrocketing all over the country, and the report states that higher education is at a "critical juncture.” Many initiatives have been formed to promote college completion, and all candidates seem to be “committed” to improving higher education. However, not many specify their goals beyond buzzwords like “affordability,” “accessibility” and “accountability.”

Jim Palmer, professor of higher education at Illinois State University, said that for states to increase funding for higher education they need two things: tax revenues and political will.

“In general I think that there is the political will, because the need for higher education is obvious,” he said. “The real question now is the question of the wherewithal. If the states simply don’t have the revenues to increase funding for higher education, they simply won’t do it.”

At this point it seems as if candidates will at least pay lip service to the idea of increasing the number of students enrolling in and graduating from college. But whether improving higher education is too idealistic a goal in this economy remains to be seen. It may be too early in the campaign season for it to be a crucial issue in any particular race, but several themes have started to emerge as candidates outline ways to improve their universities and keep down costs.

High-Demand Majors

The focus for most states lies in producing and sustaining jobs within their economies. “There is a strong opportunity for higher education stakeholders to increase the visibility of any important higher education issues on political candidates’ agendas, given the link between a skilled workforce and research and development as it pertains to economic recovery and prosperity,” Hurley said.

As a result, many candidates have proposed tuition incentives for students who pursue degrees in high-demand fields and pledge to stay in-state after they graduate:

  • In Connecticut, Democrat Ned Lamont is proposing a full loan repayment program for students who study renewable energy and remain in the state.
  • New York Republican Steve Levy aims to reduce tuition for students studying math and science and intending to work in New York.
  • Democrat Diane Denish of New Mexico proposed the “Bridge to the Workforce” community college scholarships, which offer students a free first semester if they study fields like the biosciences, business services, communications, engineering, or environmental technology. Students who maintain a 2.5 GPA would then be eligible for further scholarships.
  • Alabama Republican Robert Bentley has proposed full medical scholarships for students practicing medicine in underserved areas.
  • In Minnesota, students may have loans paid off by businesses that train them during school and hire them after they graduate.

Fixing the Mistakes

Many of the gubernatorial candidates are laying the blame on their predecessors and promising to act differently. In order to make higher education more affordable, some states' candidates pledge to restore funds to colleges and universities cut by previous administrations. Some proponents of this approach are Illinois Republican Bill Brady, Arizona Democrat Terry Goddard, and Michigan Republican Mike Cox (who pledges to restore $185 million).

“A lot of governors understand that the only way to dig their way out of this jobless economy is by not slashing and burning higher education by the high percentages they’ve cut their budgets in previous years,” said Dane Linn, director of the education division in the NGA Center for Best Practices. “If governors have increased the budgets for higher education, where do those monies come from?” he added, emphasizing the need for budget reallocation. However, the candidates who are aiming to restore funds have yet to lay out specifics about the source of that money.

Cutting duplication

“There’s a need to make better use of the money we currently have -- there’s a lot of duplication,” Linn said. “Why does every college and university have to create its own English 101 course? Does every college need its own teacher preparation course if they stopped hiring teachers?”

Many states have also recognized duplications in their university systems, and hope that excising overlapping administrative positions or academic programs will cut down costs. Candidates in Alabama, Colorado, Nevada, Rhode Island and Tennessee have pinpointed duplication in higher education specifically – either at specific institutions or across the statewide system. Many more candidates have discussed duplication across state services as a problem that needs to be solved, which may also include education.

Nikki Haley, Republican candidate in South Carolina

Some candidates have also identified duplication in the entire infrastructure of their state's higher education systems, and hope to implement some major structural changes. South Carolina’s frontrunner, Republican Nikki Haley, has proposed eliminating college and university boards of trustees in favor of a single commission of higher education, as well as getting rid of some college campuses and ending university-related economic development. Minnesota Democrat Matt Entenza wants to merge the Office of Higher Education with the Department of Education. Candidates in Tennessee may consider combining the State Board of Regents system with the University of Tennessee system, bringing all 240,000 students under the same umbrella.


When budgets started plummeting, tuition scholarships were among the first to get cut. Alabama’s growing budget deficit has endangered the participants of the Prepaid Affordable College Tuition program, which is supposed to fully fund a college education. Funds are likely to run out by 2016 and the PACT board is planning to cut each student’s allotment. Bentley is fighting to save PACT and promises full funding once capital improvement bonds are redeemed.

Georgia’s HOPE scholarship is one of the state’s biggest initiatives, successfully funding college tuition for high academic achievers. But as lottery revenues -- which fund the scholarship -- fell, the state had to dip into its reserves, and HOPE is in danger of losing its funding altogether. The candidates are vague on how they intend to preserve the scholarship, and though they want to protect it, they say its terms may have to be modified.

The merit-based Michigan Promise Scholarship was discontinued in 2009 because of financial constraints -- an unpopular decision by the governor and one that current gubernatorial candidates hope to overturn. Democratic candidate Virg Bernero, who won this week's primary, wants to restore the grant program, saying fully funding the scholarship will be a priority. Republican candidates also expressed outrage about the cancellation of the scholarship but so far have not proposed any specific plans to save it.

Alaska Governor Sean Parnell, a Republican who is running for re-election, placed a lot of emphasis on scholarships during his term and aims to continue the Governor’s Performance Scholarship, a merit-based award paying a percentage of college tuition based on high school grades. Parnell founded this scholarship in 2009 when many states were struggling financially, but asked the legislature -- which balked at the cost -- to create an endowment with $400 million from the reserve fund.


Earlier this year, a student at Kennesaw State University was the center of a controversy surrounding illegal immigrants on college campuses, and by now the issue has spread beyond Georgia. The impact of illegal immigration has made it to the top of many gubernatorial candidates’ education agendas, and it’s a particularly hot topic in Georgia. Democrat Roy Barnes and Republican Karen Handel have advocated an “Arizona-type law” -- which ratchets up the state's enforcement of immigration laws, and which the Obama administration has challenged in court -- and said that illegal immigrants should be expelled from colleges and denied admission. Republican Nathan Deal (who will face Handel in a run-off election) said illegal immigrants should not be allowed to pay in-state tuition rates.

Unsurprisingly, similar concerns have sprung up in border states like Arizona, California and New Mexico, but the issue has also taken hold in campaigns across the nation in such states as Iowa, Maryland and Rhode Island.

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