State Support Slumps Again

The news will come as no surprise to the public college administrators and faculty members who've seen their budgets slashed over the past year. But an annual study of state spending on higher education finds that state appropriations for colleges and students sunk by 7.6 percent in 2011-12, the largest such decline in at least a half century.

The annual Grapevine study, conducted by the Illinois State University Center for the Study of Higher Education and the State Higher Education Executive Officers, finds that all but nine states experienced one-year declines from their 2010-11 totals. The 41 states that cut their spending did so by widely varying proportions, from as little as 1 percent (in Indiana and North Carolina) to as much as 41 percent (New Hampshire), with a full third seeing double-digit drops (see table below).

The declines, which were driven heavily by the depletion of federal funds from the 2009 stimulus legislation, leave many state higher education systems in significantly worse shape than they were in before the economic downturn began. Twenty-nine states allocated less money to higher education in 2011-12 than they did in 2006-7, and nearly half -- 14 -- provided at least 10 percent less than they did five years ago.

The Grapevine study does not examine state funding in the context of enrollments; the more-expansive annual review that the SHEEO group will publish later this winter will provide those data in a way that makes it possible to assess funding per student, which is likely to have shown an even steeper decline because public college enrollments in many states are growing. (The Grapevine figures are also not adjusted for inflation.)

Regardless, the cutbacks in state funding come at a time when many states -- and the country as a whole -- are striving to increase the number of people they educate and the number of degrees, certificates and other credentials they award. As such, "the tension between the nation's attainment objectives and drive and our fiscal condition is put in stark relief" by the Grapevine report, said Paul Lingenfelter, president of the state executives' group.

"The economy will recover, is recovering, but it's clear that a quick resurgence" in public spending on higher education -- or anything else -- is unlikely, Lingenfelter said. As a result, "institutions and decision-makers in states are going to have to figure out how we meet our attainment goals in light of the fiscal situation."

Added James C. Palmer, who directs the Illinois State center: "The question is how do we meet our stated goals for increased educational attainment in an era marked by stagnant or diminishing economic growth. It seems like we aren't going to be able to meet them by increased state funding for higher ed, at least in the near term."

As with so many public policy matters in the U.S., nowhere is that tension more acute than in California, which provides about one in seven of all higher education dollars spent by states. California cut its appropriations for higher education by $1.5 billion, or 11.8 percent, in 2011-12, to $9.656 billion from $11.160 billion.

Many of the state's public institutions, two-year and four-year alike, have restricted enrollments in the last several years, citing the cuts in state support. That outcome directly clashes with the needs of the state's rapidly expanding population, Lingenfelter said, and, "I don't think there's any question that it's going to have long-term consequences for California" and for the nation.

Governor Jerry Brown is asking Californians to approve a tax increase in November, and possible, partial recovery for public colleges in that state is heavily dependent on the outcome of that vote. But politicians in few states seem to have an appetite, or in some cases any inclination whatsoever, to raise taxes.

With revenues in many states leveling off and in some cases even beginning to climb, as the mostly jobless recovery progresses haltingly, governors in several states are proposing to increase spending on higher education this year;  see Virginia and Georgia as examples. But nearly as many, it seems, are proposing additional cuts, as in Missouri and Kentucky. And pressure is undoubtedly going to continue to grow on public higher ed systems to consolidate their operations, as leaders in Georgia and New York have done (with varying degrees of aggressiveness) in the last year.

State Support for Higher Education, 2006-7 to 2011-12