States Seek to Boost Higher Ed Budgets

Two years into the pandemic, state revenues have for the most part made strong recoveries, easing fears that COVID-19 could plunge the public higher education sector into a cycle of budget cuts akin to those prompted by the 2008 recession. Federal assistance from the three stimulus packages buoyed college and university funding even as states slashed higher education budgets—cuts they later reversed.

As governors and state legislatures work out their budgets for the fiscal year that begins in July, experts agree: states are flush and higher education will likely reap the benefits.

“We’re seeing states have fairly sizable budget surpluses that have allowed higher education agencies and state higher education systems to make more ambitious requests than they have in other years,” said Tom Harnisch, vice president for government relations at the State Higher Education Executive Officers Association.

Most governors put forward budget proposals for the next fiscal year in January and February—typically in conjunction with their State of the State addresses. Forty-six states begin their fiscal years on July 1, according to the National Conference of State Legislatures. In these states, legislatures typically hammer out and pass a budget in the summer months.

Four states operate on a different budget cycle: New York begins its fiscal year on April 1; Alabama and Michigan begin their fiscal years on Oct. 1, and Texas will enter fiscal year 2023 on Sept. 1. Some states pass biennial budgets that span two fiscal years; Kentucky, Virginia and Wyoming will pass a biennial budget for fiscal years 2023 and 2024. Connecticut, Hawaii, Indiana, Maine, Minnesota, Montana, Nebraska, Nevada, New Hampshire, North Carolina, North Dakota, Ohio, Oregon, Texas, Washington and Wisconsin passed biennial budgets last year that will extend to fiscal 2023, according to the National Conference of State Legislatures.

The Education Commission of the States, an agency that tracks education policy, is monitoring governors’ State of the State addresses this year. Of the 28 addresses the commission has reviewed, 23 have mentioned issues related to education funding or finance, Zeke Perez Jr., a senior policy analyst at the commission, wrote in a brief for Inside Higher Ed.

“Early indicators show that funding and finance will remain a priority in state budgets, legislation, and other education policy,” Perez wrote.

Governors in many states—including Arkansas, California, Colorado, Illinois, Kentucky, Louisiana, Maryland, Missouri and Virginia—have proposed overall increases to state higher education appropriations for fiscal year 2023.

While the targets of this funding vary state by state, quite a few governors have proposed increased operational spending for universities, increased tuition assistance and financial aid, and investments in state attainment goals, according to Perez.

Not every state is looking at an increase to higher education appropriations, however. In his budget proposal, Florida governor Ron DeSantis outlined $1.3 billion for state colleges and $2.7 billion for state universities, reflecting a $100 million decrease in funding for the universities.

State of the State addresses are also a good time to gauge higher education legislation trends for the upcoming legislative session. So far, states appear to be focused on college persistence and completion, financial aid, and nontuition assistance, said Sunny Deye, program director of postsecondary education at the National Conference of State Legislatures.

“We’re seeing more legislation than ever for assistance with food and housing and childcare and transportation—the things that can really eclipse the cost of tuition,” Deye said. “We’re also seeing interest in making sure that students who are in the system, and who are going into the higher ed system, get help with persistence and completion.”

Some states are looking at short-term emergency grants that would help students overcome hurdles that could force them to stop out, like loss of childcare or car trouble. Legislators want to make sure that students can graduate even with unexpected financial hardships, Deye said.

Tennessee, for example, created a program last year called the Knox Promise Complete Grants to help students cover costs beyond mandatory tuition and fees. Eligible students could be awarded up to ​​$1,500 per semester if they attend a community college or eligible four-year institution, and those attending a Tennessee College of Applied Technology could get up to $938 each trimester. Governor Bill Lee proposed a $14.5 million investment to expand college coaching work that includes these completion grants, said Emily House, executive director of the Tennessee Higher Education Commission and the Tennessee Student Assistance Corporation.

“For so many students, the margin is so thin between being able to attend class each day and having life intervene in the form of a utility bill, a medical bill, flat tires or car repairs, leading them to think about dropping out,” House said. “That’s not a Tennessee issue. That’s an everywhere issue.”

Governors’ budget proposals are just that—proposals. Legislatures will decide exactly how much money the higher education sector will receive in fiscal year 2023, and the numbers won’t be concrete until budgets are passed and signed by the governor.

In the meantime, read on for more details about governors’ budget proposals in a handful of states to watch.

Arkansas

Arkansas is looking at a $12.9 million increase to college and university funding in fiscal year 2023 as part of Governor Asa Hutchinson’s $775.6 million budget for the sector, though that increase would not be doled out evenly across the board. Four-year colleges in the state would receive a $12.2 million total budget increase, two-year colleges would get an additional $800,000 in funding and technical schools would see a $129,000 decrease in funding.

California

California governor Gavin Newsom proposed a $39.6 billion budget for fiscal year 2023.

The University of California and California State University systems would receive a 5 percent increase in base funding for five years under the proposal, with the UC system receiving $307.3 million more in ongoing funding and CSU taking home $304.1 million in additional funding.

Michael V. Drake, president of the UC system, praised the budget proposal in a statement last month.

“Gov. Newsom’s proposed five-year funding compact offers budget stability and reliable support to the University’s tripartite mission of teaching, research and public service,” Drake wrote. “This sustained commitment will enable UC to make critical long-term investments, particularly in areas that directly support our students: further expanding California undergraduate enrollment, boosting resources to traditionally low-income and first-generation students, and increasing college access and affordability for hard-working students and families across the state.”

Illinois

Illinois governor ​​J. B. Pritzker proposed $2.2 billion for higher education in fiscal year 2023—a $208 million increase from the previous year, Illinois Newsroom reported. State universities and community colleges would receive a 5 percent budget increase.

The budget would also appropriate an additional $122 million to the Monetary Award Program grants for students, $2.5 million in new funding to adult education programs and $2.3 million in new funding for minority teacher scholarships.

Pritzker also proposed spending $230 million from the general fund to pay down an unpaid balance for the College Illinois prepaid tuition program, which is no longer open for enrollment.

Maryland

Maryland governor Larry Hogan would increase the operating budget for public universities by 17 percent, or $299.5 million, in fiscal year 2023. He also proposed $349.4 million more for community colleges. Hogan’s capital budget, which funds infrastructure and other capital improvement projects in the state, includes $185 million for projects at the state’s four historically Black colleges and universities, $67 million for projects at community colleges, and another $601 million for other projects in higher education.

South Carolina

In his fiscal 2023 budget proposal, South Carolina governor Henry McMaster proposed a handful of new higher education initiatives, including a $20 million investment to address the state’s nursing shortage. The money will supplement the salaries of college and university faculty members and provide tuition reimbursement or scholarships for students enrolled in graduate-level nurse educator programs, doctor of nursing practice programs and Ph.D. programs.

McMaster also proposed $183 million for deferred maintenance at colleges and universities and $20 million to implement a tuition freeze for the 2022–23 academic year.

Vermont

Phil Scott, the governor of Vermont, has asked the Legislature to increase the University of Vermont’s base budget by $10 million. He also requested an additional $5 million for the Vermont State Colleges.