Make Maintenance of Effort Permanent

Congress should regularly require states to maintain their spending on higher education, F. King Alexander argues.

January 28, 2010

When Congress wrote into the Higher Education Act renewal and then the economic stimulus legislation provisions requiring states to fund their higher education systems at a certain minimum level to receive some federal money, even those of us who favored the idea weren’t sure exactly how much impact it would have. We hoped the “maintenance of effort” provisions would achieve our desired goal – prodding state legislatures to be more responsible in maintaining their fair share of fiscal commitments for higher education – but we did not know how much it would influence legislators as they decided how to allocate statewide spending cuts for the 2009 and 2010 fiscal years.

Now we do – and the answer is that many states based their entire higher education reductions not on valid educational principles or state formulaic considerations, but on the simple threat of losing federal resources. As you can see from the table below, in their 2010 appropriations, 12 states (including Colorado in 2011) reduced their funding for higher education to the exact amount or within less than half of 1 percent of the threshold set by the maintenance of effort requirement.

The power of these data convinces me that this was not coincidental, and I hope it will convince others who worry about the future health of our public colleges and universities that members of Congress should make maintenance of effort requirements a regular part of doing business when allocating federal funds for higher education, including in the Student Aid and Fiscal Responsibility Act now making its way through Congress.

The Background

In the summer of 2008, in the final stages of passage of the Higher Education Opportunity Act (HEOA), which renewed the Higher Education Act, a conflict ensued over whether to attach a “maintenance of effort” requirement to some federal funds. The provision required that states could not appropriate less than the average state amount appropriated for the previous five years; states that failed to meet the requirement would lose their College Access Challenge Grant funds until the state provided the minimum specified amount.

Unfortunately, the College Access Challenge Grant funds constituted a small portion of the total funds under HEOA and did not have enough funding weight to influence state appropriation decisions. However, this established an important precedent for federal higher education funding, and five months later, Congress attached a similar provision to the American Reinvestment and Recovery Act of 2009, more commonly known as the "economic stimulus” bill. The provision required states to provide a minimum threshold state appropriation of not less than the 2006 appropriated levels. Falling under that threshold would put a state in jeopardy of losing significant federal stimulus money.

Critics of this kind of federal leverage claimed that it would prove to be counterproductive or would have no impact whatsoever on state legislative behavior. Supporters of the requirements, including Reps. George Miller of California and John Tierney of Massachusetts, reasoned that state legislatures would be more likely to maintain their fair share of fiscal commitments for higher education if the federal government established a floor below which states could not go.

Recent state appropriations data clearly show that many states based their entire higher education reductions not on valid educational principles or state formulaic considerations, but on the simple threat of losing federal resources. As Table 1 shows, Arizona, California, Illinois, Louisiana, Michigan, Montana, Ohio, Oregon, Tennessee, Utah, and Washington came within a hair of the minimum in 2010. In fact, state higher education allocations in Oregon for 2010, matched the federal threshold amount precisely. Tennessee reduced its higher education budget by over $70 million, to within $34 of the federal requirement and the 2006 funding level. California exceeded the federal spending threshold by only $2 million in a budget totaling $8.8 billion for higher education.

STATE FY 2010 FY 2009 FY 2006 (Maintenance of Effort floor) FY2010/MOE Difference
Arizona $987,424,100 $1,040,924,100 $987,239,500 $184,600
California $8,859,424,100 $8,946,000,000 $8,857,000,000 $2,424,100
Colorado (2011) $555,289,004 $555,289,000 $555,289,004 $0
Illinois $1,605,024,500 $1,657,594,043 $1,604,852,068 $172,432
Louisiana $959,990,046 $1,277,707,304 $959,089,177 $900,869
Michigan $1,675,828,097 $1,733,194,351 $1,670,594,828 $5,233,269
Montana $132,762,756 $162,524,979 $131,297,110 $1,465,646
Ohio $1,778,565,127 $2,087,134,229 $1,774,042,156 $4,522,971
Oregon $554,534,240 $584,622,225 $554,534,240 $0
Tennessee $1,110,883,000 $1,193,641,100 $1,110,882,966 $34
Utah $671,133,700 $733,359,600 $667,550,500 $3,583,200
Washington $1,316,526,000 $1,584,717,000 $1,313,609,000 $2,917,000

A few states do not appear on this chart because they have taken advantage of an exception in the maintenance of effort provision that allows states to seek special waivers from the secretary of education if they have “exceptional or uncontrollable circumstances.” The waivers basically allow states to reduce higher education appropriations below the 2006 funding levels, and South Carolina, Rhode Island, Nevada, Massachusetts and Kentucky have already done so.

What do these recent developments mean? First, they clearly demonstrate that states respond to federal mandates of this kind, and I believe that all federal funding for higher education should be leveraged in this way to force state legislatures to maintain their funding responsibilities for public higher education. Similar leverage has been applied for federal K-12 funding since as far back as 1965, and is now in play with federal Medicaid matching funds. Before 2008, states routinely cut public higher education funding, allowing tuition and fees to rise significantly, and increasingly used federal funding to “supplant” state commitments.

In numerous states, maintenance of effort changed the dynamics of that troubling trend, and to keep doing so, Congress should make such provisions part of every new federal higher education law, including the student loan reform bill that will hit the U.S. Senate floor next month.

SAFRA is expected to provide $87 billion in higher education funding over the next nine years, and leveraging these funds to keep states from removing themselves as part of this “shared responsibility” will be critical to ensure that the new federal funds do not simply “supplant” state funding and negate new federal resources over the next nine years. This kind of important language should be supported by advocates for public higher education nationwide.

Second, allowing state legislatures to opt out of these crucial fiscal requirements through a waiver process simply permits states to return to a pre-MOE period wherein the vagaries and inconsistencies of state legislation supersede the increasing educational needs of students.

If waivers are granted, state legislatures will have no statutory or regulatory limits as to how much they will be permitted to reduce state funding for higher education. As these state appropriations data clearly show, if more waivers are granted, more substantive state budget reductions will follow, leading to even more restricted student access and much higher tuition and fees in those states. This would place in much greater jeopardy our ability as a nation to achieve President Obama’s 2020 higher education attainment goals while also meeting increasing state demands to produce more college and university graduates.


F. King Alexander is president of California State University at Long Beach.


F. King Alexander is president of California State University at Long Beach.


Be the first to know.
Get our free daily newsletter.


Back to Top