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In the News

State Funding Upturn

“Inside Higher Ed” has an informative article that highlights the Washington State Legislature and the increase in state funding for our state’s higher education institutions, including Washington State University. The article highlights possible reasons for why many (but, not all) legislatures are beginning to reinvest in public higher education after years of disinvestment. WSU Impact is heartened to see that one of the hypotheses is the growing coalition of citizens, opinion leaders, and higher education officials working together with legislators to appreciate the value of higher education and college degrees.

Doug Lederman – INSIDE Higher Ed

Invest in higher education in good times, drain it (and expect students and  families to make up the difference) when the economy sours. State governments  have embraced that pattern for decades, even as many analysts deride it as flawed  if not foolish.

As most states set their budgets for the 2014 fiscal year this spring and  early summer, public higher education fared better than it has in several years.  The American Association of State Colleges and Universities reported last month that 37 of the 48 states for which it  had received information showed year-over-year increases in operating support  for public colleges and universities, with an average gain of 3.1 percent over  2012. That compared to 30 states showing increases from fiscal 2012 to 2013, and  just eight on the plus side from 2011 to 2012. The fact that these increases  come as college enrollments in many states actually begin to slow makes them all  the more significant.

Particularly significant increases came in states such as Massachusetts (16.8  percent) and Washington (12 percent) where recent budgets have left public  colleges struggling. (The positive picture is far from universal, of course;  Louisiana subjected its public higher education system to yet another cut, of 17  percent, in 2014 and West Virginia and Wyoming imposed cuts of 5 percent or  more.)

Legislators in many states purposefully accompanied those increases with frozen (or severely constrained) tuition, a clear response  to the political and public pressure about the rising price of college,  evidenced by President Obama’s barnstorming tour on the issue this week.

The 2014 legislative successes should allow institutions in numerous states  to offer raises for the first time in several years, and to continue (or in some  cases begin) to reinvest in programs or initiatives that have been cut or put  off over several bad budget years.

That is a much more pleasant climate for campus leaders to operate in than  was the one that has prevailed in recent years. On the question of whether the  funding upturn represents merely a return to the normal cycle of increases in  good times and cuts in bad, higher education officials are hopeful — if not  quite confident — that something more is at play: a recognition by political  leaders that higher education is essential to drive individual and state  economic success.

“This is first and foremost about improved economic conditions in the  states,” says Daniel J. Hurley, director of state relations and policy analysis  at the state college association. “But there is some evidence that higher  education has been prioritized to a higher degree than what current state  conditions would have portended.”

The Context

Few state-funded enterprises have fared particularly well in recent years, as  2008’s downturn drove most state economies into a tailspin that exacerbated  structural deficits that had plagued many of them for years previously. State  funding for higher education fell for several years, and the situation was worsened by  the fact that enrollments in many places grew, with funds failing to keep up. Funding per student reached historic  lows in 2011.

Those trend lines raised concerns in many quarters about a perceived public  disinvestment in higher education — ironically, they often noted, at a time of  growing recognition (rhetorically, at least) of the importance of postsecondary  credentials for the economic success for individuals, states and the  country.

The specter of disinvestment has been raised most frequently in places such  as California, where legislators considered (but ultimately tabled) a plan that  would have required state institutions to award academic credits for courses  from third-party providers. Faculty and other groups noted in their pushback  against the idea the irony that lawmakers were turning to outside providers to  help solve a problem — public colleges’ inability to meet the higher ed demands  of Californians — created by the state’s own failure to fund its institutions.  Last November Californians approved a ballot measure that raised taxes to stem further  cuts and allow for some reinvestment.

In that context, the turnaround in state revenues couldn’t have come at a  better time for state leaders and public college officials. This summer’s report  from the state college association found that while some states increased  operating spending on higher education only marginally, many did in the 5-7  percent range, as seen in the table below.

And a  report this month from the National Conference of State Legislatures showed  that state general fund spending on higher education, on average, grew more than  for any major category other than Medicaid — 5.1 percent for higher education,  compared to 5.9 percent for Medicaid, and 2.5 percent for elementary/secondary  education and corrections.
Change in State Funding, Fiscal 2013  to 2014

State % Change, FY2013 -FY2014 State % Change, FY2013 -FY2014
Alabama 1.8% Montana 8.7%
Alaska 3.6% Nebraska 4.0%
Arizona 4.1% Nevada 2.1%
Arkansas 1.6% New Hampshire 28.6%
California 5.0% New Jersey 0.0%
Colorado 4.4% New York 0.0%
Connecticut 4.8% North Dakota 10.7%
Delaware 3.4% Ohio 2.3%
Florida 11.0% Oklahoma 1.0%
Georgia 2.8% Oregon 7.0%
Hawaii 1.0% Pennsylvania 0.0%
Idaho 3.8% Rhode Island 6.4%
Illinois 0.2% South Carolina 3.0%
Indiana 3.1% South Dakota 7.5%
Iowa 2.6% Tennessee 7.8%
Kansas -3.3% Texas 6.2%
Kentucky 0.0% Utah 7.0%
Louisiana -17.6% Vermont 3.0%
Maine 0.0% Virginia 3.3%
Maryland 9.0% Washington 12.0%
Massachusetts 16.8% West Virginia -8.9%
Michigan 2.0% Wisconsin -2.9%
Minnesota 6.8% Wyoming -6.0%
Missouri -1.0% 48 State Avg:  3.1%

Source: American Association of State Colleges and  Universities

Some of the biggest gains came in states where higher education officials —  often joined by business leaders and faculty groups — engaged in sustained,  coordinated efforts to make the case for “investment in,” rather than “spending  on,” higher education as a key driver of work force preparation, economic  development, and general well-being in the state.

Lawmakers in Washington State in June approved a 12 percent increase in  spending on public higher education, which college leaders hope will be the  first step in reversing cuts that have seen the share of the cost of providing  higher education fall from about two-thirds to just over a third.

Campus leaders like James L. Gaudino, president of Central Washington  University, attributed the improved budgetary situation for public colleges to  an upturn in the state’s economic situation, which was better enough that  legislators did not need to “squeeze” higher education to cover costs of other  social programs as it has in the recent past.

“Clearly it’s a sign that the economy is a little better — that’s the key,”  Gaudino said. But he also sensed a “dynamic” that is different from what he’s  seen in his five years in the state. “There has been a mentality that you feed  higher education in good times because you can,” he said, letting the negative  corollary go without saying. “But we’re now seeing a partnership among business  leaders, government leaders and higher education that now realizes that if we  don’t invest in higher education, our economy won’t be strong…. [State  leaders] are starting to realize that this is really an investment, not unlike  an investment in transportation infrastructure.”

A Push for 50/50 Funding

Having watched the state’s share of funding higher education slip to a third  from two-thirds just a few years ago, some legislators in Washington State have  pushed the idea of returning to a 50/50 split.

That goal underpinned the budget conversation across the country in  Massachusetts this year, where higher education leaders — joined in ways that they historically haven’t been by a coalition of faculty, staff and  student advocates  — persuaded politicians in the state to support a  two-year plan to raise back up to 50 percent the share of public colleges’  academic budgets covered by state funds (and concurrently lower to 50 percent  the proportion covered by student tuition).

The 16.8 percent increase the legislature provided for the state’s public  colleges and universities — two-year and four-year — led the institutions to  abandon or avoid tuition increases of about 5 percent, and the state’s  commitment of additional funds for next year should get the University of  Massachusetts to the 50/50 goal, said its president, Robert L. Caret.

Like Gaudino, Caret said he believes the budget outcome in Massachusetts  represents more than just a make-good on years of bad-times budgets.

“I see a tectonic shift in terms of legislative understanding of the need to  invest in our citizens of the future,” he said. UMass has spent the last few  years proving that it is operating as cost-effectively as it can, Caret said,  and that, combined with the campaign to herald higher ed’s importance to the  state economy, is now paying off.

Massachusetts provides at least some evidence that budgets for higher  education aren’t rising just because states are flusher than they’ve been; while  the state’s overall budget went up, funds for transportation were slashed (much  to the dismay of city leaders), and money for higher education grew more than  for most other purposes. So higher education was prioritized over other things,  a phenomenon that the National Conference of State Legislators’ report suggests  was the case elsewhere, too.

Contributing mightily to the budgetary outcome in Massachusetts was the fact  that after many years of fighting among themselves, faculty and staff leaders,  college presidents, and other higher ed constituents did not engage in their  usual “circular firing squad,” said Max Page, a professor of architecture and  history at UMass. Page, a vice president of the Public Higher Education Network  of Massachusetts (PHENOM), an advocacy group, said the group’s campaign to get  institutional leaders, faculty and student groups, and others to “say the same  darn thing at the same time” helped push higher education onto a list of  priorities for new funding from which it was largely absent early in the  legislative cycle.

That collaboration, if it can be replicated in future years, could, along  with the enhanced sense of higher education’s importance that Caret described,  could mean that this year’s budgetary outcome in Massachusetts might be the  start of something different, Page said.

But given the history in Massachusetts and elsewhere, he added, “my  inclination is to feel that the next time there’s an economic downturn, they  will just turn the spigot off to higher education, because they feel like they  can always raise tuition.”

Read more: Inside Higher Ed

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