Report: State Funding for Higher Ed Remains Low While Institutions Cut Resources

Quick Takeaways:

  • Funding for public institutions is about $8.7 billion below what it was just prior to 2008 among states that have enacted full higher education budgets for the current academic year.
  • On average, states are spending $1,525 per student, which is 17 percent less than before the recession.
  • State funding cuts have also impacted public institutions, including making up the financial differences with increases to tuition, cuts to educational and/or other services like faculty positions, course offerings, and student services.

By Brittany Hackett, Communications Staff

While some state governments have begun restoring financial support for public higher education institutions following deep cuts made during the Great Recession, funding levels remain “far below” previous levels while tuition continues to increase, according to a new report from the Center on Budget and Policy Priorities (CBPP).

The report examines the “dramatic reduction” in state support for public higher education and “the problem this causes for many young people as a college education becomes harder to achieve,” Michael Mitchell, a senior policy analyst with the CBPP and co-author of the report, said during a conference call to launch the report.

Cuts in state funding for two- and four-year public institutions “have been both severe and widespread,” Mitchell said, adding that the cuts outlined in the report “came in part because of state revenue collapsing during the Great Recession” that started in 2008. In addition, “too many states relied too heavily on state spending cuts to make up for the lost revenue,” he said.

According to the report, funding for public institutions (both two- and four-year) is about $8.7 billion below what it was just prior to 2008 among states that have enacted full higher education budgets for the current academic year. On average, states are spending $1,525 per student, which is 17 percent less than before the recession.

Among the states that have enacted a higher education budget for the 2015-16 academic year, 45 are spending less per student than they did before 2008. Four states – Montana, North Dakota, Wisconsin, and Wyoming – are not spending less per student currently and Illinois has not yet enacted a complete higher education budget for fiscal year 2016. In eight states – Alabama, Arizona, Idaho, Kentucky, Louisiana, New Hampshire, Pennsylvania, and South Carolina – per student funding has decreased by more than 30 percent since 2008.

Over the last year, per-student funding has dropped in 11 states, including in Arkansas, Kentucky, and Vermont, where per-student funding has been cut for the last two consecutive years. However, 38 states in the last year have increased funding by $275, or 4 percent, nationally.

The report also examined how state funding cuts have impacted public institutions, including making up the financial differences with increases to tuition, cuts to educational and/or other services like faculty positions, course offerings, and student services. For example, annual published tuition at four-year public institutions has risen by $2,333 since 2007-08, up 33 percent. Six states – Alabama, California, Florida, Georgia, Hawaii, and Louisiana – saw their published tuition for four-year public schools increase by more than 60 percent, while Arizona’s tuition rose nearly 90 percent.

Despite the increases in state revenues and the reinvestment in higher education in many states, improvements in public investment for higher education “can only occur … if policymakers make sound tax and budget decisions,” according to the report. However, lawmakers in many states are “jeopardizing” those improvements “by entertaining tax cuts that in many cases would give the biggest breaks to the wealthiest taxpayers,” it states.

“At the very least, states must avoid shortsighted tax cuts that would make it much harder for them to invest in higher education, strengthen the skills of their workforce, and compete for – or even create – the jobs of the future,” according to the report.

 

Publication Date: 5/19/2016


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