States avoid slashing higher ed money

Tuition at the University of Kentucky will increase 9 percent this fall, University of Maine students will pay about 10 percent more and University of Michigan-Ann Arbor tuition will rise 5.6 percent.

 

Yet students at those schools could feel lucky they aren’t paying even more. Despite a tough economic climate, several states are attempting to hold down college tuition — or at least not let increases get out of control — by avoiding deep cuts to higher education, an area that states have been quick to slash in past years when funds were low.

 

In Kentucky, the governor originally proposed a 12 percent cut to higher education, but the Legislature ultimately approved only a 3 percent cut while other state agencies suffered higher cuts. 
 

In Maine, the governor proposed to cut funds slated for higher education by $9.3 million to help cover an unexpected $95 million shortfall; instead, the Legislature essentially kept funding flat. 

And in Michigan, after years of flagging appropriations for colleges — from $363 million in 2002 to $323 million in 2007 — next year’s budget will include a 1 percent increase to universities. Before budget realities kept the increase to only 1 percent, both the governor and Legislature were considering a 3 percent hike in college money.

 

“It was welcome news, both the governor and Senate and House recommendations,” said Cynthia Wilbanks, the University of Michigan’s vice president for government relations. “I don’t for a minute think that anybody enjoyed the last several years of declining state support.”

 

In the meantime, costs are rising for colleges, which are dealing with a variety of issues, including higher energy fees and rising health insurance costs. Schools also struggle to stay competitive with peers in offering generous financial aid packages and luring top-notch faculty.

 

So far this year, several states have ensured that higher education got a decent-sized slice of the budget pie. In oil and coal-producing states like Montana, North and South Dakota and Wyoming, support for higher education is expected to be strong, said Dan Hurley, the director of state relations at the Association of State Colleges and Universities

 

But universities have also gotten more money than expected in some states with budget shortfalls, like Kentucky, Maine and South Carolina, where funding was cut only 3 percent. The relatively modest funding cuts were a marked change from previous sparse years, when higher education was one of the first areas to get the ax, because of its built-in funding source: tuition.

 

“Even in states that are in current economic dire circumstances, higher education, when it is being pared back, it’s been done at a less dramatic degree than what was originally planned,” Hurley said.

 

In-state students at Maryland’s public universities again will see their tuition frozen, as Gov. Martin O’Malley (D) increased funding to the university system by 9.4 percent for the 2009 fiscal year that began July 1 after the Board of Regents proposed a 4 percent tuition increase. It’s the third straight year that the system’s tuition has not increased.

 

Ohio universities are also freezing tuition this year thanks to a two-year deal Ohio Gov. Ted Strickland (D) and the Legislature forged with colleges in the 2007 legislative session to hold tuition at its current rate in exchange for an extra $254 million over two years. Before the freeze, tuition at Ohio universities had increased about 9 percent every year since 1996.

 

However, schools in both states are still raising other fees. At Ohio State University, for example, room-and-board prices are going up 5.8 percent.

The effort to hold down tuition stems from states tying their economic futures to an educated workforce. The biggest economic payoff for states will come from “sending their kids to college,” Diane Swonk, chief economist with Mesirow Financial, told governors at the National Governors Association meeting earlier this month in Philadelphia.

 

She said the country is seeing the biggest economic gap between the wealthy and poor since 1918, and it’s being caused now, in part, by a growing global market taking jobs elsewhere. To be competitive, workers will need at least a college degree, Swonk said, and since the federal government is not meeting this challenge, finding ways to educate people is falling to states and local jurisdictions.

 

In Kentucky, where about 17 percent of residents hold college degrees, the state’s goal is to increase that number to a quarter of its population by 2020 to match the national average, said Jay Blanton, a University of Kentucky spokesman. This year, “it was clear that we were a priority for policymakers,” he said.

 

Another way states are trying to help students is on the financing end. Colorado Gov. Bill Ritter (D) is backing a ballot measure that would end a tax credit for the oil and gas industry to raise money for a scholarship fund. Alabama recently enacted a law to give parents a tax break of up to $5,000 a year for money they deposit in the state’s two college savings plans.

 

But Alabama universities are also instituting the highest tuition increases in a decade because the Legislature cut funding to four-year schools by 11.2 percent this year, while only cutting 3 percent from K-12 schools and 8 percent from community colleges.

 

“Higher education took the brunt of the cuts in the state of Alabama,” said Kellee Reinhart, a spokeswoman for University of Alabama system, which comprises three schools. “Our simple request was that we be treated fairly and equitably with K-12 and the two-year schools. That did not occur and our disappointment is keen.”

 

The University of Alabama system will be forced to raise tuition an average of more than 12 percent because of the state cuts, Reinhart said.

 

College and university officials in Florida, Mississippi and Tennessee have also complained that cuts by their legislatures have forced them to pass the burden onto students.At some of Florida’s flagship universities — including the University of Florida and Florida State University — tuition rates for transfers and freshmen will rise 15 percent from last year.

 

This fall, Louisiana will see its first tuition increase since 2004 with a new law that allows public colleges to increase tuition from 3 to 5 percent over the next four years. The move hasn’t raised much of an outcry yet from parents and students as Louisiana’s schools are already among the most inexpensive in the country.

 

One reason for the low tuition is that Louisiana is the only state that requires a two-thirds vote in the Legislature to increase tuition, although the new law gives that power to the universities through 2012. University officials say the increases are necessary to keep up with their peers.

 

Several universities are aiming to match their tuition increases with a similar boost in financial aid. At the University of Michigan, tuition will rise 5.6 percent, but financial aid is expected to increase almost 11 percent.

 

Universities are taking other drastic actions to cut spending. The University of Kentucky, for example, is freezing pay and eliminating 188 jobs, mostly by letting vacant positions go unfilled. The University of Alabama schools have cut positions and frozen salaries, and also taken planned renovations and construction projects off the drawing board. 

See Related Stories:
Govs propose investing in higher ed (2/20/2008)
U.S. bill specifices state higher ed spending (2/11/2008)
Tuition hikes smaller than in past years (8/21/2006)
Since 2000, state college tuition up 40% (10/18/2005)

Contact Pauline Vu at pvu@stateline.org.