State Support for Colleges Falls 7.6% in 2012 Fiscal Year

January 23, 2012

Higher education's oracles and prognosticators began warning of a "cliff" in state appropriations shortlyafter the $767-billion federal economic-recovery act passed, in 2009.

Now data show just how high that cliff was. Total state support for higher education declined 7.6 percent from the 2011 to the 2012 fiscal years, according to an annual report from the Grapevine Project, at Illinois State University, and the State Higher Education Executive Officers.

As a whole, state spending on higher educa­tion­—after being supported by the recovery-act money for three budget years—is now nearly 4 percent lower than it was in the 2007 fiscal year. Twenty-nine states appropriated less for colleges this year than they did five years ago.

The current year's large decline was due in part to the expiration of about $40-billion in federal money given to the states to prop up spending on education. While a number of states are now seeing improvements in their economic forecasts, their economies had not recovered enough by July to allow officials to replace the lost federal dollars.

Factoring out the federal stimulus money, state support for colleges declined a little more than 4 percent from 2011 to 2012.

The overall decline is also a result of the big drop in higher-education spending in Cali­fornia, accounting for more than a quarter of the total decrease in state support.

California's impact underscores the wide variations in support for higher education across the states. Not including the federal stimulus, state spending for higher education fell more than 13 percent in California, and New Hampshire slashed more than 41 percent from its higher-education budget in 2012—the largest percentage decline in the nation. But Montana raised spending for colleges by more than 17 percent over the previous year's total, not counting federal dollars.

California is also one of just a handful of states that are still trying to close midyear budget gaps, according to a December report from the National Conference of State Legislatures. And despite the still-difficult fiscal situation in the Golden State, state tax revenues nationwide have increased for seven consecutive quarters, according to the Nelson A. Rockefeller Institute of Government, a research arm of the State University of New York at Albany.

But even with an economic recovery under way, the decreased spending on higher education will have long-term effects, says Paul E. Lingenfelter, president of the executive-officers association.

Although most people believe that they need postsecondary education if they hope to move up the economic ladder, policy makers in the states have essentially forced tuition increases on those who are least able to pay for college, Mr. Lingenfelter wrote in a statement accompanying the Grapevine report.

"The contradiction between declining state support on average and these public priorities, coupled with decreased access and increased costs to students, means policy makers face difficult dilemmas regarding how to foster economic recovery" in their states, he wrote.

Chronicle of Higher Education