State Cuts Are Pushing Public Colleges Into Peril

Nevada, in particular, faces deep reductions and demanding demographics

Candice Towell for The Chronicle

Daniel Klaich, chancellor of the Nevada System of Higher Education, says the budget crisis may eventually result in his state's closing an entire institution.
March 14, 2010

As the chancellor of Nevada's higher-education system faced yet another round of budget cuts last month, he said he had no reason to make misleading claims that "the sky is falling" on public colleges in his state. The truth, he said, is that it is.

"The reality is so ugly that what seems exaggeration merges with fact," the chancellor, Daniel Klaich, wrote in a public memorandum.

Weeks later state lawmakers approved a 6.9-percent midyear cut for higher education, a reduction that came on top of a 24-percent cut in state funds the system had already been dealt in last year's budget session.

As a result, Nevada universities are preparing to close colleges, departments, and programs; demoralized professors are fleeing the state; and thousands of students are being shut out of classes at community colleges. The prospect of shutting down an entire institution remains a "distinct possibility" for the future, the chancellor says.

That's because the worst may be yet to come, in Nevada and elsewhere.

Shortfalls in California, which faced the largest budget gap in the nation this year, have grabbed much of the attention as tens of thousands of students were turned away from public colleges and tuition rose by more than 30 percent. But other states' public higher-education systems are getting hit just as hard or harder.

Utah saw the biggest percentage drop in state general-fund spending over the past two years, while also facing one of the fastest projected growth rates in high-school graduates. Arizona's budget gap was nearly as large as California's, by percentage of its general-fund budget, and it is facing much faster growth in its traditional college-age population. Florida, too, is seeing rapid population growth and big drops in state spending that have resulted in large cuts in higher education.

In Colorado federal stimulus dollars have made up close to one-fifth of the total state budget for higher education in 2009 and 2010 combined, making the state the most heavily reliant so far on that temporary pot of money for financing higher education. Illinois is facing a cash-flow crisis, with the state last month falling more than three-quarters of a billion dollars behind in budgeted payments to its colleges. Over the past five years, Rhode Island, South Dakota, and New Jersey have seen the fastest drops in state higher-education appropriations per full-time-equivalent student.

No one factor can indicate which states and their college systems are in the most serious trouble. But in no state do prospects look bleaker for public higher education than in Nevada, where fiscal, demographic, and academic challenges all rank among the toughest in the nation.

The state's projected budget gap for next year is the country's largest, measured by proportion of general-fund budget, a shortfall expected to equal nearly 60 percent of Nevada's total budget. Over the next 10 years, the number of high-school graduates in the state is expected to grow by 26 percent, the fastest rise in the United States. And Nevada already struggles with college-pipeline problems, ranking 50th among the states on the likelihood of its ninth graders to earn a high-school diploma, with only about 56 percent doing so.

"We're at a point of particular peril," Mr. Klaich said in an interview.

Threats to Public Aid

So is public higher education in general, many college leaders and policy experts say.

State spending on higher education has already been declining, in terms of the proportion of state budgets spent on public colleges and the proportion of college budgets that come from the state, and generally has not kept pace with enrollment growth and inflation over the past several decades. The recession has only exacerbated the trend. It has been so deep and lasted so long that many fiscal analysts say it could be years, if ever, before state spending on higher education rebounds to anything close to previous levels.

Other budget pressures on states, including growing Medicaid rolls, increasing pension liabilities, and escalating prison costs, are only intensifying. In many places, politicians and their constituents adamantly oppose increasing revenues through new taxes. And even when the economy does begin to bounce back, state revenues typically lag in their recovery by at least two years.

At the same time, federal stimulus dollars for education, which have temporarily helped states stave off deeper cuts in higher education, are running out. Only 14.2 percent of the stimulus money set aside for states' education budgets remains available for the 2011 fiscal year, and 20 states have none at all left to spend, according to the Education Commission of the States.

"The current recession and a convergence of other pressures on states and the American economy have eroded the ability of states to rebuild their financial support for higher education," Paul E. Lingenfelter, executive director of the State Higher Education Executive Officers, wrote in an essay accompanying his group's annual state-finance report this year. "As a result, the resiliency of public financial support for American higher education is threatened, putting quality, capacity, and the underlying ability to meet student and societal needs at risk."

Where will those trends leave public higher education? Some college leaders say institutions' base lines of state support will simply be reset to lower levels, with the new fiscal reality leading institutions to narrow their missions, limit course offerings, and require students to pay increasingly greater shares of the cost of their education. But other college experts worry that, without more-fundamental changes in how institutions operate, the budget trends that have been accelerated by the economic downturn of the past two years will lead public higher education down a path to mediocrity.

"Higher education is changing by virtue of 1,000 painful cuts," said Stephen R. Portch, a former chancellor of the University System of Georgia.

If public colleges cannot revamp their structures—such as by creating ways to measure learning more effectively and allowing capable students to earn degrees more quickly­—state tax systems will continue to limit spending on colleges in ways that will erode quality, Mr. Portch said, leaving faculty members to teach more and more students and take more and more unpaid furlough days, alongside fewer and fewer colleagues.

"Business isn't coming back to normal this time," he says.

A Chronic Crisis

That message is beginning to hit home in Nevada, where the state's major industries—construction, gambling, and tourism—have tumbled. The state has no income tax, and revenues from its sales and property taxes have plummeted.

Michael D. Richards, president of the College of Southern Nevada, said the state's budget crisis was so chronic that he was dedicating a section of the college's strategic plan, now in the process of being updated, to retrenchment. He wants to use it to outline processes and priorities for budget cutting.

"We're trying to take a systematic approach, but it's all in the negative," he said. "You're really not planning forward—you're planning forward for the survival of the institution."

His two-year college, the state's largest, has been unable to grow to meet the region's fast-rising demand, with 5,100 would-be students walking away from the institution last fall after being unable to register for classes they wanted. The college has tried to do what it can to expand access on a limited budget, including offering eight classes this semester at midnight, when classroom space is available.

The state's universities, meanwhile, are weighing how to best scale back their academic offerings. At the University of Nevada at Reno, the state's land-grant institution, the provost has proposed closing the College of Agriculture, Biotechnology, and Natural Resources and eliminating a number of degree programs. The plan would result in a loss of about 75 jobs that are currently filled, which could include dozens held by tenured professors. Final decisions on what to cut will be made in June and will take effect next year.

James T. Richardson, a sociology professor at the university who is also director of its judicial-studies program, praises leaders of the university and the Nevada System of Higher Education for the collaborative process they are using to make tough decisions, involving faculty members and other people with a stake in the outcome. Nevertheless, he said he was "extremely disappointed" in how the budget cuts are taking the university and the state backward.

How can an institution not offer a master's degree with a statistics concentration or undergraduate majors in French, German studies, and Italian—all cuts proposed by the provost—and still call itself a land-grant university? he asked. "It starts to raise the question, What is a university?"

The cuts have deeply harmed morale, many Nevada professors and college officials say, causing top faculty members to leave. John W. Fil-ler Jr., president of the faculty senate and a professor of special education at the University of Nevada at Las Vegas, said 100 faculty positions have become vacant there over the past two years as people have fled.

When assistant professors, in particular, ask him about their future in Nevada, he said, he has started to tell them to "take care of yourself and take care of your family and career," and consider jobs elsewhere. Mr. Filler has been at UNLV for 21 years, and he said that he, too, would be floating his curriculum vitae within a year.

Paths Forward

Despite the gloom, universities in Nevada and elsewhere have been able to make some progress without spending money.

Milton D. Glick, president of the University of Nevada at Reno, said faculty members had agreed to teach more classes and classes with more students, leading to a 19-percent increase this year in the number of credit hours taught by tenured professors even as the university's state budget has been cut by 21 percent in the last 18 months.

Charles B. Reed, chancellor of California State University, which has faced a 20-percent cut in state aid over the past 18 months, is making plans to improve graduation rates, at no cost. His campuses are changing their approach to academic advising so students get a clearer road map toward a degree, and campus officials are tracking down students with 130 credit hours or more, urging them to complete their degrees and move on.

Many experts on higher-education policy say revamping the credit hour, in fact, could be the key to overhauling public colleges to make them more financially viable.

To thrive in the face of continued declines in state support, higher education must get serious about improving academic productivity, providing more learning for every dollar spent, said Joni E. Finney, practice professor of education at the University of Pennsylvania and vice president of the National Center for Public Policy and Higher Education, a California-based nonprofit group.

Colleges could reduce their academic costs by as much as 50 percent, she said, if they improved student-retention rates and cut back on the number of excess credit hours students earn beyond what they need for a degree.

"Students are given a smorgasbord of courses, but what is really important for students to know?" Ms. Finney said. "Let's reduce the level of choice in curriculum—it's where people get lost—and get them through in a reasonable amount of time."

Mr. Portch, the former Georgia chancellor, said degrees should be awarded based on what students know and are able to do. Students who can demonstrate mastery of specific skills and knowledge, through prior learning, tests, or other measures, should be allowed to progress more quickly to a degree. Time spent is the norm and learning is the variable in earning degrees right now in higher education, he said, but learning should be the norm and time the variable.

Any efforts to make fundamental changes in how degrees are awarded would face a number of barriers, including accreditation standards that take into account students' time in the classroom and federal student aid that is awarded based on credit hours. But "something has to give," Mr. Portch said.

Mr. Filler, the UNLV professor, said finding ways to reduce the number of credit hours students take did seem to be an "inevitability of the times we're going through." But improving higher education, in Nevada and nationwide, rests on improving its quality, not simply the speed with which students move through their studies, he argued.

Among other inevitabilities, Mr. Filler said, is more widespread use of differential-tuition policies, which charge more to students who enroll in more-expensive programs, such as nursing and engineering.

But not all college officials and policy experts have accepted the idea that public aid for higher education cannot be increased. Mr. Reed, of Cal State, is pressing federal officials to provide direct aid to colleges that enroll many students eligible for Pell Grants, a gauge of which institutions are doing the most to educate financially needy students. He said such an approach would give the Obama administration a better chance of meeting its ambitious national goals for higher education, including giving the United States the world's highest proportion of college graduates by 2020.

Mr. Lingenfelter, of the state higher-education officers' group, said states could choose to set aside more money for higher education, and even a little bit could go a long way. If the average state budget for higher education were gradually increased by one percentage point, to 7.5 percent of state budgets, the average increase in state dollars for higher education would be 15 percent, he said.

"No country has ever improved the quality and scope of its educational system by persistently reducing its budget," Mr. Lingenfelter wrote in his recent essay on state finance. "While some may wish this were possible, it is not. Nor can colleges and universities improve their scope and quality without focusing on essential priorities and increasing productivity and efficiency, most especially when resources are limited.

"Both renewed, sustainable public support," he wrote, "and a more productive and effective educational system are needed."