A slow-growing economy, political polarization, and the drive to significantly increase the number of college graduates are the factors that will keep higher education in the forefront of this year’s state legislative sessions.
While state tax coffers are projected to be in the black in most states, public colleges shouldn’t expect that appropriations will be on the rise anytime soon. Even in places where fiscal conditions are improving most quickly, legislators are looking for ways to squeeze the most efficiency out of the tax dollars they appropriate to higher education and, at the same time, keep college affordable.
That could lead to more lower-cost degrees delivered by public colleges online or efforts to link tuition rates to programs that are thought to be economically important to the state.
Lawmakers in many places are considering plans to reward institutions for the number of students that complete credits and finish their degrees instead of the number of students they enroll.
Those policies have the possibility to redefine the relationship between states and public colleges, said Daniel J. Hurley, director of state relations and policy analysis at the American Association of State Colleges and Universities.
The new approaches may also put public colleges in a no-win situation: forced to improve their performance with little or no hope of actually receiving more money. In Georgia, for example, a proposal to reward colleges for increased completions would apply only to any increase in state appropriations.
“That’s a big assumption because there’s been no growth in five years,” said Carolyn J. Bourdeaux, an associate professor of public management and policy at the Andrew Young School of Policy Studies at Georgia State University.
Out of the Hole
There are positive signs for the next budget cycle, though concerns linger. The total general-fund spending by states for the current fiscal year, which ends on June 30 for most states, is projected to surpass 2008 levels by $13-billion, according to an annual survey by the National Governors Association and the National Association of State Budget Officers.
Mr. Hurley said that for the first time since the start of the recession, cuts in state operating support are not necessarily the foremost concern of higher-education leaders, though they recognize that “it’s going to be a pretty long haul back.”
There is still uncertainty about the future of the economy, however, which is growing at a slower rate than the historical average and even more slowly than in the previous fiscal year, according to the budget survey.
State leaders are also concerned that further spending cuts to deal with the federal debt will push the country into another recession, Daniel L. Crippen, executive director of the bipartisan National Governors Association, said in a news release accompanying the survey. “Governors recognize that there will be reductions in federal funding for state programs, but they should be done equitably and in consultation with governors.”
Lawmakers also will have to struggle with the rising costs of Medicaid and elementary and secondary education—areas that eat up the largest portions of state budgets, though higher education remains in third place in overall state spending.
Although higher education may not have to worry as much about cuts in the coming year, the possibility of simply raising tuition to fill gaps in state appropriations may become much more difficult in some states. Texas lawmakers will consider a “fixed rate” tuition plan for college students, so that each entering class will be assured the same tuition for four years. Gov. Christine Gregoire of Washington, a Democrat, is trying to pressure universities to freeze tuition for two years without any new money from the state.
Focus on Performance
Despite budget cuts in recent years, legislators’ expectations for higher education’s role in the economy continue to rise.
A majority of states are now committed to increasing their percentage of college graduates so their citizens will be better able to compete in the global market, where most jobs being created will require some post-secondary education.
This is one area, at least, in which higher-education leaders agree with legislators as they stress their economic value and argue for greater levels of state support. But if those increases come, they are likely to be based on the number of graduates that colleges produce.
Tennessee is at the forefront of this trend, having tied nearly all of its higher-education appropriations to institutional outcomes, such as credit completions and graduation rates.
More than 30 states are now considering or enacting so-called performance-funding formulas, according to the American Association of State Colleges and Universities.
Among the most recent, a panel of higher-education leaders and policy makers in Ohio is recommending that half of the state’s appropriations to public colleges be based on similar measures.
There are plenty of concerns about the unintended consequences of such measures, such as pressuring instructors and administrators to dilute the rigor of courses or the possibility that there will not be enough money to actually reward the institutions that improve, removing any incentive for more completions.
University leaders in Ohio who helped craft the proposal have generally been supportive, but they also insist that legislators do their part to keep college affordable.
“Students have paid a stiff price because of government funding cuts, so making a degree affordable again should be just as important to legislators as efforts to reward universities for better four-year completion rates,” said Lester A. Lefton, president of Kent State University.
Policy Free-for-All
Partisanship is also expected to shape the policy landscape in the coming sessions, largely because of the high proportion of lawmakers who have been newly elected. More than half of the nearly 7,400 state legislators have been in office for less than two years, and many will have little or no experience in dealing with higher-education policy.
At the same time, the partisan polarization of legislatures is increasing. Just three state legislatures will be split between the parties in 2013, the lowest number since 1928, according to the National Conference of State Legislatures.
The combination of economic uncertainty and partisanship is already spurring a wide range of proposed fiscal policies for higher education, some with no precedent or a very short track record as a basis for measuring effectiveness.
At one end of the policy spectrum, the governors of Florida and Texas, both Republicans, are pushing colleges to create a $10,000 bachelor’s degree. While many have pooh-poohed the idea that a quality degree can be produced at such a low cost, several states are considering ways to provide lower-cost degrees delivered largely online and using the competency-based model of Western Governors University.
Indiana, Texas, and Washington have already adopted Western Governors as a branch of their public-college systems. Indiana, for example, allows residents to use state tuition aid at Western Governors. California, Florida, and Wisconsin are seeking to build similar programs through their existing institutions, according to the state-college association.
The fight over allowing guns on campuses is also expected to be heated, fueled by the recent shootings in Newtown, Conn., where a gunman killed his mother in her home and then 26 students and teachers at a nearby elementary school.
Supporters of so-called concealed-carry bills have not been cowed by the recent tragedy and are expected to make a strong push in Arkansas, Florida, South Carolina, and Texas, said Andy Pelosi, executive director of GunFreeKids.org, which opposes guns on campuses.
Legislation allowing guns on campuses failed in more than a dozen states last year, and was recently vetoed by Gov. Rick Snyder of Michigan, a Republican. In addition, several states may consider tightening restrictions on firearms, including Maryland, New York, and Oregon, Mr. Pelosi said.
“I’ve never seen this kind of outrage after an incident,” he said.
