Since the start of the recession, most public colleges have been forced to make tough choices, freezing hiring, increasing tuition, and cutting academic programs. But a handful of states have been spared the brunt of the recession so far, providing an opportunity for them to improve their national standing in terms of higher education.
Leading those states by far is North Dakota, whose higher-education system has seen an 18.5-percent increase in state funds over the past two years. The state—which has maintained a budget surplus thanks to abundant natural resources and a strong, energy-driven economy—has doled out money for a number of new campus projects and programs, including in high-priority areas like energy education. What’s more, faculty members have received salary increases, and community-college tuition has been kept level.
North Dakota and Montana are the only two states that have not had a budget gap in the current fiscal year. A few other states have had budget deficits that amounted to less than 10 percent of their general-fund budgets. The states with the smallest budget gaps in 2010 are Wyoming, South Dakota, and Arkansas.
Despite the downturn, 11 states were able to increase their general-fund spending from 2008 to 2010, with North Dakota’s increasing by the greatest percentage.
North Dakota officials hope that the money they are putting into higher education will lay a foundation for continued economic growth. “These are very good long-term investments in higher education in a state that I think truly understands the value of higher education for the economic health of the state,” said Robert O. Kelley, president of the University of North Dakota.
Improving higher education is key to keeping talented high-school students—whose skills would benefit the state economy—in the state for college and their subsequent careers, said Daniel J. Hurley, director of state relations and policy analysis at the American Association of State Colleges and Universities. That is particularly important to a sparsely populated state like North Dakota, where the number of high-school graduates is expected to drop by 18 percent this decade, according to the Western Interstate Commission for Higher Education. Only two states, Louisiana and Vermont, are projecting bigger drops between now and 2020.
North Dakota falls just below the national average in the proportion of residents age 25 and older with bachelor’s degrees.
The effects of the recession nationally could improve North Dakota’s relative standing in higher education, Mr. Hurley said. From a higher-education and economic viewpoint, he said, “this recession very well may make North Dakota a magnet state.”
Progress on Many Fronts
William G. Goetz, chancellor of the North Dakota University system, said improving college affordability is the system’s top goal as it decides how to spend its increasing funds. North Dakota’s two-year-college tuition is among the nation’s costliest, and the state ranks about average for four-year public-college tuition, according to the College Board.
In the current budget cycle, community colleges have put in place tuition freezes, and four-year colleges have capped annual increases at 3.5 percent. The state has provided more money for need-based financial aid and financed a campaign to market its community colleges to high-school students and their parents.
The budget increases have also made the state’s universities much more competitive in the faculty marketplace, university officials said. Faculty members are set to receive pay raises of about 5 percent for each year of the biennium. A number of campus-specific projects and programs have also been financed by the budget increases, including campus-emergency preparation, capital improvements, and schoolteacher training in the sciences.
Other projects directly reflect the state’s mission to link improvements in higher education to economic growth, particularly in the energy sector. The North Dakota State College of Science has expanded its offerings in applied technology and nanoscience, and the University of North Dakota has improved programs in nursing and the life sciences, developed advanced research on unmanned-aircraft systems, and expanded offerings in engineering and environmental fields.
Larry C. Skogen, president of Bismarck State College, said state grants, combined with federal funds and business partnerships, have helped the two-year college expand programs that train students to work in the state’s booming energy sector.
From 2007 to 2009, the college nearly doubled the number of energy-related credit hours it offered, he said, raising enrollment in its energy-education program to 6,900 from 4,500.
“The university system [members] are all supporting the development of energy resources through providing the kind of education and training that we know the work force is going to need,” Mr. Skogen said, “from engineering at the graduate level to technicians at the two-year schools.”
Staying Steady
Among other states that have been spared the deep budget cuts in higher education seen across the country are two, Arkansas and West Virginia, that also want to improve their public universities’ standing. They rank 49th and 50th, respectively, in the proportion of residents age 25 and older with bachelor’s degrees, according to the Census Bureau.
But it is unclear how much progress those states might be able to make by taking advantage of their relatively stable budget situations. Even though Arkansas and West Virginia have fared well financially compared with other states, they have been unable to increase their higher-education budgets. And West Virginia, whose economy tends to enter and recover from recessions after much of the rest of the country does, expects to make cuts in coming years as money from the federal stimulus package runs out.
State appropriations for West Virginia colleges have held steady during the recession because of the stimulus funds, said Brian E. Noland, chancellor of the West Virginia Higher Education Policy Commission. Because of that, he said, colleges have not had to cut faculty and staff members, and tuition increases were kept to about 5 percent this year.
The state has increased funds for financial aid, allocating $93-million for the 2009-10 academic year, up from $63-million four years ago.
“We have a state policy goal of increasing the number of graduates produced by our institutions,” Mr. Noland said, naming low-income students as a target group. Like North Dakota, West Virginia is projecting a significant drop in the number of high-school graduates, with the number expected to decline by 8 percent between now and 2020, making enrollment growth particularly challenging.
In Arkansas, appropriations for higher education this year dropped only slightly, by 1.8 percent, before stimulus funds were taken into account, said B. Alan Sugg, president of the University of Arkansas system.
State colleges had to scrap salary increases but managed to preserve jobs. Most of the cuts came through the elimination of one-time spending, such as on planned campus renovations and equipment purchases, though Mr. Sugg said the state did use stimulus funds for some one-time purchases.
For next year, institutions are hoping to receive a 3-percent increase in state funds, he said, assuming that projected revenues are realized. If that happens, increasing faculty and staff salaries will be the system’s “No. 1 priority,” he said.
He praised Gov. Mike Beebe’s emphasis on education during the recession and his recognition of the link between improving higher education and the state’s economic growth. “Every speech he makes he talks about economic development and education,” Mr. Sugg said. “They go hand in hand.”
