Some colleges may escape the haircut they were expecting. Gavin Newsom, the Democratic governor of California, had warned the University of California and California State University systems earlier this year that they might face as much as an 8-percent cut in support. That proposed cut has been reduced to 3 percent, though the budget has not been finalized.
Even when support is expected to remain flat or rise slightly in the coming year, it may amount to a cut. Public colleges in Oregon are receiving slight increases, but advocates say it’s not enough to make up for inflation and the expanding need for student services. Over all, state support for colleges per full-time equivalent student rose less than 1 percent over the rate of inflation for fiscal year 2024, according to SHEEO’s annual State Higher Education Finance report.
At the same time, many states are raising tuition, including Kansas, Iowa, Nebraska, and Minnesota. It’s a brace for the bottom line of their public colleges but a risk in an era when students and their families are especially cost-conscious.
A funding downturn is, perhaps, inevitable. Many states came out of the pandemic flush with tax revenues, but state budgets have weakened, says Dustin D. Weeden, an associate vice president at SHEEO, and with them state support for colleges. Weeden and his colleagues have been discussing whether state support might have arrived at a peak, given modest growth and general economic uncertainty. If the federal government slashes Medicaid, “that’s going to put tremendous pressure on state budgets,” he adds. “We’ll see what happens with tax revenue over the next year, but there could be some bigger changes coming.”
The bigger questions: Do these cuts bode a new era of state parsimony, or are they just another speed hump on a much longer road? Will they cause even more chaos for public colleges at a most chaotic time?