As analysts project tighter state budgets over the next decade, higher education funding in all 50 states will face significant cuts, intensifying a financial burden on both colleges and students, according to a recent study conducted by the National Center for Higher Education.
According to Dennis Jones, president of the National Center for Higher Education, state higher education funding is expected to drastically decrease, depriving state colleges of tax dollars. This, in effect, will boost state college and tuition rates and make financial aid scarcer.
Jones analyzed trends in state revenues and expenditures and found that by 2013, pressures to fund numerous tax-supported programs will leave cash-strapped states fighting to balance their budgets. He added that in past cases of financial strain, higher education funding generally falls victim to state tax cuts.
“Historically, higher education is the only part of the state budget for which there is an alternative payer — the student,” Jones said. “Other programs like K-12 education and Medicaid don’t have an alternative source of revenue.”
According to Jones, the federal government has been reluctant to pick up the slack, as funding for higher education has not increased in the past five years, leaving the burden on state budgets.
The deficit between anticipated state revenues and expenditures is projected to fall to 5.7 percent lower than the required economic production to maintain current state-funded programs, Jones added. The deficit stems from a prosperous period in the late 1990s, when state legislatures significantly cut taxes, not anticipating future budget crises, he added.
“Most state legislatures are not interested in raising taxes,” Jones said. “They’re reluctant to do this under the impression that they won’t get reelected if they do.”
Gov. Mitt Romney’s proposed 2007 budget calls for $995.2 million for higher education — a 3 percent increase from 2006, according to the Massachusetts Budget and Policy Center, which conducts independent research and analysis of the Massachusetts state budget. However, the proposed funding falls below the $1.051 billion recommended for Massachusetts by the Board of Higher Education.
Even though Romney’s 2007 proposal for Massachusetts higher education funding is an increase from last year, it is $263.1 million, or 20 percent, lower than the 2001 higher education funding, according to the MBPC website.
The 2007 budget calls for $84.7 million allotted in financial aid funding, short of the BHE’s recommendation of $104.7 million and also $30 million below the amount appropriated for the 2001 year.
Michael Berger, executive director of the MBPC, said that although higher education funding is often cut, it is not the only program that is explicitly targeted.
“When state budgets are strained, everything gets cut,” Berger said. “In the ’90s, we’ve been aggressive to close any deficits, so there are generally cuts across the board.”
The decision to increase or decrease funding for state programs generally depends on the legislators’ constituents, Jones said. In the interest of keeping their constituents satisfied, legislators place heightened importance on programs — specifically Medicaid — that appeal to older people, which are legislators’ largest voting base.
“Medicaid is getting to be a larger and larger part of the state budget,” Jones said, adding that legislators are reluctant to make significant cuts to the program because it receives federal matching funds.
Jones said state and federal budgets for higher education will continue to suffer until the United States falls behind in the global economy.
“We’ve been drifting along saying we’re number one, but there’s now enough competition globally that it’s starting to get the attention of policy makers,” Jones said. “If they don’t invest more in higher education, they’re going to turn the country into a second-rate competitor.”
