State Budget Actions and Conditions for Higher Education Julie Davis Bell NCSL Education Program April 9, 2010
AK State Revenue Outlook for the Remainder of FY 2010 HI WA OR NV CA ID UT MT WY CO ND SD NE KS MN WI IA MO IL MI IN KY OH NH VT NY PA WV VA NC ME MA, RI CT NJ DE MD AZ NM OK AR MS TN AL GA SC Pessimistic n = 13 Concerned n = 30 Stable n = 6 Optimistic n = 1 No response n = 1 TX LA FL Puerto Rico Source: NCSL survey of state legislative fiscal offices, 2009.
Actions to Balance the Budget: Higher Education Revenue o Income/Sales/Other taxes o Lotteries and other dedicated sources o Tuition increases o Shifting dollars from K-12, corrections, and other places
Spending Actions to Balance the Budget: Higher Across the Board Budget Cuts o Alabama: -20.1% o Massachusetts: -19.9% o South Dakota -16.8% o New Mexico -15.6% o South Carolina -15.2% o Florida -10.9% o Arizona -9.7% o Virginia -9.7% o Utah -8.2% o West Virginia -7.9% Education Note: Biggest reductions in state spending on higher education by percentage from 2008 to 2010. Source: Grapevine Annual Survey.
Actions to Balance the Budget: Higher Education Some Budget Cuts Backfilled with ARRA funding o Colorado 18.1% o Massachusetts 11.9% o Arizona 10.6% o Montana 8.9% o California 7.8% Note: States that have relied most heavily on federal stimulus dollars for higher education, by percentage of spending on higher education paid for with stimulus funds during 2009 and 2010 combined. Source: SHEEO, 2009.
Actions to Balance the Budget: Higher Other Cutbacks: Education Faculty/Employee y salary cuts/freezes/furloughs/layoffs / / Eliminating/Freezing/Decreasing scholarships and grants Enrollment reductions Other o Consolidating/eliminating programs o Closing institutions/campuses o Tuition deregulation
State Higher Education Budget and Funding Needs Reform o This is part of the equation. This conversation needs to be held. o The larger part of the equation is finding better productivity and efficiency in the system. There are many promising strategies to reduce costs and improve results. "Colleges could reduce their academic costs by as much as 50 percent if they improved student retention rates and Colleges could reduce their academic costs by as much as 50 percent 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." Joni Finney, National Center for Public Policy and Higher Education.
Funding Reform to Improve Productivity Performance Funding (Institutional i Incentives) Currently about 15 states have some form Promising and interesting policy: Florida, Ohio, Indiana, Texas, Missouri Fiscal Incentives for Students Tuition guarantees Student loan forgiveness Conditions for student grants
Other Productivity Measures Improving high h school rigor and college readiness Easing and facilitating articulation and transfer Incorporating technology into instruction Institutional i efficiencies i i (streamlining i administrative i i functions; joint purchasing agreements; using facilities on evenings and weekends; increasing faculty workloads; year-round operations Carefully reviewing programs to eliminate duplicative programs and close low demand high cost programs that can't be justified by economic or labor market needs. Demanding institutions and systems to begin or continue reporting performance data Promoting collaboration among universities Creating and supporting new providers
In Conclusion Strategic and effective reform requires: Fundamental reform in state funding AND policy Statewide discussion about the state commitment to public higher education Clear articulation of statewide goals and expectations Review of how each part of the overall post-secondary system contributes to overall state goals Changes in institutional (and student) behavior
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