Across the country, legislators are collaborating, compromising and negotiating on the details of their state budgets. The annual process can have significant repercussions for higher education: Public institutions, of course, get their yearly funding from their state. But private institutions also stand to benefit from state financial aid grants.
It’s still too early in the process to tell where all the chips will fall this year, but here are a few initial trends.
Many states are experiencing large and sometimes even historic budget surpluses, said Tom Harnisch, vice president of government relations at the State Higher Education Executive Officers Association. But lawmakers in those places are often putting tax cuts ahead of investments in other areas. “It’s been disappointing that many states are prioritizing tax cuts while underinvesting in higher education in this legislative session,” Harnisch said. “I fear that in a few years states are going to feel the pinch of these tax cuts. Budget deficits are going to develop, and higher education ultimately is going to pay the price.”
Some legislatures are considering implementing tuition increases at their public universities to help cover funding. In Wisconsin, for example, the governor’s proposal would leave public colleges with a $130 million shortfall. The state legislature froze tuition from 2013 to 2021 and the University of Wisconsin’s board of regents has elected to continue the freeze since. Now, Republican lawmakers have proposed tying tuition to increases in inflation.
Even where states are increasing appropriations for higher education, some have said inflation will weaken the value of those new funds. “This is a high-inflation environment, so a 1% or 2% increase for higher education is going to be a cut,” Harnisch said. Colleges are also finding themselves squeezed by rising prices, as inflation drives up building and maintenance costs and faculty members demand higher pay. Plus, some states have to contend with deficits caused by years of disinvestment that a single year of increases won’t solve.