US colleges expecting hikes in state funding

State support for higher education in the US appears headed for a 10th straight year of increases, in some cases by large margins, defying widespread fears of Covid-driven economic crises and enrolment declines.

While states generally outline their annual budgets in January, scattered early reports are pointing towards their spending on public colleges and universities exceeding even the high average increase − 2.6 per cent per year higher than inflation − that they have posted since 2013.

They include Alabama, where the state’s higher education commission is asking lawmakers for a single-year jump of 17 per cent. Indeed, several are anticipating increases of more than 10 per cent, said Thomas Harnisch, the vice-president for government relations at the State Higher Education Executive Officers Association.

It’s still too early to know the full nationwide picture, said Dr Harnisch, whose organisation represents the statewide governing boards of post-secondary education. “But the requests that they have made,” he said, referring to both individual institutions and statewide systems, “certainly are larger than they have [made] in the past, and that’s a reflection of the budget surpluses that many states are experiencing.”

The state budget situation is part of a complicated environment for US higher education, just a year after Congress handed institutions some $70 billion (£50 billion) from a total taxpayer bailout of $4.5 trillion to help the nation cope with pandemic-related losses.

With that federal infusion, the US economy is rebounding from Covid shutdowns, albeit more weakly and unevenly than widely predicted − and with rising inflation and the Omicron variant now compounding the troubles.

Apparently overriding those concerns for many states, however, is the overall strength of the bailout-bolstered US economy, Dr Harnisch said. A 2018 Supreme Court ruling letting states collect taxes on online purchases may also be having a significant effect, he said.

Such optimism comes soon after many higher education advocates bemoaned the failure of Congress to approve a Biden administration plan to boost public college funding by offering $45 billion in federal support over five years in return for smaller but corresponding increases in state contributions.

States may now be increasing post-secondary spending without that federal prodding, Dr Harnisch said, but that does not remove the need for a stronger state-federal partnership. The current structure – in which states primarily fund institutions and the federal government primarily aids students – still leaves huge affordability gaps, he said.

The current positive signs from the states also do not mean that the sector’s original Covid aid pleas to Congress were overblown, according to the American Council on Education, the chief US higher education lobby group. While it did ask Congress for $120 billion, and is now seeing institutions recover with a federal bailout closer to half that amount, the danger has not yet passed, said Terry Hartle, the council’s senior vice-president for government relations and public affairs.

“For many schools, students and campus employees, the federal funds helped avert what could have been a financial catastrophe,” Dr Hartle said.

And now, with institutions again shutting campuses due to Omicron, further financial losses look possible. “We are not out of the woods yet,” he added.

paul.basken@timeshighereducation.com