Filling the budget gap: university administrators face tough choices as states cut deep into higher education budgets - Top 100 Degree Producers, 2000-2001

Black Issues in Higher Education, June 20, 2002 by Page Boinest Melton

Norfolk State University President Marie McDemmond hoped this year to tackle the university's student space shortage. Troubled that financial aid students spill out the doors of the administration building, and that admissions officers interview prospective students in hallways, McDemmond longed to add a new student-services wing.

But the addition wasn't meant to be, a casualty of cost-cutting initiated to cover Virginia's projected $3.8 billion two-year revenue shortfall. Norfolk State not only lost the new wing, it will collect less state aid than expected for operating expenses and compliance with federal Office of Civil Rights-mandated programs. With the state cutting deep into higher education budgets, Norfolk State did what hundreds of other colleges and universities are doing this year: raised tuition to help fill the budget gap.

Although Virginia rolled back tuition for colleges and universities six years ago, increasing tuition by 6 percent for in-state students and 18 percent for out-of-state students was "a difficult decision," McDemmond says. State law requires the university's out-of-state students to cover their costs and the tuition increase is sending some to other schools. Delaying work on the student-services wing "really hurts my heart," she says. "We're deficient in space and it makes us look less efficient."

Nationwide, at institutions of all sizes, McDemmond's colleagues are in the same bind. All but a handful of states face budget cuts this year because of depressed tax revenues. The National Conference of State Legislatures reports that 29 states already have reduced, or are considering reducing, higher education appropriations. If the economy remains sluggish as predicted, colleges and universities will be vulnerable well into next year--an uncertainty that has forced campus leaders to seek the fight mix of their own budget cuts, fee increases and postponed projects to absorb shrinking state appropriations. The goal: Preserve as many campus programs as possible while ensuring that a college degree isn't priced beyond the reach of students.

The balancing act can be painful. "State funding was being reduced and as a consequence, the choice we had was to cut back on programs or the quality of what we do or find other sources of income to sustain our programs," says Purdue University President Martin Jischke. Neighboring Indiana University already had raised tuition as much as 9 percent and doubled student technology fees when Purdue opted for a 10 percent tuition increase, tacked on to a $1,000 fee approved in November for new students. Trimming the university budget also ate into Purdue's share of an economic development fund that helps local companies develop new products--an ironic twist, given Jischke's belief that the fund will grow Indiana's economy and ensure-future revenue for state-aided programs such as higher education.

"In the long run, it's exactly the kind of program that is the solution to our problem," Jischke says of the state's 21st Century Research and Technology Fund. Being forced to choose between a reasonable operating budget and the university's commitment to Indiana's economic development, he says, is a "strategic mistake."

Elsewhere, the stories are similar. Some South Carolina institutions are imposing tuition increases nearing 30 percent. The Mississippi state system increased tuition 8 percent, even though some campus presidents wanted more. Minnesota, which raised tuition 10.9 percent for the current year, added another 10 percent increase for the new school year. Out-of-state students at a California State University campus will pay $1,100 more in tuition a year, the system's first tuition increase in a decade.

Though campuses enjoyed generous state funding in the economic boom years of the 1990s, colleges and universities have increasingly relied on student costs to cover more expenses. The National Center for Education Statistics' study of costs from 1988 to 1998 found that tuition's share of higher education revenue rose as much as 4.9 percent a year, depending on the institution. And that was before the recent economic declines ravaged state budgets. "We went from being state-supported to state-assisted," says McDemmond of Norfolk State. "There are cynics who will say soon that we are only `state-located,' as the state allocation becomes a smaller portion of our budget."

TUITION INCREASES NOT ENOUGH

Given the magnitude of state budget shortfalls and rising enrollments--despite higher costs, more students are still choosing college--tuition increases may not generate enough revenue to close the gap. The University of Washington's 16 percent tuition increase for in-state students is among the larger percentage increases nationally, but it won't balance the annual budget. The university will not fill about 40 teaching vacancies in the college of arts and sciences, much less cover a 2 percent pay increase expected by faculty under a new compensation policy.

Students and university leaders worry about the long-term impact: UW faculty salaries lag behind peer institutions by an average 11 percent, and a local newspaper depicts the university's English department as a farm team raided by schools offering better pay. "We expected the tuition increase," says Alexandra Narvaez, a junior from Seattle. "But students are going to be paying more and getting a less quality education, with larger class sizes and less staff helping out."