With state revenues experiencing large increases, expect public colleges to make a big push for more ... [+]
With state coffers enjoying record surpluses and tax receipts exceeding budget estimates, 2022 is shaping up to be a year where higher education leaders will bid for big increases in state funding for public institutions and state financial aid programs.
That’s a big turnaround from the past two years, where many institutions have faced crimped budgets, campus retrenchments and constrained appropriations.
State-level fiscal news has not been this good for some time. General fund spending is projected to grow by 9.3% by the end of fiscal year 2022. The majority of states are reporting that tax collections are ahead of forecasts. Rainy day funds have reached record levels. And the expert consensus is that the economy will extend its healthy expansion over at least the next two years.
Not only have state revenues recovered from the pandemic more quickly than most experts predicted, that rebound has been coupled with billions of dollars provided through several pulses of Higher Education Emergency Relief Rescue Funds. An expected bust has turned into a realized bonanza, and higher education wants to cash in.
University presidents are licking their chops. Eyeing a $7.7 billion state budget surplus, the University of Minnesota is asking for almost $1 billion in new funding. Its request includes $473 million for infrastructure upgrades across five campuses, $185 million to enhance campus security and sustainability, and $65 million to expand scholarship funding.
In Alabama, the state’s Commission on Higher Education has made a $2 billion request for the state's public colleges and universities in fiscal year 2022-23, representing a 17.5% increase over the current fiscal year's budget.
Higher education officials in several other states also have submitted requests for large appropriation increases for the upcoming fiscal year.
In Georgia, for example, the University System of Georgia Board of Regents has already approved a $2.57 billion request for fiscal 2023, representing a $108.1 million increase over its current budget. The increases include $99.4 million to cover student enrollment growth and about $9 million for employee and retiree health insurance plans.
The Kentucky Council on Postsecondary Education has submitted its 2022-2024 biennial budget request for that state’s public colleges and universities. It proposes a 10% increase in operating funds tied to performance funding and pension relief for six institutions. It also asks for a $700 million capital outlay for maintenance and repair to state-owned campus buildings.
In addition, the Council is seeking a $23 million special appropriation to help bail out Kentucky State University, Kentucky’s only HBCU, from its budget woes. Add in $60 million for research at the public universities and $6.7 million for a workforce initiative at the Kentucky Community and Technical College System, and the request, if funded, would be a banner year for Kentucky’s public universities.
Mississippi’s public institutions have asked for an increase of $35.7 million for fiscal year 2023, which would provide new funding for a faculty pay raise. The state is also considering a request for $5.3 million more to be appropriated to various student financial aid programs and $75 million in one-time funds to support facility repair and renovation.
Other states where public universities either have made an official pitch for increased appropriations or new increases have already been approved include Iowa, Missouri, Colorado and North Carolina.
Although not every state is looking to boost higher education spending - Florida Governor Ron DeSantis has proposed a $100 million cut in funding for state universities compared to the current level, despite the state sitting on $15 billion in reserves - expect that most public institutions will see 2022 as a golden opportunity to make up for the slack budgets of recent years.
Over the next few months, governors in 33 states will propose their fiscal year 2022-23 budgets. And in many of the 17 states that previously enacted a biennial budget for both fiscal years 2022 and 2023; governors will propose a revised or supplemental budget.
Although it’s still too early to judge how higher education will ultimately fare in the upcoming budget cycle, early comments by policy makers in several states suggest they’re receptive to requests for increases. According to Thomas L. Harnisch, Vice President for Government Relations with the State Higher Education Executive Officers Association, even with fiscal uncertainties from the pandemic and competition for resources for priorities like state employee pay raises, states are recognizing they have “an important opportunity to make strategic investments in higher education to grow and diversify state economies.”
Look for some interesting negotiations in the next few months, with some governors recommending sizable boosts in higher ed support and others offering to provide more funding in exchange for college tuition freezes or caps.
