Long-term trends and short-term budget issues put the crunch on state funding for higher ed.

Deltek Analyst Derek Johnson reports.

A recent Washington Post article by Daniel de Vise explores the “historic collapse in state funding for higher education” that has occurred over the last two decades. While a large part of the piece focuses on the plight of UC Berkeley – whose state-funded share of its operating budget has gone from nearly half (47 percent) in 1991 to one-tenth (11 percent) this year – the California-based school is just one of the victims in a nationwide, 20-year trend that has increasingly left public universities out in the cold during state budget negotiations.
As GovWin’s state budget project extensively covered (available to subscribers), governments are using every tool at their disposal to make up for daunting revenue shortfalls. In addition, 2011 marks the end of federal ARRA funds, which many states have used to shield themselves from even deeper cuts. As my Industry Analysis colleague and Sr. Analyst Chris Cotner put it in his analyst perspective on higher education budget woes: “After the 2011 budget cycle, federal stimulus funding ended in a ’funding cliff’ that left most states in need of making difficult choices in the face of continued slow economic growth and related budget woes. In fact, in 2011, 18 states reported needing to make mid-year, unanticipated education cuts in order to remain solvent.”
There is no shortage of examples of states putting this philosophy into practice. Pennsylvania, California, Texas and Arizona have all undergone nasty budget battles in the last few years, which have resulted in steep cuts to K-12 education and public universities. Indeed, as the Post article alludes to, targeting education funding has been a nationwide trend among state governments looking to tighten their belts. According to the Center on Budget and Policy Priorities, “At least 25 states are making major, identifiable cuts in higher education.”
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