Fiscal health of states improving, but higher ed still feels crunch
- State budgets have collectively increased for six consecutive years, with most offering modest increases in 2016 to mark the first such activity since the 2008 recession.
- K-12 education and Medicaid are the two biggest expenditures nationwide, a reality that has impacted higher education in mid-year cuts and total budget appropriation formulas.
- A majority of states are proposing reductions in taxes, a pattern that could also disrupt higher education funding priorities.
Higher education is an industry that yields significant economic impact, but not large enough to be spared from cuts in states with dying industries and dwindling populations. Wyoming’s flagship university has declared a financial crisis as a result of tax revenue decreases in its energy sector.
Five years after declaring their own financial crisis, Southern University System officials have annually feared closure or merger as a result of drastic cuts levied against Louisiana’s public institutions. And a battle over finance and governance continues in Kentucky between the state’s governor and its attorney general.
States may be improving in their overall financial outlook, but politics and funding priorities have worsened. The new imperative for public college leaders is to constantly monitor and engage the legislative outlook and to find common areas of how education and economic development can intersect within political contexts.
- National Association of State Budget Officers The fiscal survey of states