- According to data set to be released Monday on the bigger picture around state funding in higher education, nationwide, appropriations increased by 1.6% this fiscal year — a number which falls short of the 2.1% inflation rate, and represents the lowest annual growth rate in five years.
- Most of the meager uptick was thanks to increases in California, Florida and Georgia, which buoyed the rest of the country with 24%, 23% and 10% of the national gains, respectively.
- More states (19) decreased higher ed appropriations than increased (18), and several remained flat.
Many higher ed advocates are worried about the impact that the federal tax bill will have on state appropriations in 2018 and beyond, fearing tax cuts at the federal level will trickle down and increase mandatory spending obligations at the state level. Additionally, changes to the state and local tax deductions will put an additional revenue squeeze on local jurisdictions where legislators don't want to be seen as raising taxes after cuts to the federal tax rate. In Missouri, for example, American Association of State Colleges and Universities director of state relations and policy analysis Tom Harnisch told an audience of higher ed government relations officials that "71% of revenue ... is generated through the income tax, but with changes to federal tax deduction, there could be as high as $700M loss in there, or other projections as high at $1 billion.” As he pointed out, “Now they could always change at the state level ... but you’ll have some governors who will say ‘hey, my citizens just got a huge tax cut, and I’m not going to raise taxes. We’re just going to have to make cuts.’”
Increasingly, collaboration — between departments as well as institutions — to identify efficiencies and cut costs will be imperative. Muriel Howard, former president of AASCU and several institutions, said during a November 2016 roundtable meeting of presidents and chancellors from around the country that because public higher education institutions have largely found a way to keep the doors open in spite of dramatic cuts, she fears the industry has perhaps done too good of a job showing it can survive without public support. However, trend lines — and public perception — don't suggest funding will improve. There is a great disillusionment with higher education as an enterprise, and many public officials are struggling to understand why tax payers should continue to pay for what is considered a private good. This is, of course, and issue which leaders need to address, but perhaps the best way to view higher ed funding from states and the federal government at this point is the way many grant reviewers approach those applications: funding is to supplement and help advance efforts already being supported in other ways on campus, but the onus is on the individual campus leaders to find ways to promote sustainability.