More of the pie for higher ed?

• Author: Perez, Arturo
• Position: Higher education - Includes related article on the Taxpayers Relief Act of 1997

Public higher education is reaping the benefits of a strong economy at the same time that legislators seek to keep it affordable and make it more accountable.

We are becoming a more educated society. By 2003, 12 million Americans will be attending college or community college. It's a good investment. The lifetime earnings for these college graduates could very well outpace those with high school degrees by more than $1 million. An educated work force ensures that the United States will remain an economic powerhouse. And states, in these times of budget surpluses, are making bigger investments in higher education than they have in a decade.

Often the first piece of the budget pie to be sliced thin, higher education now accounts for 11.7 cents of every general fund dollar - higher than last year, but still lower than the 14 cents states spent in 1990. Nevertheless, higher education stands to grow by 6.2 percent, compared with an overall general fund growth of 5.3 percent for all state appropriations. It's the largest increase since the late 1980s, and only K-12 education is receiving a larger share.

Nevada had the largest increase in funding for higher education in FY 1998 - 32.7 percent. The increase was for enrollment growth, especially for community colleges, technology improvements and distance learning programs. "As the fastest growing state in the country, a large part of the increase in funding this year was simply to keep pace with enrollment growth, especially among the community colleges," says Mark Stevens, Assembly fiscal analyst.

North Dakota had the second largest increase: 12.9 percent. The rise included a 3 percent increase in salaries and some funds carried over from the previous budget year.

Missouri reported the third largest funding hike at 10.7 percent. Both the governor and the General Assembly made funds for higher education a priority in the FY 1998 budget. Representative Dick Franklin, House Budget Committee chair, said that concern over rising tuition and fees was a factor in the size of this year's state appropriations. He also noted that many of the investments in technology were targeted at community colleges, which are becoming more and more important.

Missouri's funding increases for community colleges are being repeated in other states. "Community colleges continue to do well and are looked on favorably by lawmakers because of their contribution to the economy and the direct way that their technical graduates go right into the work force," says Edward R. Hines, professor at Illinois State University and an expert on higher education funding.

According to Kent Phillip with the American Association of Community Colleges, "As four-year institutions reach capacity, community colleges are expected to pick up more of the load."

As with K-12 education, states put budget surpluses to work for higher education in FY 1998. In Colorado, capital projects were funded with excess revenues. Representative Tony Grampsas, chairman of the Colorado Joint Budget Committee, says this was a priority because of the projected leap in enrollments in the coming years. He says that one of the best investments a state can make is funding the capital needs of both its community colleges and flagship universities.

Excess state revenues paid for an endowment match of $9.1 million to the University of Connecticut. Louisiana paid for college building repairs out of a $157.1 million capital budget fund created from excess revenues. Michigan set aside some funds for special maintenance projects. Nevada's excess revenues were used to pay for $75 million in capital projects.

North Carolina did the same throughout its university system. "This year offered us an opportunity to invest in long-term needs at our universities, and we seized it. Investing in research labs, classrooms and dormitories when times are good is a concrete way to say that education is a top priority," says Senator Mark Basnight, president pro tern of the North Carolina Senate.

KEEPING IT AFFORDABLE

Tied to funding for higher education is affordability. Parents and students are having to contend with this problem more each year as tuition and fee increases continue to exceed the average inflation rate. In 1996, the...