States are ramping up spending on public universities

As Congress debates a possible $3.5 trillion spending package, state budgets are already racking up more funding for higher education. Both Michigan and Alabama began a new fiscal year on Oct. 1, ushering in a new year of taxpayer-funded expenditures on higher education, albeit with very different spending strategies. Meanwhile, lawmakers in California have recently passed a massive higher education budget increase, and Pennsylvania is considering two potential changes to how it funds state colleges and universities. All of this happens against the backdrop of unprecedented federal spending on higher education through the three COVID-19 relief packages.

California

California Gov. Gavin Newsom stopped by California State University – Northridge on Oct. 6 to tout the $47.1 billion higher education spending package he previously signed into law. The legislation increases the baseline budgets for the University of California system, the California State University system, and the California Community College system, according to his announcement. 

Newsom also recently signed off on provisions related to subsidized housing and food for college students. His California Comeback Plan, pitched as a coronavirus relief package, will spend $2 billion over the next three years to build more housing for college students and to put rent controls in place for low-income students. Assembly Bill 543 requires incoming student orientations at all public colleges to include information about SNAP benefits and how students may qualify. Meanwhile, the University of California system will raise its tuition and fees by 4.2 percent next school year.

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The Governor also announced assembly Bill 245, which requires all public colleges within the state to update a student’s records, including their diploma, to match the student’s preferred name and gender. The student must provide the college with government-issued documentation of their name and/or gender change, and the college may not charge a higher fee to reissue the diploma for this reason than they would charge to reissue it for any other reason.

Michigan

Michigan’s 2021-2022 budget allocates $2.2 billion to higher education, including a 5 percent year-over-year boost to each public university’s funding. Lawmakers are appropriating for each college roughly a 1 percent budget increase to help cover the costs of operating each school. These operational support payments total $69.7 million. Four-year colleges, but not community colleges, can also receive a 4 percent boost in the form of “1-time supplemental funding.” To be eligible for the supplemental dollars, a university must certify that it did not increase tuition for in-state undergraduates last year after September 1, 2020, and that it will not increase in-state undergraduate tuition and fees this school year by more than 4.2 percent or $590, whichever is greater.  The state’s Senate Fiscal Agency estimated in early August that the new budget would create a 6.7 percent increase in higher education funding overall.

Alabama

Like Michigan, Alabama’s fiscal year restarts on October 1 of each year. This fiscal year, higher education will receive $2 billion in taxpayer funding. Of that, $1.3 billion will go to 4-year colleges and universities, amounting to a 7 percent year-over-year increase. The state’s community college system will receive $470 million, and $46 million is set aside for the state’s Commission on Higher Education. Lawmakers allocated funding to smaller programs as well, including scholarships for nursing instructors and agricultural research at Tuskegee University.  

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Unlike in California, the state budget increase does not come alongside a tuition hike. The University of Alabama system set its rates for the current school year months after the budget was passed, and it kept rates constant for full-time, on-campus students.

Pennsylvania

When Pennsylvania Gov. Tom Wolf signed the state’s education budget on June 30, he touted it as the “largest education funding increase in state history.” Those increases, however, were not even across the board. The state’s public universities will not be getting a budget increase, setting Pennsylvania apart from other big-spender states: Funding for the state’s system of higher education remained flat, and funding for community colleges and grants increased around 1.5 percent, leading to an overall higher education budget increase of one third of one percent.

On Oct. 4, the state legislature held a hearing to discuss potential changes to the way Pennsylvania’s public universities receive taxpayer funding. State Rep. Eric Nelson spoke in support of his plan to create a voucher program that would allow taxpayer dollars to follow the student to whichever college they attend, rather than allocating those dollars directly to specific institutions. Lawmakers and higher education leaders also discussed tying at least some of the state’s higher education funding to public universities based on specific performance metrics.

These spending increases come alongside a massive infusion of federal funding in the form of COVID relief dollars. The CARES Act, the Coronavirus Response and Relief Supplemental Appropriations Act, and the American Rescue Plan have allocated $5.8 billion 5,796,079,360 to California’s colleges and universities, $1.2 billion to Michigan’s, $1 billion to Alabama’s, and $1.5 billion to Pennsylvania’s. 

Whether a state’s higher education funding increase is large or small, the fact remains that state governments are continuing to ramp up the amount of taxpayer money they funnel into higher education, despite the recent spike in federal funding.