As States Cut Funding, Public Universities Rethink Budgets

By Rose Cahalan in Promote & Protect on April 14, 2016 at 2:52 pm | No Comments

Only 12 percent of UT-Austin’s funding comes from the state, down from 47 percent in 1984, part of a nationwide trend. According to the American Academy of Arts and Sciences, state funding of public research universities dropped by an average of 34 percent across the U.S. in the last decade.

As a result, university administrators and leaders are scrambling to figure out how to bridge the gap. On Monday, UT president Greg Fenves; former U.S. Sen. and current Texas Exes chairperson Kay Bailey Hutchison, LLB ’67, BA ’92, Life Member, Distinguished Alumna; and former UC-Berkeley chancellor Robert Birgeneau spoke with members of the media before heading into a meeting on that topic. All three emphasized the importance of finding new sources of funding for a future in which state investment in higher education isn’t guaranteed.

“We need to form more coalitions with partners, both within the states and among the states,” Hutchison said.

The meeting was timed to coincide with the release of the final report by the Lincoln Project, an American Academy of Arts & Sciences undertaking designed to evaluate the role of public research universities and offer suggestions for how to sustain them. Among its recommendations: Universities should explore new philanthropic and corporate partnerships, establish and publicize annual cost and efficiency targets, form regional alliances with other universities, and pursue new revenue streams.

Birgeneau, the project’s co-chair, contrasted the rise in states’ spending on the correctional system with the decrease in spending on higher education. “If you look at what’s happened with state budgets, we’re up to 11 states that spend more money putting people in prison than through college,” he said.

Birgeneau offered up his time as UC-Berkeley chancellor as a cautionary tale for Texas. “During my time in office, the state, in effect, took away the salaries of 4,000 employees,” he said. Berkeley remains the nation’s top-ranked public university, but its financial future is in doubt. Birgeneau referenced the “balance wheel” hypothesis, which holds that when times are good, states fund higher education at a higher rate than other budget categories, while cutting it more severely when times are bad (partially because lawmakers know universities can make up the difference by raising tuition).

UT-Austin will raise its tuition by 6.2 percent by 2017—with the first half of that increase, or $152 per semester for in-state undergraduates, beginning in the fall.

Fenves, who was not involved in the Lincoln Project but endorsed it heartily, said higher education leaders must be proactive in developing new funding sources.

“We need to develop a plan,” he said, “and not just let this keep drifting.”

Photo by Jim Nix.

Tags: budgets, funding