California’s governor proposes more higher ed funding — with a catch

Dive Brief:

  • California Gov. Gavin Newsom’s proposed budget for next fiscal year defies recent pandemic-induced trends and boosts funding to its public universities.

  • Yet the pitch, unveiled Friday, doesn’t completely recover the hundreds of millions of dollars that both of the state’s four-year systems lost as a result of the health crisis. And Newsom said the new money comes with the expectation they don’t raise tuition in the coming academic year. 

  • States often try to prioritize college affordability during economic recessions, policy experts note. But California’s arrangement would likely be an outlier amid the pandemic. 

Dive Insight:

The financial turbulence of the pandemic hit state budgets hard. This was compounded by the lack of direct funding for local and state governments in the new federal coronavirus rescue package passed in December. 

Many states slashed public colleges’ budgets after the pandemic began and are anticipated to do the same in the coming fiscal year. California was no exception. The state’s four-year systems the University of California and California State University lost about $300 million each during fiscal 2020 budget cuts. 

The proposed fiscal 2021 budget provides a 3% increase in base funding for each of the two systems, or about $136 million more in recurring money for UC and $145 million for Cal State.

It also includes millions of dollars in one-time funding for certain measures, with a significant chunk devoted to deferred maintenance. And the governor set aside $15 million at UC and $30 million at Cal State for emergency financial aid for full-time, low-income students.

Though governing boards for both systems retain control over tuition, the funding would be given “with the expectation” they maintain the current rates, the proposal states.

UC and Cal State leaders released statements praising Newsom’s proposal. A Cal State spokesperson wrote in an email Monday that the budget proposal and the governor’s request to not increase tuition will be discussed at the system’s governing board meeting this month. A UC representative did not respond to a request for comment by publication time.

State policymakers tend to preserve or increase funding for statewide financial aid programs — rather than for public college budgets — during periods of economic contraction, said Denisa Gándara, a professor of education policy and leadership at Southern Methodist University. Direct state funding to institutions plummeted during the Great Recession while money for financial aid increased per student, she noted.

“Policymakers gain more politically from increasing funding for students, as opposed to increasing funding for institutions,” Gándara said. She said constituents typically write to legislators to complain about soaring tuition or financial aid access rather than inadequate institutional funding. 

In some cases, college leaders and elected officials negotiate deals to not raise tuition in exchange for more funding, said Tom Harnisch, vice president for government relations at the State Higher Education Executive Officers Association. But such arrangements may become less frequent because of the condition of state budgets. “Some states may call for freezing tuition or capping tuition increases with little regard for funding levels for higher education in the state budget,” Harnisch added. 

Recent state funding increases have been tied to tuition freezes. Virginia’s public colleges kept tuition flat during the 2019-20 school year the first time in two decades with a $53 million infusion of state dollars.

Some states may mirror California, said Justin Ortagus, a professor and director of the Institute of Higher Education at the University of Florida. But the postsecondary landscape differs dramatically for each, and so state budgets will vary in their approaches to affordability and tuition, he said. Although college enrollment was generally down this fall largely among two-year schools — he pointed out that some states’ numbers may be faltering while others have improved.

This story has been updated with a comment from the California State University System.


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