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Will States Help Keep College Affordable?

In Florida, where in-state tuition at public, four-year colleges has jumped by more than 60 percent over the last four years, a key legislative committee last week passed a no-new taxes budget that includes another 8 percent increase.

Meanwhile, the University of Missouri is considering raising tuition by 6.5 percent next year, on top of a 5.5 percent increase this year, to partially offset an expected drop in state funding.  As I noted recently, Governor Jay Nixon has proposed closing the state’s large budget shortfall entirely through spending cuts.

These two examples show why states, if they want to help keep higher education affordable, will need to raise additional revenue from other sources like taxes.

Like many other states, Missouri and Florida are struggling to recover from the revenue collapse caused by the Great Recession.  They continue to face significant gaps between the money they are taking in and the money needed to sustain public services.

Unfortunately, key policymakers in these states refuse to consider a balanced approach that includes more revenues as well as spending cuts.  While they could avoid tax increases while also shielding higher education funding from cuts, that would simply mean even deeper cuts to other services, like K-12 education and public safety.

Lagging state funding for higher education has already helped drive up college costs in recent years. Average annual tuition at public, four-year institutions has grown by 28 percent ($1,800) over the last five years, after adjusting for inflation, according to the College Board.  Even after taking financial aid and education tax credits into account, price increases at these institutions have still outstripped inflation.

While state revenues are growing again, it will take years of sustained growth before they can fund services at anywhere near pre-recession levels.  This means that if states refuse to raise taxes, state support for higher education will likely continue to decline, placing mounting pressure on those institutions to shift more and more of the costs to students.