COLUMBIA — Consistent slashing of state funding, a mid-year budget shortfall and an increasingly arduous struggle to recruit and retain top faculty and students.
That's a short list of the problems facing public higher education in Missouri. But if university presidents across the country saw it, they might think it was about their schools instead.
On Jan. 18, MU Interim Chancellor Hank Foley sent a memo to faculty and staff announcing the university would have to make $20 million in cuts before June 30. The memo came a day after Gov. Eric Greitens announced $146 million in total cuts, including $80 million to higher education across the state. Foley acknowledged the difficulty budget cuts pose but also emphasized a broader national trend.
“While finances are a challenge, we are hardly alone,” he said in the memo. “Budget cuts are happening to public higher education institutions across the country. But with challenge comes opportunity, and we are committed to coming together to define that which is essential to our mission. Great institutions like Mizzou adjust to change and move forward in the pursuit of excellence.”
The Great Recession
When the Great Recession hit during the 2007-08 school year, higher education funding was dealt a major blow. All but three states spent less per student in fiscal year 2009, and, in many states, cuts continued in subsequent years.
Even as the economy recovered, higher education funding has been tepid. In fiscal year 2016, many states began to modestly increase funding, but only four states spent as much or more per student than they did in fiscal year 2008, according to a 2016 report from the Center on Budget and Policy Priorities.
Missouri, as of fiscal year 2015, had cut per-student spending by 25.2 percent since fiscal year 2008. That doesn’t include the cuts made by Greitens, but it still ranks as the 17th largest percentage drop in the country.
MU doesn’t have to look far to find other schools facing a similar fate. Most of the 11 states with SEC schools have had to endure severe cuts of their own. Of states with the largest percentage of per-student funding cuts, SEC states made up three of the four hardest hit, six of the bottom 15 and 10 of the bottom 26.
Louisiana might be in the toughest spot of all.
Like Missouri, Louisiana is facing a budget deficit in the middle of a fiscal year, to the tune of $304 million. Louisiana Gov. John Bell Edwards called a special legislative session in February to address the gap, and higher education could be on the chopping block — again.
Louisiana State University President F. King Alexander is worried his best faculty and students might not stick around.
State appropriations to LSU have shrunk by $141 million since 2009. In total, the school’s budget has been cut 16 times in nine years, Alexander told legislators in December. As a result, LSU has lost roughly 500 faculty in 10 years, including 40 professors in the 2015-16 school year.
“We’re worried about losing our best faculty,” Alexander said in January. “We’ve built such good results and our faculty and staff have carried us through, and we’re still setting records and our starting salaries are still strong, so we’ve gotten great results. The one fear is how long can we keep doing that in an environment where we’ve taken 16 cuts in nine years?”
Of particular concern to Alexander and other education leaders is the fate of TOPS, a state program that awards merit scholarships to Louisiana students who attend a public college or university in-state. In June, the legislature voted to fully fund the program for the fall 2016 semester but drop funding to just 42 percent in the spring.
Those cuts, and any more that follow, could make current students unable to afford college and drive prospective students out of state. According to Alexander, other SEC schools are making a recruiting push to attract high-achieving high school students out of state. At the University of Arkansas, for instance, Louisiana students are eligible for a scholarship that lets them pay roughly the same tuition as in-state Arkansas students would.
Robert Mann, chair of the Manship School of Mass Communication at LSU, has seen it unfold firsthand. Mann has two children nearing college age, and he’s talked with other parents who are looking at schools for their kids.
More and more often, he said, he hears parents say their kids are headed out of the state, something they might never have thought about a few years ago. One of Mann’s good friends sent all three of his daughters to the University of Alabama, even though they attended high school on the LSU campus lab school. When it’s nearly the same price to leave, Mann said, students who would be in state at LSU become out of state somewhere else.
At the University of Alabama, attracting out-of-state state students is a central part of the business model. The state cut $556 million from higher education between 2008 and 2013 and was fourth worst nationally in the decline of per student spending.
With state funding representing a dwindling share of revenue, the university needed a new model.
That’s where out-of-state students come in. For one, their tuition is more expensive: In-state Alabama students pay $10,470, but for out-of-state students, that jumps to $26,950. To better recruit the out-of-state crowd, Alabama has ramped up its investment in merit-based scholarships, going from spending $8.6 million 10 years ago to $106 million today, The New York Times reported.
Now, just 43 percent of the student body is from Alabama, and enrollment has hit a record high. However, the cost of tuition continues to rise, making the school less affordable for in-state, low-income students. In June, the UA Board of Trustees voted to increase tuition by 2.9 percent. The year before, the board approved a 3.5 percent hike.
The out-of-state student boon has not reached Auburn University, Alabama's other major public 4-year institution. Auburn has seen its in-state student population hold steady at about 60 percent over that span, even as appropriation cuts have hit the university as well. Auburn has roughly 10,000 fewer students than Alabama and received more than $200 million less from the state in fiscal year 2017.
Alabama may be the most prolific example for out-of-state recruiting, but the school certainly isn’t alone. A Washington Post analysis of 100 major public universities found that the percentage of in-state freshmen declined in 70 percent of the schools between 2004 and 2014. MU’s percentage of in-state freshman fell from 81 percent to 61 percent over that span.
LSU might have to follow suit if it wants to keep up, Mann said. With more revenue coming from out of state, schools like Alabama can afford better facilities and a prettier campus. That matters, he said.
“The kids go to the Alabama campus or whatever and they say ‘Wow, this campus is really sparkling. The facilities are good,’” Mann said. “And then they look around the LSU campus, (and) it’s all rundown”
Things got so bad that Alexander spoke publicly about the possibility of financial exigency, essentially bankruptcy status for academic institutions that would allow a school to fire tenured faculty. That never came to fruition, but it was an earthquake to the LSU community, Mann said.
When funding from state appropriations dries up, the burden of paying for college falls more heavily upon the student. In 1999, the state paid 67 percent of college costs at Kentucky’s public universities, leaving the students responsible for 33 percent. By fiscal year 2013, those numbers had practically flipped. Students were saddled with 61 percent of college costs, according to figures from the Kentucky Council on Postsecondary Education.
In 2012, the University of Kentucky was staring down a $43 million budget gap. Never mind that the university had already lost $50 million in state appropriations since 2007 — the legislature was cutting $20 million more, just as UK’s operating costs has increased by $23 million.
In prior years, the university had put in place various tuition hikes along with hiring and salary freezes to combat dwindling appropriations. With $43 million to make up in two years, that wasn’t going to be enough this time. People were going to lose their jobs.
"It is a painful exercise to implement significant reductions in our workforce," UK President Eli Capilouto wrote in a campus-wide email in June 2012. "But there simply is no way to patch over the holes in our budget with temporary measures or one-time sources of funds any longer."
In the months that followed, 140 staff members were laid off, and 164 vacant positions went unfilled. In a memo sent to staff in June 2012, Capilouto emphasized the need to avoid “hunkering down” with short-term solutions until the economy recovers. Simply waiting for state appropriations to bounce back isn’t an option, he said.
But in 2016, a full four years later, Kentucky was still waiting. The state as a whole ranked sixth in per-student spending cuts from 2008 to 2016 but fares even worse when you look at recent trends. Kentucky is one of just three states to cut higher education in both 2014 and 2015, according to the Center on Budget and Policy Priorities.
Public universities are getting less public. In 2013, then-Louisiana Gov. Bobby Jindal orchestrated a deal for the privately owned research foundation BRF to take over two university-run hospitals in the state.
But the public-private marriage was anything but healthy. Contract disputes spilled into the public fray, and by September 2015, LSU leadership tried to nullify the agreement. It took a court order to bring the two sides back to the table, and since then, the relationship has been marred further by missed payments and motivations that don’t always align.
BRF still operates the hospitals today, including the LSU Health Sciences Center in Shreveport, Louisiana. G.E. Ghali, the center’s chancellor, called the hospital privatization one of the worst things to happen to LSU, earlier this year.
"We've had several students that wanted to come to school here that had decided to go elsewhere. We've lost, since the privatization, a little over 200 faculty members," Ghali said at a presentation in January. "We'll probably hire 100 or 125 of those 200 back. But there's about 75 or so that we've not been able to fill, not hire back."
Now, in the midst of the state’s budget shortfall, Ghali is worried the medical school doesn’t have enough reserves. Hospital income is down, and his private partner doesn't see eye to eye with him, he said.
"Somebody's got to change,” Ghali said in January. “Patient care, education and research. I need a partner that agrees on those three things."
Students are paying more for public college than their state governments are. A report from the Government Accountability Office showed that in 2012, the share of revenue public universities across the country brought in from tuition was higher than the share brought in from state funding. The amount of revenue from tuition has steadily climbed from 17 percent in 2003 to 25 percent in 2012. Meanwhile, state funding has dropped from 32 percent to 23 percent over the same span.
In fact, we may be headed for a future where states don’t fund higher education at all. According to Pell Institute data in a May 2015 report from The Atlantic, Colorado would cut higher education funding to zero by 2025, if current trends persist, with states like Louisiana and Arizona soon to follow.
The one piece of good news? With state funding in free fall, there’s less left for the legislature to strip away.
“Every time they cut us," LSU's Mann said, "it impacts us a little less.”
Supervising editor is Elizabeth Brixey.