Funding for higher education — in Missouri and across the nation — has taken a drastic hit over the past decade, according to a report released last month from the Center on Budget and Policy Priorities.
After adjusting for inflation, overall state funding for public two- and four-year colleges last year was more than $6.6 billion below what it was in 2008 before the recession, the authors of the report found.
Between 2008 and 2018, 41 states — including Missouri, Kansas and Oklahoma — spent less per student. Spending dropped in that decade by 27.7% in Missouri, 22.5% in Kansas and 36.1% in Oklahoma, placing all three in the bottom half of states.
Missouri was the 11th-worst state for drops in per-student funding over the past decade, according to the report. Officials at Missouri Southern State University in Joplin say they have watched their state appropriations in that period level off and drop, while tuition continues to make up an increasing share of revenue.
“The state of Missouri has never overfunded higher education,” said Alan Marble, president of Missouri Southern.
Tuition as revenue source
To offset reduced state funding, colleges across the country have responded by increasing tuition, reducing faculty or limiting course offerings. Annual published tuition at four-year public colleges has risen by $2,708, or 37%, since the 2008 school year, according to the report.
History of MSSU appropriations, tuition
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Surprisingly, Missouri is the second-best state for tuition increases at public, four-year universities, only collectively raising rates by 5.7% in the past decade. By contrast, published annual tuition costs have more than doubled in the same time frame in the worst-ranked state, Louisiana.
Much of Missouri’s lower increases can be explained by the deals struck between public colleges and former Democratic Gov. Jay Nixon prior to the end of his term in 2016. For several consecutive years, colleges pledged not to raise their tuition in exchange for flat state funding.
Missouri institutions have also been constrained by Senate Bill 389, which for more than a decade restricted them from raising tuition at a rate higher than inflation without either seeking a waiver from the state or risk a financial penalty. In years when Missouri Southern sought a tuition raise, for example, it typically was limited to nominal increases around 2% or 3% under the law.
Those caps were renegotiated earlier this year by lawmakers, and institutions now have a bit more flexibility to raise tuition more than the rate of inflation in years following funding cuts.
Missouri Southern had years of nominal tuition increases until recently. Over the past two years, students have seen their tuition go up by about $20 per credit hour each year.
Like many of his peers, Quinten Sargent, a junior majoring in mass communications and public relations, has felt those effects.
“Previously, it wasn’t necessarily an out-of-pocket expense for me to go to school, and this semester, I did have to go on a payment plan to pay for school,” he said.
Effect on MSSU
Beyond tuition, MSSU has adjusted to the declining revenue source of state funding by trimming where it’s able.
The area that ends up taking the biggest hit is maintenance, where needs are either temporarily addressed or deferred even longer, said Rob Yust, vice president for business affairs. According to a report last fall from the Missouri Department of Higher Education, MSSU at the time had more than $23.8 million in deferred maintenance, such as replacement of HVAC equipment, roofs, lighting, roads and parking lots, according to the report.
Additionally, some faculty and staff positions aren’t refilled when employees leave or take phased retirement options, and new hires are scrutinized before approval to determine if the position is necessary, Marble said.
Courses are being offered to students during peak daytime hours when they’re more likely to be filled to capacity, justifying faculty and staff salaries. And some courses have been combined, adding larger class sizes and reducing some employee costs.
“We’ve cut budgets (and) become much more efficient in every way,” Marble said.
Marble credits Empowering U, formerly called the Great Game of Education, with helping the university budget better. An open-book style of management that’s based on the methodology used by Jack Stack’s Great Game of Business, the program has allowed MSSU departments and employees to trim expenses across the board, Marble said.
“Our Empowering U program has really saved us,” he said.
Marble said university officials have tried to avoid affecting academics, but Sargent, the student, said he can see some effect there.
“I have noticed a lot of classes switching to a hybrid (model) where we go to class a couple of days and then do a lot of stuff online,” Sargent said. “I see funding pulled from the arts, whether you’re talking about theater or music or communications. ... But it’s a big disadvantage because the arts play so much into higher education.”
Despite the tough decade, local university officials have reason for optimism for the future.
Between 2017 and 2018, nearly half of states were spending more per student. Missouri appears to be on the upswing after several years in which higher education was targeted for significant cuts.
“That trend is proving to be true in Missouri,” said state Rep. Cody Smith, a Republican from Carthage who chairs the House Budget Committee. “We are starting to restore those cuts.”
In early 2017, former Republican Gov. Eric Greitens restricted $76 million from the higher education budget for the remainder of that fiscal year and recommended a further cut of $90 million for fiscal year 2018 in the first budget proposal of his term. And his 2019 budget proposed giving higher education institutions $92 million less than budgeted for 2018.
Greitens resigned from the governor’s position in June 2018. His successor, Republican Gov. Mike Parson, has made workforce development — and, by extension, higher education — a priority of his administration.
Parson’s 2020 budget proposal earlier this year did not cut higher education but sought to hold core funding relatively flat. He also proposed tens of millions of dollars in new scholarships and programs that would prepare students for the workforce.
“With a united vision between the state and the private sector, Missouri continues to find innovative solutions to improve our state’s business climate and overall economy. However, we must do more to ensure our workforce is prepared for the jobs of today and the future,” said Kelli Jones, Parson’s communications director, in a statement to the Globe. “The governor’s budget made substantive investments toward that goal, investing in programs aimed at ensuring more Missourians have the opportunity to gather the necessary education and training they need to enter the workforce and fill high-demand jobs. Businesses will also receive valuable assistance to upgrade their workers’ skills for the needs of an evolving economy. Gov. Parson is committed to investing in Missouri workers, helping companies grow and keeping quality jobs here in our state.”
When the 2020 budget was finalized, Missouri Southern actually received a $1 million boost in its core funding. It also received a one-time $1.8 million allocation for its STEM (science, technology, engineering and math) fields in order to meet the region’s workforce needs in that area.
For MSSU officials, it signaled that perhaps state leaders were returning to making higher education a priority.
“I think Gov. Parson has done the best job in a long time in understanding higher education, including workforce needs,” Marble said. “He’s put the money behind his talk.”
Balancing state budget
It’s that workforce development piece that the Center on Budget and Policy Priorities report’s authors say will require states to develop policies to better fund higher education moving forward.
“A large and growing share of future jobs will require college-educated workers,” they said. “Sufficient public investment in higher education (both two- and four-year), along with alternative routes to continued training for individuals who don’t go to college, would help states develop the skilled and diverse workforce they will need to compete for these jobs.”
State lawmakers say it’s not so simple. In Missouri, those requirements are balanced with other areas that must, by law, be adequately funded, such as public K-12 education.
Smith, who takes a key role in crafting the state’s $30 billion budget, said his funding priorities each year are public safety, infrastructure and K-12 education. Areas such as higher education and economic development incentives “would come downstream” of those three priorities, he said.
When budget cuts need to be made, higher education often winds up on the chopping block because it has other revenue sources — tuition is the largest share of that — and because its “customers,” or students, are of working age and can help pay their way through school, Smith said.
“History has shown us that the General Assembly will look to the path of least resistance when it comes to budget cuts, and that starts with higher education,” he said.
Smith said it’s too early to tell whether higher education will fare better in the 2021 budget, which by law must be balanced. The first consensus revenue estimates for the next fiscal year will be available in December, he said, and those will indicate whether a funding boost will be possible for colleges and universities.
“We’re going to be cautiously optimistic that revenue will increase enough that we could do some things like that,” he said.