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Sunday, March 24, 2013

New report highlights issues facing higher education funding in NH budget process

By DANIELLE CURTIS

Staff Writer

To revive lagging economies, many states have turned to their natural resources: Pumping oil, mining coal and supplying natural gas to other states.

New Hampshire College and University Council Executive Director Tom Horgan sees one primary resource that can be leaned on in this state for economic recovery: knowledge. ...

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To revive lagging economies, many states have turned to their natural resources: Pumping oil, mining coal and supplying natural gas to other states.

New Hampshire College and University Council Executive Director Tom Horgan sees one primary resource that can be leaned on in this state for economic recovery: knowledge.

“We don’t have natural gas or oil; our future and our economy is a knowledge-based economy,” he said. “The only way you get a knowledge-based economy is by educating our own and bringing educated into the state.”

But with state funding for higher education cut in half during the last biennium and still up in the air for the next two years, Horgan and other education leaders in the state are worried that New Hampshire’s most valued resource could be diminished.

“As we see a divestment” in higher education, said Todd Leach, interim chancellor of the University System of New Hampshire, “it sends the wrong signals to businesses looking to come here.”

A national report issued last week highlights many of the funding issues the state faces during its ongoing budget process, showing just how New Hampshire’s support for higher education stacks up with other states.

The state was one of only two that cut its funding to higher education by about half from fiscal 2008-13.

Its 49.9 percent cut, which came in 2011, was only outdone by Arizona, where 50.4 percent of state funding was cut over those five years, according to the report by the Center on Budget and Policy Priorities.

State funding dropped by an average of 28 percent, while tuition rates increased by 27 percent nationwide.

New Hampshire saw its tuition rise by about 37 percent. Only 10 states saw tuition jump higher.

Phil Oliff, an author of the report and a policy analyst at the center, said lagging support for public higher education is a national issue and one that states need to fix if they want to see economic recovery.

The key, he said, is finding ways to fund higher education without negatively affecting other areas of state budgets facing plenty of cuts of their own.

“State policymakers need to make higher education a priority,” Oliff said.

“If states are going to make significant progress in rebuilding their higher education systems, they’re going to need additional revenue.”

Oliff’s insights aren’t lost on lawmakers and education leaders in New Hampshire, where questions about available revenue in the next two years have left funding for higher education in limbo.

Gov. Maggie Hassan’s proposed two-year budget would increase funding to the University System of New Hampshire by $20 million in fiscal 2014, with an additional increase of $15 million in fiscal 2015, bringing the system back to 90 percent of its appropriation before historic cuts in 2011 and providing the needed funds to freeze in-state tuition.

The Community College System’s funding would actually grow by $3 million in 2015 under her budget.

But while many lawmakers support the restoration of higher education funding, there is one key difference between the governor’s budget and the one being crafted by the House: revenue from legalized gambling.

Hassan’s budget spends $80 million in license fees expected if a casino bill is made into law this year, some of which would be used for higher education funding.

The Senate already passed a bill that would award one casino license in the state, but the House has yet to approve a bill.

“I think the House is struggling with their revenue side of the picture,” said Richard Gustafson, director of the state’s division of higher education. “Historically, the House has not been supportive of legalized gambling.”

Rep. Dan Eaton, D-Stoddard, leads the House Finance Division II, the subcommittee charged with making education-related budget recommendations.

Eaton said the subcommittee will present its recommendations to the full House Finance Committee on Tuesday, and plans to recommend $6 million less annually for higher education than included in the governor’s proposal. The division did not recommend any cuts to the Community College System.

If unanticipated revenue did come in over the next two years, from legalized gambling or some other source, the University System is at the top of the House’s list for full funding, Eaton said.

“I’ve always thought the state needs to do more to bring in more revenue,” he said. “I don’t think anyone, regardless of their thoughts on higher education, should be proud of the fact that we are 50th in the nation for funding higher education. It’s an embarrassment.

“I would give them an additional $100 million if I could, but there are a lot of demands out there.”

Higher education leaders say they’re hopeful the University System will receive the full appropriation proposed in Hassan’s budget.

Leach said the system saw a 13 percent decline in applications and enrollment of first-time freshmen at the state’s colleges and universities after the 2011 cuts, as students opted for less expensive out-of-state options.

And while the University System receives only $55 million in annual state aid under the current budget, it gives about $133 million directly to students in stipends for in-state tuition and student scholarships.

“As the state divested, the University System tried to maintain its own investment and increase it, if possible,” Leach said. “We understand the cuts were in response to some serious budget challenges, but it was a very short-term approach.”

Leach said the state has been losing young people to other states for years –
nearly half of its college-age residents – and that the issue will only worsen if the state continues to lag in support for higher education.

“It’s a pretty alarming number, and I’m hopeful that the governor’s plan will restore enough funds to freeze tuition and send a strong signal that we’re investing back into our students,” he said.

But not all lawmakers are convinced the University System needs a full restoration of funding.

Rep. Ken Weyler, R-Kingston, a member of the House Finance Division II, said he still has many of the same concerns he did in 2011, including rising salaries for faculty and staff.

And while education leaders cite the state’s aging population as reason to invest in education and bring young people back to the state, Weyler said those statistics are all the more reason to invest the state’s limited resources elsewhere, such as increasing services for the elderly.

“Students leaving to go to other states, I think that’s a false flag to run on,” he said. “The state has no income tax. That helps us attract more people than spending more money on higher education would.”

Danielle Curtis can be reached at 594-6557 or dcurtis@nashua
telegraph.com. Also, follow Curtis on Twitter (Telegraph_DC).