Last week, state lawmakers continued their examination of Governor Hochul’s budget, in particular her higher education plans, by holding public hearings.  It was clear from the testimonies at the higher education hearing that there was widespread support for the proposals advanced by the governor, but that there was also broad agreement that her plan did not tackle the daunting challenges facing colleges across New York.

First the support.  Testifiers agreed that the governor’s plans to eliminate the so-called “TAP Gap,” boost funding for educational opportunity programs, childcare, and expand the state’s largest college financial aid program – the Tuition Assistance Program (TAP) – were all worthy of support.

The “TAP Gap” is the result of a decision made in the first year of the Cuomo Administration as part of the SUNY2020 plan, which allowed regular increases in public college tuition.  But that plan included a trap door.  As public college tuition went up, financial assistance from the state’s TAP stayed frozen. 

In order to ensure that the neediest students still had their tuition costs covered by the state, the State University of New York and the City University of New York campuses were required to provide that assistance from their own coffers.  As the tuition price went up and financial aid stayed frozen, more and more financial aid costs from the state treasury were placed onto the books of public colleges.  As a result, the state forced public colleges to cover the needs of the most economically needy students.  As tuition kept going up, the gap increased and increasingly added financial stress to an already-stressed system.  Last year, lawmakers agreed to phase in state support to cover the gap between tuition and financial aid.  Governor Hochul’s budget would eliminate that gap this year.

While the governor’s budget eliminates the “TAP Gap” which helps stabilize public colleges’ finances, it does little to reverse the sector’s downward financial trends that have resulted from previous Cuomo budgets and the pandemic.  The upshot is that many public and independent colleges are facing financial peril.    

For example, SUNY was seeing dramatic enrollment declines (outside of its university centers) during the pre-pandemic period.  The enrollment losses have been staggeringly large at many community colleges.  This trend preceded the pandemic, but the pandemic has accelerated the slide toward a financial abyss.  CUNY had a more stabilized enrollment until the pandemic, and now it is facing revenue gaps from significant enrollment losses.  Smaller, independent colleges have also seen enrollment declines.  Enrollment declines result in revenue shortfalls that can result in reduced services and/or workforce reductions.  Both of these outcomes make those colleges less attractive to potential students.  The less attractive the campus, the less likely students will want to attend, which triggers a continued downward spiral.

Despite massive state financial surpluses, Governor Hochul’s budget proposes little to reverse these trends.

Testimony from college administrators, faculty, and students all called for significant additional state financial assistance.  According to one analysis, in order to restore the tuition losses to SUNY, the state would have to add $500 million in support and the City University would need upwards of $200 million.  Testimony also pointed out that the state’s support for private colleges through its “Bundy Aid” program was at a high of $100 million in 1990 and has been slashed to a bit more than $35 million in the governor’s plan. 

Groups called for hundreds of millions of dollars in additional state aid in order to reverse the increasingly dire finances of many colleges.

Testimony focused on the benefits of such additional investments.  Higher education plays an important role in boosting the economy of the state.  Institutions of higher education are often regional economic engines.  State investments in higher education generate economic activity – hiring staff, spending in the community, higher incomes and tax dollars.  Yet, for years the state has underfunded higher education to earmark other, flashier economic strategies – some that succeeded and some that failed miserably, and some that failed scandalously – with prison terms for top public officials.

Investments in higher education always pay back far more.  But state investments have stagnated while student enrollments have suffered.

Of course, enrollment declines can be the result of other factors as well – changing demographics and weakening economies.  However, it was clear from the hearing that Governor Hochul’s budget is simply too limited to provide the resources necessary to turn around higher education and help lift the state’s economy.   The message was unmistakably clear: Now is the time for the state to act, and to act boldly, to restore New York’s institutions of higher education.