Budget Deal May Be Close; What Will It Mean to Colleges and Universities?

Posted by NYPIRG on May 1, 2023 at 8:55 am

The big news out of Albany last week was Governor Hochul’s announcement of a “conceptual” budget deal.  The governor said that she and the state’s legislative leaders had agreed to a final budget that would spend $229 billion and that the agreement would include changes to the state’s bail law, increase the minimum wage, add to the number of active charter schools, and provide a state infusion of cash for the beleaguered Metropolitan Transportation Authority.

The final agreement – which will be over a month late – is expected to include a $1 per pack increase in the state’s cigarette tax, as well as a ban on the use of fossil fuels to power new buildings that are constructed later this decade.

Details on the budget deal are spotty, and “conceptual” budget agreements do not, of course, represent the final agreement.  The actual final budget will be contained in the bill language that should be made available this week.  But the agreement marks the beginning of the end of budget negotiations, a battle that should have been concluded by April 1st.  Assuming that the “conceptual” agreement holds, lawmakers will begin approving legislation this week.

There is one area of the budget that we’re still left in the dark on: the state’s support for higher education.  Governor Hochul had proposed annual public college tuition hikes to bolster state funding for higher education.  According to media reports that proposal has been rejected.  It is expected that the final agreement will increase state support to offset the loss in revenue that the governor’s plan would have derived from college students and their families.

The bigger concern, though, is whether the final budget will reverse the course of New York’s financially hemorrhaging colleges.  A darkening financial cloud covers many institutions of higher education.  Generally speaking, independent and public universities are in reasonably good financial shape; community colleges and four-year independent and public colleges are facing serious problems.

Most recently, the small liberal arts Cazenovia College announced that after nearly 200 years, it would be closing its doors after this Spring semester.  According to the State University of New York’s faculty union, nineteen SUNY campuses are facing financial shortfalls.  A significant part of the financial difficulties stem from declining enrollments, but much of it is the result of public policies.

For example, thirty years ago New York used to provide over $100 million in support to colleges in the independent sector.  Today it provides only one-third of that amount – and that’s not inflation adjusted, it’s the actual amount.

Until the Cuomo Administration, New York had an informal policy that whenever public college tuition went up, it was matched with an increase in the maximum financial assistance provided by the Tuition Assistance Program (TAP).  In that way, the state ensured that the poorest public college students had the cost of tuition covered and it helped private colleges since TAP covers those students, too.

The Cuomo Administration severed that relationship when it decided to increase public college tuition automatically over several years but did not increase TAP awards.  Instead, it required the colleges to make up the difference in lost state aid to the students.  That policy resulted in what became called the “TAP gap,” which undermined SUNY campus finances (as well as those of the City University of New York) and contributed to today’s dire financial situation.

How will the new budget address that problem?  Will it offer a stopgap measure that staunches the financial bleeding this year, but does not reverse the downward trend?  Placing a Band-Aid over the short-term problem is the most likely outcome.

That raises the larger question:  What will the state do to reverse the financial problems facing higher education?  Does the state have too many colleges?  If so, is there a plan to deal with that?  Or is the problem simply one of failing to adjust to the needs of college students of today? 

Colleges and universities not only provide an education for the state’s future leaders, but they are also economic engines in their communities.  When one closes down, the whole community suffers, not just the individuals who work there. 

These are important questions.  New York’s decisions on higher education policy today will affect the quality of its workforce, our civic life and the state’s economy for decades to come.

Next year, New York will mark the 50th anniversary of the state’s TAP program.  For 50 years, TAP has helped ensure that needy college students got the financial help that they needed to attend college in New York.  Over that half century, much has changed.  If this year’s budget offers only one-year relief, New York policymakers should use that time to begin a public process to assess the state’s higher education sector and plan for the future.  New York deserves a plan that embraces college in the 21st Century, protects the economic benefits provided by local colleges, and ensures that the state is a national leader in higher education.