Independent Analysis and Information on Iowa Tax and Budget Issues

Another myth destroyed: No growth boost in states without income taxes.

See Bloomberg News report.
<

Finally, a Step Forward

Higher Education Still Suffers from Years of Steps Backward in Funding
IFP Backgrounder
Backgrounder (2-pg PDF) June 26, 2012


Headlines trumpeted the increase in higher education funding as the Iowa legislative session wound down. While increased funding for universities, community colleges and tuition assistance programs is noteworthy and laudable, the headlines often neglect a critical fact: Iowa’s higher education system still remains woefully underfunded.

A series of Iowa Fiscal Partnership policy briefs released in March and April gave important context to the higher education debate at the Capitol this past legislative session. In short, funding for Iowa’s higher education system has decreased precipitously in the past decade.[1] Restoring funding to previous levels would have required appropriations far larger than anyone — including the governor and Senate Democrats — was proposing. At the same time, proposals coming out of the House would have pushed higher education funding further down the slope on its long slide.[2]

While some of decreases can be attributed to tight budgets in recessionary years, Iowa’s lawmakers did not increase funding when the economy recovered.

Governor Branstad proposed increasing higher education funding in his Fiscal Year 2013 Budget Recommendations.[3] The Governor’s recommendation for increased funds for the Board of Regents — the body that oversees Iowa’s three public universities as well as the Iowa School for the Deaf and the Iowa Braille and Sight Saving School — reversed recent trends, but his proposed levels of funding still fell well below historical standards.[4]

Funding for Iowa’s 15 community colleges has also decreased in recent years, including a significant dropoff even as Iowa’s economy and state budget recovered from the recession. Governor Branstad proposed increasing community college funding by $4 million. The Legislature ultimately improved on the Governor’s recommendation, boosting community college funds by $13.5 million over FY12 levels.

Through a series of programs administered by the Iowa Student Aid Commission, the state provides tuition assistance grants to students at public universities and colleges and private colleges. As with funding for other higher education initiatives, programs and institutions, Student Aid Commission funding has decreased significantly over the past decade. Action by the General Assembly will increase funding slightly in FY13 for the College Aid Commission. Funding for the three largest Student Aid Commission’s programs — the Iowa Tuition Grant (ITG) for students at private non-profit institutions and the Iowa Vocational-Technical Tuition Grant (IVTTG) for Voc/Tech students at community colleges, and the National Guard Educational Assistance Program (NGEAP) will remain mostly flat.

The increase in College Aid Commission funding comes primarily through the creation of a new, $5 million tuition grant program called the Skilled Workforce Shortage Tuition Grant.[5] The new tuition grant program will help students cover the cost of vocational-technical or career-option program education, if they demonstrate financial need and are enrolled in a program in an industry with a shortage of skilled workers, as determined by either the college or the Iowa Department of Workforce Development.

Table 1 below illustrates that, despite the FY13 funding increases in higher education, funding remains below FY09 levels and, particularly in the case of the Board of Regents’ institutions, well below the high-water marks during the previous decade.


Table 1 Higher Ed Funding Below Recent Levels

Notes: General university funds for the three public universities only in Board of Regents figures; College Student Aid Commission includes the Iowa Tuition Grant (nonprofit and for-profit institutions), IVTTG, NGEAP and the Skilled Workforce Shortage Tuition Grant. FY12 College Student Aid Commission includes a $1.3 million supplemental appropriation to the National Guard program, signed in January 2012. Source: Legislative Services Agency, Fiscal Services Division.

When adjusted for inflation — not shown above — the picture is even more dramatic. Board of Regents funding is down nearly 40 percent and community college funding nearly 15 percent from their high-water marks in FY00, in 2011-adjusted dollars.[6]

While the General Assembly deserves credit for reversing the trend of lower funding for higher education, Iowa has further to go to match its own record of commitment to students.

[1] “Up and Down: Regents’ Costs Rise, Funding Drops in Iowa,” “Lost Momentum for Iowa’s Community Colleges,” and “Iowa Students: Increasingly on their Own,” 2012, Iowa Fiscal Partnership, www.iowafiscal.org.
[2] For a comparison of House and Senate proposals, see Notes on Bills and Amendments: Education Appropriations Bill Senate File 2321: Senate/House Comparison, Iowa Legislative Services Agency (LSA), Fiscal Services Division, April 11, 2012. .
[3] Summary of FY2013 Budget and Governor’s Recommendations, LSA, Fiscal Services Division, January 12, 2012. .
[4] See “Up and Down: Regents’ Costs Rise, Funding Drops in Iowa,” Iowa Fiscal Partnership.
[5] Notes on Bills and Amendments: Education Appropriations Bill Senate File 2321: Conference Committee Report.
[6] Adjusted using the Higher Education Price Index, Commonfund.

The Iowa Fiscal Partnership is a joint budget and tax policy initiative of two nonpartisan, Iowa-based organizations, the Iowa Policy Project in Iowa City and the Child & Family Policy Center in Des Moines. Find IFP on the web at www.iowafiscal.org.


 
A joint effort of the Iowa Policy Project and the Child & Family Policy Center (logos).