State Colleges and Universities and the 2006 Elections
With the 2006 mid-term elections over, higher education will be an important topic in public policy discussions at the federal and state levels.
State colleges and universities will need to stay informed and be prepared to take action as discussions about access, affordability, and accountability
play out in the coming year.
Context
With public dissatisfaction of the war in Iraq at an all-time high and ethics charges clouding the Republican leadership, Democrats made significant
gains in the 2006 mid-term elections. When Congress reconvenes in January, Democrats will control both houses for the first time since 1994, and they
will occupy the majority of governor's mansions and state legislatures.
The Democratic agenda includes several expensive items, including making college more affordable, increasing the minimum wage, removing barriers to
stem cell research, and reforming health care. With a budget deficit of $8.6 trillion, a slim majority in the U.S. Senate, and a Republican in the White
House, it is difficult to predict how successful the Democrats will be in achieving their legislative priorities. Though Democrats now hold the same
majority in the U.S. House of Representatives that Republicans held before the election, many newly elected Democrats are viewed as more moderate than
their incumbent peers. With a divided government for the first time in a dozen years, almost any outcome is possible. State colleges and universities
have much at stake and they need to stay informed.
Observations
By winning control of both the U.S. House of Representatives and the U.S. Senate, Democrats will set priorities and determine the agenda in Congress.
They will lead the reauthorization debates related to the Higher Education Act and No Child Left Behind, as well as other issues related to academe.
As part of their 2006 election campaigns, Democrats promised a “New Direction” in the 110th Congress and advanced a “Six for ‘06”
platform, including a commitment to “college access for all”. They propose making permanent college tuition tax deductions, cutting student
interest rates, and expanding Pell Grants. In fact, House Democratic Leader Nancy Pelosi promised that in the first 100 hours that the House meets,
Democrats will cut student interest rates in half to 3.4 percent for federal student loans and 4.25 percent for federal parent loans.
As they continue to figure out how to structure and pay for their proposal—estimated to cost $18 billion over five years—the conversation
seems to be shifting to less costly options, including reducing interest rates for only one year and applying the lower interest rate to subsidized
loans for students with the most financial need, potentially reduce the cost of their proposal to $3 billion.
Democrats also have proposed to increase the maximum Pell Grant by 25 percent (from $4,050 to $5,100), while also proposing to double the HOPE scholarship
tax credit (from $1,500 to $3,000). These proposals are even more costly, adding up to approximately $60 billion. In order to implement these changes,
Democrats will need to find combinations of spending cuts and new revenue—which will become increasingly difficult with a rising deficit and the
costly war in Iraq.
The Elementary and Secondary Education Act (ESEA), last reauthorized in 2001 as the No Child Left Behind (NCLB) Act, will expire in 2007 and Congress
will need to reauthorize its provisions, including teacher preparation. This debate will be contentious and it is likely that the reauthorization will
not be completed in 2007.
Though President Bush and the new chairmen of the House and Senate education committees—Congressman George Miller and Senator Edward (Ted) Kennedy—favor
timely reauthorization, critics have been arguing for years that NCLB has been underfunded. In addition, many newly elected Democrats campaigned in
opposition to mandates in the law. Both Congressman Miller and Senator Kennedy’s priorities for NCLB will include funding of NCLB provisions and
a commitment to teacher training, preparation, and quality.
Due to the strong interest in NCLB, the reauthorization of the Higher Education Act (HEA)—already delayed by several years—may take a back
seat to K-12 education debates. During the 109th Congress, HEA was extended several times and a budget reconciliation bill signed into law by the President
changed HEA student loan provisions. While the Senate failed to approve a bill addressing the other provisions in HEA, the House passed its revision
of HEA. The new Democratic House leadership will likely start from scratch on HEA and may expand Congressional oversight over the guaranteed student-loan
program. They are not likely to include provisions designed to favor for-profit colleges, and college cost issues may continue to be an issue of debate.
It is expected that the Senate will pass a similar HEA bill to the one passed in Senate committee during the 109th Congress.
In the new political climate, it is unclear what will happen to the U. S. Secretary of Education's Action Plan, developed in response to the final report
of the Secretary's Commission on the Future of Higher Education. A key question is whether the U.S. Department of Education’s “negotiated
rule making” process will address the recommendations of the Secretary’s plan or if it will stay focused on what it is obligated to do—to
carry out the new Academic Competitiveness Grants and SMART grants. Despite these uncertainties, the Secretary’s first order of business became
clear when she called an Accreditation Forum in late November to address ways to strengthen the measurement of student learning outcomes as part of
accreditation. It is expected that this will be an area of continued interest, even with a Democratic Congress, since accrediting agencies must be reviewed
and recognized every five years by the U.S. Department of Education. The central topics under discussion are the extent to which comparable standards
among accrediting agencies can be developed and issues of transparency and public right-to-know.
Democrats made big gains in governor’s mansions and statehouses. The new Speaker of the House should expect a heightened level of activism
from the governors. Governors were elected in 36 states this year, and for the first time since 1994, Democrats control of a majority of governor's
mansions, 28 compared to 22 for Republicans. This reverses the pre-election picture in which Republicans controlled 28 governorships, Democrats 22.
Governors expect to have more influence with the Congress in policy areas of common concern such as minimum wage, stem cell research, immigration, Medicaid,
college affordability, and reauthorization of No Child Left Behind.
On the legislative side, Democrats picked up more than 330 seats and hold a majority (54 percent) of the nation’s 7,382 statehouse seats. Democrats
control both legislative chambers in 23 states, a gain of four states. Republicans control both chambers in 15 states, down from 21. (The rest are split.)
In about half the states, a single party controls both legislative chambers and the governorship: 15 Democratic, a gain of nine states, and 10 Republican,
a loss of two.
This was a busy year for state ballot measures, with good and bad news for higher education.
On a measure strongly opposed by higher education groups, Michigan voters overwhelmingly approved (56 percent) a proposal to ban race and sex-based
affirmative action in all government programs, including college and university admissions. This makes Michigan the third state to pass such a measure,
following California (1996) and Washington (1998). Expect the University of Michigan to explore possible legal challenges to this amendment as well
as other options for defending diversity. Watch for similar proposals to emerge in other states.
Voters in Maine, Nebraska, and Oregon rejected Taxpayer Bill of Rights initiatives (TABOR) that would have imposed strict limits on increases in state
spending. Colorado passed similar legislation in 1992 to codify strict tax and spending limitations in the state constitution, and decreased state appropriations
for higher education resulting in increased tuitions. This experiment with TABOR illustrates the dangers of putting untested fiscal constraints directly
into state constitutions.
Missouri narrowly approved a constitutional amendment that would prohibit state and local governments from restricting stem cell research allowable
under federal laws. Voters in Arkansas, California, New Mexico, North Carolina, and Rhode Island approved bond measures for facilities improvements.
Arizona passed Proposition 300 that will prohibit undocumented students from receiving in-state tuition rates at public colleges. Seven of eight states
opted to ban gay marriage, which could affect institutions that have approved or are considering domestic partnerships.
Higher education affordability, access, and accountability promise to be major issues in 2007 state legislative sessions.
Most states are enjoying their best budgetary climates in six years, which has allowed state legislatures to keep average public four-year tuition increases
at the lowest rate (6.3 percent) since 1999-2000. Although this is promising news for students, the longer-term trend is that higher education is becoming
less affordable as appropriations are not keeping pace with state economic growth. After each of the four recessions since 1979, states have failed
to restore higher education appropriations to pre-recession levels and public colleges are steadily becoming less “public” as families are
shouldering more of the cost burden.
In 2006, once again state funding for merit-based programs outpaced the growth in need-based funding, continuing to make college less affordable for
the most needy students. Twenty-three states have at least one merit-based aid program, accounting for 17 percent of total state grant aid. States will
continue to battle over financial aid strategies, some emphasizing need-based aid to promote access while others maintain that merit-based aid is the
best way to attract and retain academic talent for state economic development.
The National Conference of State Legislatures just released a report from its bipartisan Blue Ribbon Commission on Higher Education calling on state
legislators to take the lead in reforming higher education or “risk opening the door to unnecessary federal intrusion.” Criticizing state
lawmakers for not making higher education a funding priority, it urges them to determine a public agenda for higher education for the future, set clear
goals for the state and higher education, and hold institutions accountable for performance. Expect this report to generate discussion in the states,
but whether state legislators act on its recommendations remains to be seen.
Conclusion
Higher education emerged as a key issue this year in both Congressional and state elections and will remain important in upcoming public policy discussions.
State colleges and universities have much at stake and need to pay close attention as discussions about access, affordability, and accountability play
out in the coming year.
RESOURCES
Grapevine. The 50-state higher education funding survey is administered through the College of Education at Illinois State University,
and contains data on tax appropriations for higher education over time.
grapevine.ilstu.edu
National Association of State Budget Officers. NASBO publishes two reports of interest to state budget-watchers: Fiscal Survey of the
States and State Expenditure Report that analyze state fiscal health and budgeting trends. nasbo.org
National Conference of State Legislatures. NCSL provides up-to-date data and analysis of state legislative races, ballot measures,
and political commentary.
ncsl.org
Nelson A. Rockefeller Institute of Government. The Institute’s Fiscal Studies Program at the State University of New York-Albany
serves as an authoritative data source on state revenue collections, publishing State Fiscal News and State Revenue Reports.
rockinst.org
U.S. Department of Education. The Spellings’ Commission on the Future of Higher Education laid out a blueprint for a 21st century
higher education system that focuses on affordability, access, competitiveness, and accountability.
ed.gov
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