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June 20, 2012 4:38 PM Back in Black

By Daniel Luzer

Part of the reason for declining state funding for higher education in recent years, I’ve pointed out before, has to do with the other things states have to fund. When the economy is bad, states get less money in tax revenues but still have to pay for things like state employee pensions, which legislatures are often constitutionally required to fund.

It looks like states aren’t so desperate anymore. They’ve got money again. But don’t expect them to start generously funding education. According to an Associated Press piece by Paul Davenport:

States starting to turn the corner on their Great Recession budget woes are taking the cautious approach, socking away millions of dollars in rainy day funds rather than restoring spending for education, health care and social services.
At least 21 states, including Arizona, Michigan and Ohio, are putting parts of their surpluses into reserves, an approach championed mostly by Republican governors and lawmakers who say the return of revenues to pre-recession levels doesn’t mean it’s time to spend.

A recent study by the National Governors Association and the National Association of State Budget Officers indicated that state tax revenues would increase 4.1 percent to $690.3 billion in 2013. State spending, however, will only increase 2.2 percent.

States, particularly those lead by Republican governors and state legislatures, say they want to build up state cash reserves to be secure in the event of further economic problems.

Democrats, however, mostly prefer to spend the additional money on education and children’s health care, areas that suffered when states were short on cash in the last three years.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer