Four years ago, state lawmakers approved a plan that changed its relationship with the state’s public colleges and students. The plan contained two major changes: public college tuition would be raised automatically and the state would commit not to cut state support for those institutions and would not use the increased tuition to close budget holes.
As part of the deal to increase tuition up to $300 annually, the state pledged to maintain its support. According to state officials, “In return, the State committed to maintain [the state and New York city university systems] current funding year-to-year – this preserved budgets for curriculum innovation and ensured students were not back filling State cuts.”
This component of the plan was a Maintenance of Effort (MOE) provision, which mandated the state provide a steady level of funding to public colleges that would not depend on revenue generated from tuition.
The idea was that this MOE should have allowed the State University of New York and the City University of New York to invest the funds generated by the tuition hikes toward expanded academic and student support services.
But it turns out that there was a major caveat to the state’s promise.
Buried in the fine print of the 2011 legislation was that the MOE was defined to mean that the state would spend no less than the total amount it spent the year before. Yet, annual inflation erodes the purchasing power of the dollar; in essence keeping state support at a steady level meant a cut. Moreover, the fine print also left vague what services would be covered by the MOE.
When the plan was approved in 2011, critics thought the result of annual tuition hikes would be a shift in the cost of attending public college from Albany to the students and their families. Sadly, it appears that they were right.
Tuition at state public colleges is expected to increase by as much as 42% by the time the law expires on July 1, 2016. While tuition has jumped dramatically, state support for SUNY and CUNY has remained largely flat. As a result, the cost to maintain SUNY and CUNY’s services at the same level as it was in 2011 has increased by nearly $200 million combined.
The state made up the difference by using the increased tuition dollars, undermining its promise to students and their families. Eroding state support coupled with rising tuition has had an impact: Prior to the 2008 recession, the state paid more than half of SUNY’s operating costs. Now student tuition and fees account for 64 percent of SUNY’s operating costs and the state pays a mere 36 percent of those costs.
During that time, the state has not felt budgetary shortfalls: In fact, New York State’s budget has grown from $134.8 billion in 2011 to $143.8 billion in 2015, roughly a 7.5 percent increase. That’s right, while the state has spent 7.5 percent more than it did at the beginning of the Cuomo Administration, students have been forced to pay more and the state has shortchanged public colleges in the budget. Clearly, priorities have been elsewhere.
The effect has been to shift the burden of operating New York’s public colleges from the state to college students and their families.
Lawmakers now understand the mistake in the MOE and have overwhelming approved a fix. The legislation requires the state to provide funding to cover all mandatory costs of both SUNY and CUNY. Those mandatory costs include items like utility bills, building rentals and other inflationary expenses incurred by both the state and city universities and the state university health science centers. The legislation has broad support: SUNY, CUNY, faculty and student groups all supported the bill and it passed the Senate 62-1 and passed Assembly 146-1.
Now the ball is in Governor Cuomo’s court.