Report: State Funding to Community Colleges Drops, Enrollment Climbs

By Diane Heldt, Reporter

DES MOINES, Iowa - State funding for Iowa's community colleges has dropped at the same time enrollment has grown dramatically, which means increased reliance on student tuition and fees, according to a report released today by the Iowa Fiscal Partnership.

State funding for community colleges held steady during the 1990s, but showed a net decline over the past decade. The adjusted-for-inflation decrease in state funding — a 21 percent drop from 2001 to 2012 — came at a time when enrollment increased by more than 60 percent, the report states.

That means rising tuition for students and their families, rising debt burden and possibly putting needed education out of reach for some Iowa families, said Andrew Cannon, research associate for the Iowa Policy Project, a nonprofit, nonpartisan public policy and research organization in Iowa City that is part of the Iowa Fiscal Partnership.

"Perhaps lawmakers have lost sight of the critical role that community colleges play in Iowa's economy," Cannon said. "The revenue picture has really become unbalanced ... and now relies heavily on tuition and fees."

The organization released a report earlier this month showing similar trends — that tuition and state funding have swapped places in their role covering costs — at Iowa's three state universities, as state budget cuts force parents and students to pay more.

State funding for higher education is highly responsive to broader economic trends, Cannon said. It decreases when there is a recession and then you typically see a slow recovery in funding after a recession, he said. The Iowa trend for the past several years has been decreased funding, Cannon said.

"Our hope, of course, is that we'll follow the trend of previous years, that we begin to increase funding as we begin to experience economic recovery," he said.

But that doesn't seem to be what's happening this year, as the House Republicans push much lower funding for higher education than what was recommended by Gov. Terry Branstad, while the Senate Democrats push higher funding, said David Osterberg, executive director of the Iowa Policy Project.

The organization has done numerous reports regarding the return on state investments, Osterberg said. The biggest pay-off they've found was funding for community colleges, he said.

"Here is a place where we're paying off many more dollars for every dollar spent and yet the Legislature refuses to put in what it used to be (putting in)," he said.

The report, available at www.iowafiscal.org, found that while state funding for Iowa community colleges rose throughout the 1990s, and recovered from a dip due to the 2001 recession, it has not recovered from the 2007-09 recession. Only stimulus funding from the federal Recovery Act has contributed favorably to community college funding since then.

State funding to Iowa's community college comprised 29.5 percent of college revenues in 2011, compared to 48.8 percent in 1990. Tuition and fees were 57.3 percent of community college revenues in 2011, compared to 32.8 percent in 1990. Local tax revenues were 4.7 percent of community colleges revenues in 2011, a slight decline from 8.2 percent in 1990. Federal dollars make up a small portion of community college revenues, 2.7 percent in 2011.
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