Tuition freeze is looking unlikely after senators approve $6.8M higher education cuts

Next year's proposed tuition freeze is looking less likely, as state lawmakers are worrying about the lagging economy and awaiting a new report estimating this year's state tax revenue.

A state Senate subcommittee Friday approved over $80 million in total cuts from the governor's proposed budget, including $6.8 million in cuts to the University System of Maryland, which includes the state's 13 universities and research institutions.

The subcommittee looked at recommendations from the Department of Legislative Services, a non-partisan analysis agency, as well as the system's response to those recommendations, before making its decisions.

Decisions are far from final, but the subcommittee voted for the following changes:

n More than $10.5 million of the system's unrestricted funds will be held until each institution can prove its student enrollment is growing at a healthy rate. Institutions that meet their goals will be given their portion of this money, and those that don't might see some of their money go elsewhere in the system.

n Nearly $6.8 million in unrestricted funds will be cut from the system budget, and the cuts must be distributed fairly among all the system institutions. The system will be required to spend at least 4 percent more on each student than it did last year.

n $15 million will be cut from the system's allotment of general fund money. In its place, the system will be allowed to take $15 million from the Higher Education Investment Fund, created last year to set money aside for higher education and supplement state funding when needed.

State officials expect that there will be nearly $15.4 million in the HEIF at the end of this fiscal year, so the subcommittee effectively voted to drain the savings account. When Gov. Martin O'Malley released his budget in January, he proposed using HEIF money to freeze tuition next year and possibly the following year, as well. So even if the General Assembly adequately funds the system this year, next year's safety net is gone.

Sen. Rich Madaleno (D-Montgomery), the subcommittee's vice chairman, said there was some hesitation among the senators to take money out of HEIF, but he said it didn't make sense to keep $15 million sitting around when the economy is so slow right now.

"There's real mixed emotion about it," Madaleno said. "I value higher education and the important role it plays in helping to build our economic prosperity. However, I recognize that we face an uncertain economic outlook."

Madaleno said spending the HEIF money now rather than saving it for later makes sense in the long run. He noted the importance of "keeping higher education off the funding roller coaster" it has been on for about a decade. He said if the state moderates spending during good economic times, cuts when money is scarce won't seem so severe.

He added that the $6.8 million cuts are "small and prudent reductions" that wouldn't lead to a big tuition hike. He estimated that the system might need to raise tuition about 1 percent to compensate for the budget cuts.

The Board of Revenue Estimates will release its newest report later this week; provide a better explanation of how much money the state will bring in through taxes and, therefore, how much money the state can spend. Madaleno said many senators believe the estimates will show a lower revenue than previously predicted, and if that's the case, they might need to cut more from the budget.

System Chancellor Brit Kirwan said he is always disappointed when the system budget gets cut, but he said the process is far from over and he will continue to lobby for full funding.

"I think the Senate is trying very hard to help higher education and mitigate any harm to higher education," Kirwan said. "That they want to replace [general fund] cuts with what's left of the Higher Education Investment Fund says a lot about their support."

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