Univ. funding back on the rocks

Tuition hikes could be back in the university's future after the state legislature took away funds designed to go directly to public colleges and universities.

The state senate's Budget and Taxation Committee unanimously voted yesterday to label revenue generated through a corporate tax increase as general funds instead of dedicated higher education funds. Instead, the committee decided to devote part of the slot machine revenue to higher education, effectively hitching university funding to an issue far more controversial than a corporate tax increase.

"This is so inside baseball. It's just intent language," said Patrick J. Hogan, the university's lobbyist. He added that if the bill passes as amended, "it means pretty high tuition, or cuts in enrollment."

The way the legislation reads now, the senate recommends a portion of the corporate tax and slot machine revenue go to higher education. However, unlike the initial bill which ensured education funding, the new language is merely a suggestion, not a legal obligation.

When Gov. Martin O'Malley wrote his proposal to eliminate the state's $1.7 billion deficit, he intended to raise a corporate tax from 7 percent to 8 percent, devoting half of the money to the Higher Education Investment Fund and the other half to the Transportation Trust Fund - providing almost $60 million to each in the next couple of years.

But when the committee discussed proposed amendments to the governor's plan, none of the members voiced opposition to the amendment to alter the corporate tax, and so the schools' guaranteed money slipped away without a fight.

Andrew Friedson, president of the Student Government Association, said the senate committee passed "the opportunity to provide for Maryland families" looking to give their children an affordable education.

"It was very important for the state to brand itself as very dedicated to higher education," he said. "Everybody understands the importance of having an elite education system. But when it comes to putting money toward these institutions ... that commitment went away."

Hogan said many politicians expressed opposition to raising the corporate tax but said they would vote for it only because it was tied to higher education. Senator Nancy King said even lobbyists for local businesses approved of the tax because it would fund universities.

But Edward Kasemeyer, the vice chair of the Budget and Taxation Committee, said the senate still hopes the university will receive sufficient funding, at least from the slot machines, even though it isn't guaranteed.

"We didn't want the mandate without the revenue source. We want to make sure we have slots" before promising slot money to the universities, Kasemeyer said.

Senate President Thomas V. "Mike" Miller said he didn't think the universities' financial future was as dire as Hogan expressed it to be.

"I'm not certain it's happened the way Senator Hogan understood it," Miller said. "We're going to meet again tomorrow morning" to further resolve the issues, he added.

The tax proposal passed in committee with a vote of 9-6. The Senate will likely debate the amended tax proposal today, including the controversial issue of whether to allow voters to choose to legalize slots in Maryland.

Reporter Nathan Cohen contributed to this report. ecksteindbk@gmail.com