Advocates optimistic for higher education investment fund bill

ANNAPOLIS – A bill that would cover the cost of future tuition increases got a boost last week from the governor and the top two members of the Maryland General Assembly, giving hope to supporters that it’ll pass by the end of the legislative session in April.

At a Friday press conference, Gov. Martin O’Malley and others touted the Tuition Stabilization Trust Account bill as essential to keeping tuition costs down. The governor’s budget includes a 3 percent tuition increase for university system institutions next year.

“By providing additional stabilization guarantees for tuition in the future, families can better prepare for the costs of higher education, preventing the types of peaks and valleys that volatile economic times can create,” O’Malley said.

With O’Malley, Speaker of the House Michael Busch (D-Anne Arundel) and Senate President Mike Miller (D-Calvert and Prince George’s) attempting to rally support, the bill should have a better chance of survival, said Sarah Elfreth, the student representative on the university system’s Board of Regents. But a January recommendation from the Department of Legislative Services that the bill be abandoned “didn’t help,” she said.

“Everything is still up in the air,” Elfreth said. “I’d say it’s about a 50-50 chance. At its heart, the legislature is very supportive of the concept. It’s O’Malley’s bill, but at the same time, anything with a [funding increase] is getting scrutinized tenfold.”

The Tuition Stabilization bill introduced by O’Malley in January would take a portion of the Higher Education Investment Fund and put it toward warding off future tuition hikes. The bill would also reauthorize the fund, which comes from a corporate income tax and provides about $40 million a year to university system institutions.

The Higher Education Investment Fund, which has only been in existence for three years, will sunset this summer unless the bill passes. Although, according to the DLS report, if the fund were to expire, the shortfall would likely be covered by general funds.

The bill also stipulates that tuition should not increase more than the average family’s income over a three-year period.

The Department of Legislative Services, a group of non-partisan policy analysts for the General Assembly, recommended against the bill in January, saying the money was too unstable to count on when the economy sours. For example, the fund was estimated to contribute $53.5 million to the university system in the 2008-2009 academic year, but only contributed $46.4 million because of the declining corporate revenue it’s based on.

“HEIF was not intended to be the sole source of revenue for higher education, but the institutions do set budgets based on the projections,” the report states. “When money does not materialize, programs and services suffer. The corporate income tax revenue’s recent history has been volatile, demonstrating the risk of tying budgets to unstable revenue sources.”

Sen. Jim Rosapepe (D-Anne Arundel and Prince George’s) pooh-poohed the impact of DLS’s report.

“The governor and speaker of the house and senate president are much more influential,” Rosapepe said. “They’re the elected officials. Generally, [DLS recommendations] don’t make any difference.”

Student Government Association President Steve Glickman was less optimistic.

“We have to deal with the reality as well as what our goals are,” Glickman said last month. “The reality of mandating funding for higher education in this economic year is just not going to happen.”

Yesterday, Glickman said it’s possible the bill will pass, but it would be “challenging.”

O’Malley, who is facing reelection in the fall, has made support of higher education a key part of his campaign. After former Gov. Bob Ehrlich raised tuition by 40 percent in three years, O’Malley kept in-state tuition frozen for four.

“We’ve been swinging between the pendulum of major increases and years of tuition freeze,” O’Malley said. “We’re trying now to find a moderate balance and move forward.”

Senior staff writer Ben Slivnick contributed to this report. cwells@umdbk.com