Community Colleges Warn Against Cutting Their Funding Amid Rebound

With many states in a fiscal squeeze, the favorite target for cost-cutting has been higher education. But with
a recovery on its way, some are wondering: Is that wise?

By RUSSELL GOLD
Staff Reporter of THE WALL STREET JOURNAL

College and economic-development officials warn that cutting state funds for higher
education — particularly community colleges — could slow economic recovery by making
it more difficult to retrain layoff victims and provide skilled workers to fast-growing
industries.

Of the 43 states that either cut overall spending or raised additional revenue through
methods such as tapping reserves in the past year, 29 states cut higher-education
spending, according to a survey this month by the Denver-based National Conference of
State Legislatures. This was the most popular means of closing budget gaps, ahead of measures such as
tapping reserve funds. What’s more, 11 states expect to cut spending on higher education further in the next
fiscal year, which begins July 1 for most states, the survey said.

While state budget cuts were fairly widespread, some of the
steepest cuts came in the Midwest and Southeast, which had
manufacturing layoffs, as well as states such as Colorado where
steep drops in personal-income taxes wreaked havoc with state
revenue forecasts.

The cutbacks couldn’t have come at a worse time for community colleges, which already were straining to
meet demand that traditionally increases during downturns as unemployed workers seek new job skills. "We
have a saying that when the farm is going down the drain, the last thing you do is eat the seed corn" needed
to plant next year’s crops, says Bettsey Barhorst, president of Hawkeye Community College in Waterloo,
Iowa. "We are the seed corn. If you want to build the economy, you need workers and we train the workers."

Hawkeye, like many community colleges across the country, has raised tuition and shelved classes
because of a 3.7% cut in state funds for the current fiscal year ended June 30. It plans to operate only four
days a week to save on air-conditioning costs during the summer. Ms. Barhorst dreads attending local
chamber of commerce events because employers pester her with questions about when Hawkeye will begin
promised two-year degree programs in building construction, aircraft mechanics and piloting. The courses,
designed to funnel needed labor to some of the region’s most vibrant businesses, have been postponed
indefinitely because of budget cuts.

Higher education has been an easy target for budget cutters
because many states are forced — either through their
constitution, court rulings or political pressure — to maintain
funding for K-12 public schools, prisons and Medicaid, which eat up most state operating
expenses. Higher education, which typically accounts for 12% of those expenses, is one of the
few large discretionary budget items. And higher education has a way to partially offset cuts by
raising tuition.

Though most states are slashing spending for four-year universities more deeply, community
colleges have less of a cushion to absorb the blow to their budgets. Without federal research
grants or access to private donations, community colleges have little choice but to raise tuition
to make up for lost state dollars. And that may squeeze out lower-income students that
traditionally have relied on community colleges to upgrade job skills.

There’s also a trickle-down effect: As four-year schools have raised tuition (Iowa State
University tuition will be up 19.5% this fall) and cut back admissions, more students once
bound for universities are starting their studies at community colleges, which typically have much-lower tuition than four-year schools. As these
students fill up more desks, there are fewer resources left to provide training to workers who are seeking to upgrade their skills through two-year
degrees or short-term training programs.

At Des Moines Area Community College, President David England says there are more students from wealthier neighborhoods in the past year
who are taking their first two years of courses there before transferring to a university. Laying off adjunct professors and trimming course
offerings didn’t forestall a 7% tuition increase last fall and another increase is likely this fall. "I’m afraid we’ve priced the people we most need to
reach right out of the market," he says.

Still, the Des Moines school’s increase was among the lowest of the state’s 15 community colleges, where tuition on average rose $225, or
11.6%, to $2,162 per year.

To reach out to students who are being priced out of college, Mr. England is trying a creative solution. This fall, he expects to offer half-priced
tuition for students who take classes during the underutilized afternoon hours. He hopes to offer classes in information technology, where
workers are in high demand, as well as basic writing and math.

This trend could hamper Iowa’s effort to attract new industry by upgrading the skills of its work force, worries Harvey Siegelman, an associate
economics professor at Drake University in Des Moines who retired in 2001 after serving for two decades as the state economist. He says Iowa
has a "chronic" problem: too many slow-growth, mature industries and too few fast-growing firms investing in facilities and research. "We have
to pursue putting people to work more profitably by raising wage levels and you do that by raising skills."

Meanwhile, in North Carolina, the recession and layoffs in industries such as textiles and furniture have combined to drive up community-college
enrollment while at the same time creating a state fiscal crunch. As a result, community colleges had to give back 3% of their funding in
October, even as enrollment in skills-development courses was up 19%. And for next fiscal year, beginning July 1, Kennon Briggs, vice
president of finance at the North Carolina Community College System Office, has asked the presidents of the state’s 58 community colleges to
prepare for budget cuts that are expected to range from 4% to 10%.

"At 4%, we’ll have to cap our enrollment at exactly what it was this year," says K. Ray Bailey, president of Asheville-Buncombe Technical
Community College in the western part of the state. "At every% beyond that, we are going to cut programs and/or classes. When you get to
10%, you have bled all over everything."

Capping enrollment could lock out workers like Edna Crowe. In March, she lost her job as a blanket folder when Beacon Manufacturing Corp.’s
textile mill in nearby Swannanoa closed, laying off 320 people. It was "devastating," the 44-year-old says. The state has lost 77,700 textile jobs
since 1995, and she knew there wasn’t much demand for her skills.

So she attended a presentation by Asheville-Buncombe Technical about training for growing industries and available financial aid. This week,
she began a five-week course for a certified nursing-assistant certificate. She hopes to get a job at a local long-term care facility. The school
"opened up doors that we didn’t even know were there," says Ms. Crowe.

Curtailing programs also could be a problem for local businesses such as Mission St. Joseph Health System, which hires about 300 of the
college’s graduates a year, from nurses to medical stenographers. The college "is our most critical supply partner," says Chief Executive Bob
Burgin. "If they are unable to educate the people we need, it will throw us into a significant supply problem."

Write to Russell Gold at [email protected]

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