Colleges Get Reprieve as Congress Approves Aid to States

August 10, 2010

State lawmakers may be able to avoid some painful cuts to their higher-education budgets, thanks to a last-minute reprieve from Congress.

On Tuesday, members of the U.S. House of Representatives took a break from their annual August recess to give final approval to a bill that would provide $16.1-billion in additional Medicaid assistance. While that money will not directly benefit colleges, it will help plug states' budget gaps and avert cuts to other areas, including education. More than half of state legislatures have already approved budgets assuming Congress would come through with the aid.

The House speaker, Rep. Nancy Pelosi, Democrat of California, called members back to Washington for the vote after the U.S. Senate passed the bill last week.

The federal assistance comes as a relief to state college systems, many of which would have suffered substantial cuts if the money had fallen through.

In California, which is expected to receive between $1.2-billion and $1.8-billion under the bill, Gov. Arnold Schwarzenegger said in a speech in June that the money was "critical to preventing deeper pain and deeper job losses" in the state.

"If Congress fails to extend the full amount of Medicaid payments for states, we will have no other choice than to make even more drastic cuts," the Republican governor warned.

On the other side of the country, Maine's public universities were facing an $8.4-million cut if the bill failed, said Rebecca M. Wyke, vice chancellor for finance and administration for the University of Maine system. That would have come on top of an $8-million reduction in state appropriations since the 2008 fiscal year. The system has shed 300 jobs since October 2007, or 6 percent of its work force.

Ms. Wyke said colleges were "relieved we got a break."

"We know it's probably not the end of the troubles we'll have to face, but we're all very thankful Congress has come through with this," she said.

In Pennsylvania, state leaders had warned that they would ask U.S. Secretary of Education Arne Duncan for a waiver from a requirement that states maintain their higher-education budgets to be eligible for federal aid. Now, they're less likely they'll do so, said John C. Cavanaugh, chancellor of the Pennsylvania State System of Higher Education.

Not as Much Help as Expected

Still, most states won't get all the federal help they were counting on. Maine had budgeted for $100-million in Medicaid money but will probably get $77-million. In Pennsylvania, lawmakers were banking on $850-million but are likely to receive closer to $600-million.

California's colleges aren't out of the woods yet, either. While the federal money could help prevent further cuts to higher education, the governor and the State Legislature must still reach agreement on how to restore $610-million that was cut from the budgets of the University of California and California State University systems last year, said Patrick J. Lenz, vice president for budget and capital resources for the UC system.

The governor has proposed cutting other programs, but Democrats in the State Senate and Assembly want to raise taxes and fees instead.

"Will the federal funds be helpful? Absolutely," Mr. Lenz said. "But there's another component to this."

Other state college systems aren't sure when they'll see the emergency aid. In Massachusetts, lawmakers already voted to slash spending on the state's public colleges by 12 percent on the assumption that Congress would not act, and they aren't scheduled to reconvene formally until January. Now, lawmakers and the governor must decide when and how to appropriate the $655-million Massachusetts is expected to receive from Washington.

On Tuesday afternoon, Gov. Deval Patrick told reporters that he'd like to see $75-million of the money go to higher education, according to the State House News Service.