Despite big rhetoric on all sides, Andrew Cuomo’s budget priorities bow to economic realities

New York governor Andrew Cuomo’s relationship with colleges and universities in his state has not been one of wine and roses, despite — and often because of — the much-trumpeted free public tuition program he launched last year.

The program, the Excelsior Scholarship, was received as an initiative with significant caveats that still has the potential to be a boon for public colleges and many low- and middle-income students in the state. Cuomo, a Democrat, has attempted to emphasize its importance, using it on the way to positioning himself as a progressive leader fighting against Donald Trump’s vision of America, a leader who has fulfilled the dreams of Vermont senator Bernie Sanders by bringing tuition-free college to one of the country’s most populous and important states.

But a detailed look at Cuomo’s recent actions reveals a more complex picture of a governor who has had to make realpolitik policy trade-offs and accept economic constraints when it comes to higher ed. The constraints include a sizable state budget shortfall estimated at $4.4 billion for the upcoming year. The trade-offs frustrate higher education advocates.

In his latest budget proposal, the governor calls for eliminating Bundy Aid, a relatively small but long-running program that sends funding to private colleges based on their ability to graduate students with degrees. Late last year, Cuomo vetoed a maintenance-of-effort bill that would have expanded funding for rising costs at the state’s two public university systems, the State University of New York and the City University of New York. Many experts on public higher education finance have said that free tuition without consistent state funding of the type required by the bill is a recipe for eroding the quality of public colleges. At the time, Cuomo also angered New York’s for-profit sector by vetoing a bill that would have allowed for-profit institutions to take part in a state student aid program.

Cuomo’s approach to higher ed can be called disruptive, fearless and, depending on your perspective, reckless. Still, he can’t reasonably be labeled a consistent thorn in all colleges’ sides or their one true savior.

“I definitely think there’s a fair question of whether the dollars behind these proposals match the scale of what people imagine,” said Judith Scott-Clayton, an associate professor of economics and education at Teachers College, Columbia University. “It is very reasonable to look at the numbers as an expression of the priorities.”

Bemoaning Bundy Cuts

One section of Cuomo’s most recent executive budget proposal, which was released last month, makes private colleges in the state seem like a low priority. The budget calls for discontinuing the $35.1 million Bundy Aid program and moving funds into a new $30 million round of the state’s Higher Education Capital Matching Grants program. That grants program had been funded at $30 million per year in recent years until being zeroed out last year.

Bundy Aid is unrestricted financial support flowing to more than 100 private institutions, according to the budget proposal. It represents 0.1 percent of revenue for eligible colleges on average, and redirecting it would allow the funding to have more impact, the budget argues.

Private colleges push back on the idea that Bundy Aid is an unimportant program with little impact. Terri Standish-Kuon is the vice president for public affairs at the Commission on Independent Colleges and Universities, the association advocating for private, nonprofit institutions in New York.

“For some schools, particularly those with very modest endowments, Bundy can represent the kind of consistent support to the operating budget that would be a return on an endowment that they do not have,” she said. “It’s consistent and it’s predictable, and it does contribute to the enterprise in a way that takes pressure off of tuition.”

By and large, colleges and universities put Bundy Aid toward student support programs or programs supporting the student experience, she added. Since it awards funding based on degree production, some have argued it contributes to the completion agenda.

The program’s level of funding has been curtailed significantly over the years. But the idea of eliminating Bundy Aid may also represent a larger betrayal in the eyes of New York’s private colleges. The program’s origins can be traced back five decades to a time when the state’s public university systems were still relatively new and when some worried about the future of the New York’s considerable private college sector.

Fast-forward back to today, and many tuition-dependent private colleges in New York have been voicing heightened fears for their future after Cuomo brought free tuition to New York’s public institutions. Many private institutions that are discounting tuition heavily in order to attract students wonder how they can compete with public universities suddenly dangling a tuition price tag of zero. Early indicators showed many experienced enrollment declines among in-state students. While New York State has a number of well-known private colleges that recruit internationally, many of its colleges overwhelmingly enroll students from within the state.

New York created a new Enhanced Tuition Awards program for private colleges as a companion to the Excelsior Scholarship. The new awards allow some students to receive up to $6,000 but came with the same controversial family-income restrictions, work and residency requirements, and course-load requirements as Excelsior. They also mandate participating institutions to match government awards, which some private presidents criticized as a financial strain.

Excelsior and Funding Questions

For all the criticism private colleges lob at Excelsior, there are questions about how far-reaching that program actually is — and what will be its long-term effect on public institutions. Excelsior is ramping up over three years. In its first year, it was available for SUNY and CUNY students from families making up to $100,000 per year.

Next fall the income limit will increase to $110,000, and it will rise again to $125,000 the following year. The program is structured on a last-dollar basis, meaning it provides money after students receive other sources of tuition assistance. It requires students to complete 30 credits a year, and students are generally required to live and work in the state for several years after graduating or pay back their scholarships.

Cuomo’s office recently announced Excelsior boosted applications and full-time enrollment at SUNY and CUNY. Unique applications received for SUNY’s state-operated campuses jumped 9 percent from 2016 for the period ending Dec. 22, 2017. The number of full-time freshmen taking 15 credits or more rose by 11 percent compared to fall of 2016. First-year CUNY applications rose 11 percent in a similar comparison, while the number of full-time freshmen taking at least 15 credits increased by 39 percent.

The statistics on students taking 15 credits or more are significant. When Cuomo predicted that Excelsior would encourage more students to enroll full-time — increasing their odds of completion — critics said part-time students often can’t take that many credits because of work or family commitments, or don’t want to do so. Despite those doubts, the program does in fact appear to be shifting student behavior.

Cuomo’s budget proposal includes $118 million to support free tuition for an estimated 27,000 students in the upcoming year. But Excelsior makes public institutions more reliant on state dollars, something that could be a problem if enrollment swells in future years and state aid doesn’t keep up.

“The systems are in the awkward position of saying, ‘We can handle this volume, this increased volume, but we think there are a range of services that exist and capital needs that will be required over time,’” said Deborah J. Glick, a Democrat who chairs the New York State Assembly’s committee on higher education.

“We all know that tuition doesn’t cover the cost of educating a student,” she said. “It is not a long-term sustainable model without additional state support.”

Cuomo has proposed increasing state support for both SUNY and CUNY four-year colleges for the upcoming year. His budget proposal calls for SUNY campuses to receive $2.95 billion from the general fund, up 0.4 percent. It calls for $1.32 billion for CUNY senior colleges, up 2.9 percent.

Those proposals are below what SUNY and CUNY had requested. SUNY asked for about $3.2 billion. CUNY requested about $1.4 billion. Also of note is that Cuomo proposes cutting $18 million, or 2.4 percent, from community college funding, largely because of a decline in enrollment at two-year SUNY colleges.

The numbers reflect priorities, but they also reflect political realities of a New York government where the Legislature tends to increase funding for higher ed over the level the governor recommends. A relatively low executive budget request for SUNY and CUNY is fairly common in New York.

An “unwelcome dance” takes place every year, Glick said. The governor proposes cuts for some programs the Legislature champions, and the Legislature proceeds to negotiate additional funding for those programs.

Higher ed advocates are concerned about funding as a whole and the structure of funding received. They pointed out that the governor’s budget proposal has not added a new maintenance-of-effort provision for state higher ed. Cuomo vetoed a bill in December that would have added to existing law so that the state would have had to pick up several types of rising costs.

That veto drew rebukes from some observers, such as the editorial board at the Times-Union in Albany, which wrote that less than a year after launching Excelsior, Cuomo had “undermined the very university system students would attend.” Advocates like the New York Public Interest Research Group also decried it.

NYPIRG remains concerned about funding levels Cuomo proposed, according to Emily Skydel, the organization’s higher education coordinator.

“There are slight increases in funding in their operating budgets, but not enough to meet the needs of students,” she said.

Colleges and universities have to curtail course offerings when they don’t receive enough funding, Skydel said. That prevents students from graduating on time, confounding one of the Excelsior program’s goals.

“I know students have really been making the connection between the hypocrisy of free college and free tuition at an institution that is not provided the resources to meet the standards that are being proposed,” Skydel said.

The SUNY Student Assembly has also been critical of Cuomo’s budget proposal, putting out a statement saying New York’s budget should not be balanced on the backs of students. A spokesman, Arthur Ramsay, said in an interview that there are large gaps in the governor’s proposed budget, including overall funding levels and continuing to fund community colleges on a per-student basis.

“One thing students wanted was to really increase the amount of base funding for community colleges,” he said. “What the governor’s office has done in their executive budget proposal is continue the base operating need per student, and they’ve kept a lot of things that SUNY hopes to be increased flat.”

SUNY has long advocated for a change to the per-student funding model at community colleges. Chancellor Kristina Johnson testified last month that the model does not provide enough resources to allow campuses to support and retain students. The system requested a different formula that would cost an additional $24 million this year over the governor’s proposed budget.

“We realize that this one-year implementation is an extremely heavy lift in a difficult year, but the importance of the request to look at state funding for SUNY community colleges cannot be overstated,” Johnson said. “If our community colleges are meant to continue to be the innovative producers of the educated work force that New York State needs, stability, predictability and investment should be on the forefront of our efforts.”

‘Unwavering’ Commitment to Higher Education

The governor’s backers retort that the state has increased per-student aid for community colleges every year for six straight years. Total state support for SUNY has gone up by 26 percent, or about $1 billion, since 2012, they say. Total state support for CUNY has gone up by 25 percent, or $460 million.

They have answers to other criticisms as well, arguing New York provides more money to private colleges than any state in the country other than Texas. Shifting Bundy Aid to the matching capital grants program is a better way to leverage taxpayer dollars, said a spokesperson, Abbey Fashouer, in an email.

“By shifting funds from Bundy Aid to [Higher Education Capital Matching Grants], this year’s budget makes state aid more impactful for private colleges, supporting their strategic investments and ensuring that state funding reaches as many students as possible,” she said. “Governor Cuomo will continue to work with private and public institutions to make college affordable and ensure cost is never an impediment to educational opportunity. To that end, this year the governor has proposed nearly $23 million for the Enhanced Tuition Award, enabling more students at private colleges to receive financial assistance to complete their degree.”

The governor’s office has also pointed to him championing programs like a plan limiting the rate of tuition increases at SUNY and CUNY and a loan forgiveness program.

On the issue of maintenance of effort, the governor has argued he rejected the bill in December — along with some other higher ed-related legislation — because it was passed outside of the budget process and could cost the state a significant amount of money in unplanned expenses.

“My commitment to funding education at all levels is unwavering,” he wrote in a veto message. “Collectively, however, these bills would add hundreds of millions of dollars in increased and unbudgeted costs to the state’s financial plan, which will ultimately be shouldered by the state’s taxpayers. Such education funding decisions, both in terms of revenues available and appropriations to be expended, have always been, and should continue to be, addressed in the context of the annual budget negotiations.”

Also among the bills vetoed was one that would have made students enrolled at for-profit colleges eligible for the Enhanced Tuition Awards program. That move drew criticism from the for-profit trade group the Association of Proprietary Colleges, which argued Cuomo “turned his back” on a diverse group of students attending its member institutions. But the veto also drew praise from the Century Foundation, which worked to defeat the legislation.

“To put it plainly: this was a bill straight out of Betsy DeVos’ playbook for subsidizing and deregulating for-profit colleges,” said Yan Cao, a Century Foundation fellow, in a statement at the time. “Governor Cuomo’s veto sends a strong message that New York will defend students, protect taxpayers and demand quality education.”

It’s also worth noting that Cuomo has overseen a state that has increased educational appropriations per full-time student in recent years. The state provides slightly more in appropriations per full-time equivalent when compared to the U.S. average, according to research by the State Higher Education Executive Officers association. Its appropriations per student rose by 4 percent between 2011 and 2016, climbing back to levels seen in 2008, before the Great Recession.

Public higher ed leaders haven’t been openly critical about Cuomo’s budget proposal this year, either. CUNY chancellor James B. Milliken said the proposed budget moves the state closer to a future where all low- and middle-income residents can access higher education at no cost.

“We applaud the important increased investment in CUNY’s operations, as well as the continued commitment to critical maintenance,” he said in a statement.

Cuomo’s latest budget proposal also includes some high-profile priorities, including making undocumented students eligible for forms of state aid like the Excelsior Scholarship and requiring food pantries at all SUNY and CUNY campuses. But some groups have decried cuts and changes to other areas impacting state systems and students, including hospitals, mental health services and so-called opportunity programs, like child-care options.

It’s impossible to tease out how the governor’s proposals will affect the state’s higher ed landscape after the Legislature has its say on them.

“I don’t know how this shakes out this year or next year,” said Scott-Clayton, of Teachers College. “But if resources per student are not changing or potentially are even falling, I would say that’s still a concern. The new policies, if they don’t fix that, they’re not addressing the core constraints.”

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