Pages tagged "Education"
West Virginia joins states around the country in moving towards free higher education, with SB 284, the free community college bill supported by Governor Justice and Senate President Carmichael. The "WV Invest Grant" program would provide a grant offsetting tuition for eligible students who enroll in one of the state's two year colleges.Read more
This week the Center on Budget and Policy Priorities released a report on the state of K-12 funding since the Great Recession. The main takeaway from the report was that most states are providing less support per student for K-12 now than before the recession, and that some states are still cutting K-12 funding, eight years after the recession. The report surveys budget documents in all 50 states, when data were available.
While pre-recession data for West Virginia weren't available, the report did show that West Virginia had the biggest cut in per-student state K-12 education in the past year, with state formula funding per student falling by 3.3% from 2015 to 2016.
The report notes that the main reasons for state cuts to K-12 after the recession include weak revenues from a slowly growing economy, falling federal aid, and in some states, tax cuts. Cuts to state funding usually create problems for local districts trying to make up the difference. In most states, property values fell sharply after the recession hit, making it difficult for local school districts to raise revenue to offset state spending cuts, and forcing many school districts to scale back services.
However, that's not the case in West Virginia. While West Virginia had the biggest cut in state funding in the past year, it was because school districts have had rapidly growing property tax revenues. To explain why that happened, here's a quick lesson in K-12 funding in West Virginia:
West Virginia's school aid formula determines a base level of funding for each school district, based on factors like enrollment and population density. Once the base level is calculated, the local share is calculated. The local share is determined by school district property tax revenue, with the school current expenses levy applied to all taxable property in each county. A portion of the property tax raised by school districts, the local share, is subtracted from the base level of funding. The difference between the base level and the local share is the amount the state provides to the school districts.
In recent years, property tax revenue in West Virginia has seen substantial growth, due in large part to natural gas drilling activity in the Marcellus Shale. This growth in property tax revenue has affected the school aid formula, increasing the local share, and reducing the state's share, in effect making it appear the state is providing less funding.
For example, in FY15, the school aid formula set the base level of total funding for K-12 at $1.620 billion, with the local share set at $432.6 million and the state's share set at $1.19 billion. For FY16, the base level of funding didn't change much, falling to $1.605 billion, $14.7 million or 0.9% lower than FY15, as enrollment decreased and a number of experienced teachers retired. But the the state and local shares did change. The state's share fell by $40 million or 3.4%, while the local share increased by $23 million or 5.3%. But as mentioned above, the local share calculation is dependent on property tax revenue. And school property tax revenue grew by $52 million in 2015, an increase of 5.0%, after growing by 1.2% the year before.
So unlike in other states, West Virginia hasn't been cutting K-12 funding because of budgetary pressures (it HAS been cutting higher education funding), instead the state's share of K-12 funding through the school aid formula has fallen due to natural-gas-fueled property tax growth.
Last week, the State Senate passed a bill (SB 559) that would except DHHR social workers from the requirement to be licensed by the West Virginia Board of Social Work. According to the West Virginia Department of Health and Human Services, this bill aims to get more people to apply for positions within Child Protective Services (CPS). While CPS has suffered from retention problems and high levels of caseloads, eliminating licensure could put vulnerable children at risk and remove important accountability standards. Furthermore, this proposal neglects to deal with one of the central underlying problems, which is low pay. As former State Senator Donald Cook pointed out about CPS workers: "They're underpaid. They're overworked."
According to the Bureau of Labor Statistics (OES), social workers in West Virginia are paid less than their counterparts in almost every state. In 2013, the average salary for child social workers that worked with children was just $31,700 - ranking last in the country. Mental health and substance abuse social workers where paid even less in West Virginia on average, just $30,300 per year - also ranking last in the nation. While the average salary of healthcare social workers was $42,780 in 2013, this was lower than all but two states.
While it's good that DHHR is concerned about staffing shortages, eliminating accountability standards for social workers is not going to solve the problem and could make employee turnover worse. Let's hope the House makes major changes to the bill and that we take concrete steps in the future to ensure that all DHHR social workers get paid a decent wage for their hard and important work. Instead of a race to the bottom, we need a race to the top. Our children deserve no less.
The WVU Board of Governors announced yesterday that the state's flagship university would be raising its in-state tuition by 8% this year, and by 4% for out-of-state students. The increase amounts to about $500 for in-state students, bringing tuition at WVU to just under $7,000 per year. In addition to tuition, on-campus housing and meal costs are also increasing.
The tuition hike now means that the Promise Scholarship, which once covered full tuition, will now only cover 68% of WVU's annual tuition costs.
Rising tuition isn't good news for West Virginia's workforce. West Virginia already has the lowest levels of educational attainment among its population, and tuition increases aren't going to help. In fact, a 2011 study found that for every $100 added to tuition, enrollment in higher education will fall 0.25%.
WVU's Board of Governors pointed to the recent cuts to higher education, $20 million over the past two years, as the reason for the tuition increase. This isn't the first time, nor will likely be the last time, that the state's budget cuts have led to higher tuition.
Higher education as a whole has seen a $51.8 million cut over the past two years, but state support had been weakening even before the cuts. Even if enrollment remains flat this year, the state will be spending $1,780 less per student in FY 2015 than it did in FY 2008, adjusting for inflation.
And while higher education funding was cut in recent years, it looks unlikely that those cuts will be restored. According to projections in the governor's FY 2015 budget, the state will appropriate less for higher education in FY 2019, than it did in FY 2008. Adjusting for inflation, higher education funding will be down by over $168 million, or 29.4 percent, by FY 2019.
The reason for the cuts to higher ed? The state has enacted a series of expensive tax cuts since 2006, which have cost the state hundreds of millions of dollars over the past several years. Over half were business tax cuts, including the phase-out of the business franchise tax, a reduction in the corporate net income tax rate from 9% to 6.5%, and several other smaller business tax cuts, which will reduce revenue by an estimated $236 million in FY 2015. Altogether, the tax cuts have amounted to $425 million in forgone revenue. And so far, there is no evidence that these tax cuts have produced any of their intended results, other than driving up the costs of higher education.
To put the impact of the tax cuts on the state's budget in context, look back at this post. The revenue lost to the just the business tax cuts would have been enough to provide free tuition to all in-state undergraduate student in West Virginia.
As for what all of this says about our state's priorities, I'll let incoming WVU student government president and former WVCBP intern Chris Nyden have the last word, "When the Legislature cuts funding to higher education, it not only hurts the ability of low-income students to pursue a college degree but it means fewer jobs and a weaker economy. There is no better way to create good-paying jobs, a stronger economy and a better future for West Virginia than investing in higher education. Instead of ineffective and costly tax cuts that are saddling debt on the backs of our future workforce, the state needs to invest in our greatest asset — our students — and create sustainable growth."
A new report from the Center on Budget and Policy Priorities shows that West Virginia is not alone in making cuts to higher education in recent years, but unlike West Virginia, most states are starting to reverse those cuts, as the effects of the recession fade away.
The report shows that after adjusting for inflation, 48 states, including West Virginia, are spending less per student now than they did before the recession, with an average spending cut of 23% per student. West Virginia is spending 21.6% less per student in FY 2014 than in Fy 2008, a reduction of over $1,800.
As a result of these cuts, tuition at public colleges and universities across the country has increased. Average annual tuition at public four-year colleges has increased by 28% since 2008, and has increased 26.3% in West Virginia, after adjusting for inflation. The increase in tuition costs has far outpaced income growth for middle-class families, and has grown even faster than the income of the top 1%. This rapid rise in tuition has increased student loan debt, deterred low-income students from enrolling, and has reduced students' future earnings.
This past year, most states have begun the process of restoring the recession-induced cuts that they have made to higher education. Forty-two states are investing more in higher education this year than they did a year ago, adjusting for inflation, but West Virginia is not one of them. In fact, of the eight states that are continuing the cut higher education, West Virginia has the second-deepest cut this year.
As we've pointed out before, the reason for West Virginia's continued cuts to higher education is due to a lack of revenue. And that lack of revenue is almost entirely self-inflicted from a series of tax cuts, costing the state a total of $425 million this year.
With more tax cuts on the horizon, and no new sources of significant revenue, West Virginia has no future plans to restore the cuts to higher education. Which, if current trends continue, will lead to even higher tuition, more debt, and fewer college graduates in a workforce that already lags far behind.
Last week, we took a look at the total cost of the state's tax cuts of the past few years. According to state officials, cuts to the food tax and business taxes will cost the state $360 million in lost revenue this year, with more than half of the loss coming from the cuts to the corporate net income tax and the elimination of the business franchise tax.
Now if $360 million sounds like a lot, that's because it is. $360 million is nearly 12% of FY 2015's total general revenue, and is nearly as much as we appropriate out of general revenue for the entire Department of Military Affairs and Public Safety, which includes corrections spending.
But there is one really big thing the state could have done with the revenue it gave up through tax cuts. It could have given free tuition to every in-state college student. While free tuition for all of the state's in-state college students sounds expensive, it would actually be cheaper than the tax cuts.
The table below shows the estimated number of in-state undergraduate students at each of the state's higher education bodies, including both four-year and two-year schools, as well as tuition and fees for one academic year for a full-time in-state student.
If the state wanted to, it could pay for full tuition and fees for all of its in-state undergraduate college students for less than $250 million, far less than the $360 million in tax cuts. And, if anything, it would probably cost less than that. First, the $250 million includes federal grants and aid that the students would still be eligible for to help pay their tuition. In addition, the state already pays nearly $30 million per year in PROMISE scholarships, which is included in the total.
The state's budget is all about priorities. By prioritizing our ranking on some "tax climate" index, the state missed out on an opportunity to fundamentally change the composition of its workforce and its future.
As we've said before, one of West Virginia's biggest challenges to creating stronger economic growth and better paying jobs is increasing the number of workers with a college degree. Unfortunately, as Chris pointed out here and here, the state and the federal government are making it increasingly more difficult to attend college by raising the cost of tuition and subsidized loans.
As the chart below highlights, only one in four workers (25.6%) in the Mountain State had a bachelor's degree or higher in 2012. Just five other states - Wyoming, Arkansas, Nevada, Mississippi, and Louisiana - had a smaller share of their workforce with a college degree. As we've shown previously, this is important because states with a high share of their workers with a college degree tend to have higher median wages or better paying jobs. As we know, better paying jobs are the key to better health, a better tax base, better economic mobility, and less crime.
While our state has struggled to transition to the "new economy" - which tends to be geared toward only rewarding those with a college degree - the state has made significant progress in educating its workforce over the past several decades.
In fact - and this may surprise many of you - our state has made more progress in educating its workforce than any other state over the past several decades.
Between 1979 and 2012 the share of West Virginia's workforce with a college degree increased by nearly 200 percent or from 8.7 percent to 25.6 percent. This was the highest increase in college workforce attainment in the country (see chart below). The next closest was Alabama at less than 150 percent.
In 1979, West Virginia ranked dead last in the country with only 8.7 percent of its workforce with a college degree or higher (Arkansas was 49th with 11.1%). What this also shows us is how overly reliant our labor force and state was on jobs that did not require a college degree. While moving from 50th in labor force college attainment to 45th in the nation doesn't seem like substantial progress, it actually is. And we should be proud.
That said, if we want to continue making progress and build a more sustainable and vibrant economy, we will need to make investments in our kids and make it easier for them to attend and pay for college. This starts by ensuring that we have the resources to make it happen and the political will to get it done.
by Chris Nyden
On Tuesday, the West Virginia Higher Education Policy Commission (HEPC) approved an increase in average tuition for West Virginia public college students from $5,687 to $6,067. These increases were partly a result of a $30 million budget cut to higher education in the FY 2014 budget. This is just the second time the budget for higher education has been cut in West Virginia over the past five years, but it represents a national trend where many states have looked to slash spending under harder economic conditions.
This divestment from higher education not only increases costs for students, providing another barrier to attending college, but it also decreases the quality and competitiveness of the degrees at public institutions. This is because governmental budget cuts are a challenge to public higher education not present in the private system. Many of the tuition increases at public schools have been a result of declining state revenues, while tuition increases at private schools typically go toward more services for students.
In fact, over the past three decades, undergraduate tuition at private four-year colleges has increased by 3.5 percent more than the rate inflation on average, compared to 4.4 percent at public four-year colleges. Meanwhile, spending on instruction for students has increased by only 0.75% annually at public schools since 1987 and 1.67% at private schools.
Since 2000, tuition at public colleges in West Virginia has doubled, meanwhile there has not been a similar increase at private institutions. As the chart below shows, tuition at West Virginia public four-year colleges has increased as a share of private tuition since 2000, following a national trend.
So how does this affect students in public colleges?
One of the main effects of losses in revenue is a change in faculty. Because budget cuts make future cash flows unclear and destabilize universities' financial outlooks, colleges are forced to pay their professors less (or give them a heavier teaching load), provide fewer faculty positions, or provide fewer tenure-track positions if they want to prevent shocks to tuition rates. As a result, many colleges are hiring more part-time faculty or non-tenure-track professors. This might not seem like a big problem, as these professors can teach large groups of students and cost colleges less. However, hiring more of these professors leads to decreases in retention and graduation rates among undergraduates. With fewer faculty as intimately involved and interested in their field, as more research-oriented professors are guided into graduate teaching jobs, students also become less interested. In addition, faculty with heavier teaching loads will have less time to give each student adequate individual instruction.
Private institutions also have a better ability to hold onto their best professors. There are substantial gaps in wages between professors at public and private colleges, with the average professor at a public college making over $29,000 less than their private college counterparts. These higher salaries give private institutions the ability to attract better professors.
Proponents of private education may argue that this is a phenomenon just now occurring at public colleges, but has been the precedent market forces set long ago at private colleges. Private colleges have traditionally offered fewer tenured positions and used more part-time faculty. But this is why public higher education is so important. It gives young people the opportunity to receive a high-quality education without as much of a cost barrier as many private colleges.
Budget cuts to higher education are not only pricing students out of a college education, they're resulting in an inferior product for many West Virginia students.
by Christopher Nyden, Research Associate
Barring another last-minute agreement, the interest rates on subsidized Stafford student loans are set to double from 3.4 percent to 6.8 percent on July 1. These loans are offered to students who depend on them to attend college.
Doubling rates will significantly increase the debt burden for West Virginia college graduates. As the chart below shows, the average debt of a graduate of a West Virginia four-year public college is now over $25,000 – surpassing the national average of $23,065 – and has grown by over $10,000 since 2004.
College Loan Debt for West Virginia Students Higher than National Average
A Center for American Progress (CAP) report estimates the rate hike will cost the average recipient in West Virginia $824 over the life of his or her loan. Statewide, this number is over $55 million.
Last year, the United States Public Interest Research Group (U.S. PIRG) analyzed how many West Virginia students this would affect. According to its report, approximately 60,000 students and 49 percent of Stafford loans would be affected by the rate changes immediately.
Further exacerbating this problem are state budget constraints already placing more burden on students at West Virginia colleges, a topic previously covered by Sean.
These constraints likely mean students will have to take even more out in loans, which makes estimates like those from CAP conservative. Costs will likely rise because more students will need subsidized loans, while others will take more money out per loan.
There are several proposals currently in Congress to solve the student loan dilemma. Libby Nelson of Inside Higher Ed has a convenient table of all these bills.
President Obama's proposal would actually drop the subsidized Stafford rate to 3.09 percent, easing the interest payments on many West Virginia college students. The Senate Democrats' proposal, co-sponsored by Senator Rockefeller, would drop subsidized rates even further to approximately 2.04 percent. However, this rate is variable over time because it is tied to the three-month Treasury rate. Both of these proposals could save many West Virginia students from even more debt.
Piling more debt on the backs of West Virginia college graduates makes little sense, given that the state ranks last in the United States in the number of workers with a college degree. It does not make any more sense around the country where businesses are demanding an educated workforce.
Amidst these budget cuts and doubling interest rates on loans for college students, it is important to reframe these policies and look at their effects. If our state is going to thrive and advance in this new economy, we need to invest more in higher education, not less.
Back when we released our report on the FY 2013 budget, we warned that the budget cuts targeting higher education would likely lead to higher tuition, making a college education even less affordable. And it didn't take long for our prediction to come true, as this week New River Community and Technical College and Marshall University both announced plans to raise tuition in reaction to the cuts in the FY 2013 budget.
While the $34.8 million in higher education budget cuts have been cited as the reason for these recent tuition hikes, state support for higher education has been on a downward trend for several years now. As this post showed, state appropriations per full time student fell 29% between 2002 and 2011.
At the same time, tuition at institutions across the state have been on the rise.
Not only is tuition growing as state support erodes, tuition is also growing faster than income for West Virginians. Average tuition costs as a percent of median household income in West Virginia has risen from 9.6% in 2002 to 12.3% in 2011.
While some state officials would like to blame Medicaid on the current budget crunch, leading to the squeezing of higher education, a far bigger culprit is the continuing business tax cuts, which cost the state nearly $200 million in revenue each year. And the end result of these tax cuts is a hidden tax on students. As we've seen so far, the business tax cuts have been paid for by college students and their families.
Rising tuition brought on by budget cuts will likely contribute to West Virginia's growing student loan problem. Nationwide, student loans are the fastest growing source of consumer debt, and now total nearly $1 trillion nationwide. And paying back student loans is becoming quite the challenge, particularly in West Virginia, which has the highest student loan delinquency rate in the country.