UM study sees tuition cap as 'devastating'
BYLINE: Terry Ganey, Columbia Daily Tribune, Mo.
May 6--Legislation that caps the University of Missouri's ability to raise tuition would have a "devastating" effect on the institution's operations if the state cuts back on higher education funding again. That's one conclusion of a financial analysis of the legislation prepared by Nikki Krawitz, UM's vice president for finance, and her staff. The review was requested by state Rep. Judy Baker, D-Columbia.
A wide-ranging higher education bill scheduled for debate in the House this week would, among other things, limit tuition increases at public universities to the growth of the consumer price index. Universities that increase tuition above inflation could be penalized by as much as 5 percent of their state appropriations.
"If the University of Missouri tuition had had a CPI cap during the years since state support was reduced, it would have had an estimated $300 million less in tuition revenue at a time when the cumulative reductions in state support were $255 million," the analysis said. "This would have had devastating effects on the university's ability to support a 15 percent increase in enrollment, a change in mission to support economic development and a significant increase in externally funded grants and contracts."
The analysis also found that the amount of money available for state appropriations for public universities will be reduced because the bill pours more money into the new "Access Missouri" scholarship program for students attending private colleges and universities.
About $45 million in additional funding will be appropriated for the new scholarship program, with about $24 million, or about 53.6 percent, going to students attending private institutions.
"By deflecting funding from institutions to students, we are in fact shifting funding from public institutions to private institutions," the analysis said. It added that if half of the $45 million was used to increase state support for public higher education, the amount of this year's increase would be 7 percent compared with 4.2 percent.
At that pace, the review added, public colleges would be able to return much sooner to their 2001 high-water mark of state funding.
Under the bill, students who attend private higher education institutions are eligible for more money from the Access Missouri scholarship program than public university students -- $4,600 per year, compared to $2,150 for public university students.
At the same time, private universities are ineligible for any funds that would be delivered through another component of the bill -- the sale of student loan assets to pay for construction of buildings on college campuses. Although the student loan assets were generated with the help of private school students' debt repayments, none of the loan sale proceeds would be used for capital improvement projects on private campuses.
Gov. Matt Blunt wants to spend $350 million from the student loan asset sale on new and refurbished buildings on public college campuses. University of Missouri-Columbia projects that were in the bill's earlier versions -- $85 million for a Health Sciences Center, $2 million for a business incubator and $31.2 million for a new Ellis Fischel Cancer Center -- have since been cut from the plan.
Baker plans to distribute the financial analysis to other House members before this week's debate. The bill has already passed in the Senate, where a parliamentary procedure was used to force the issue to a vote.
"This analysis should have been brought up earlier in the process and discussed," Baker said. "The financial impact has not had a true open discussion."
Stephen Knorr, UM's vice president for government relations, said he doubted that any amendments would be attached to the bill, which if passed would be whisked to Blunt's desk. Knorr suspects Baker won't get much time to discuss the UM analysis.
"I think they've set a two-hour time limit on the debate," Knorr said. "Our anticipation is that it will move through the House quickly without change."
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