Colorado is one of the states considering higher education appropriations that would be directed to ... [+]
As governors begin to propose revised budgets for the current year and submit their recommendations for the upcoming Fiscal Year 2024, one trend is emerging on the higher education front - a strategy to direct new funding to a small number of college programs that meet critical workforce needs.
While the traditional higher education appropriation model has been to base new and recurring funding on metrics like enrollments or institutional outcomes, this more targeted approach involves directing state dollars to specific academic programs - or to students enrolled in those programs - that have been identified as key to a better prepared workforce and a state’s economic competitiveness.
These focused investments are intended to remedy statewide worker shortages in critical sectors of the economy, which many economists believe could have the additional benefit of reducing inflationary pressures.
Although it’s not a completely new approach - Missouri and Washington are examples of states that have done specific college program funding before - it may grow to be a more popular tool for addressing what continues to be one of the pandemic’s lingering effects - a very tight market for skilled labor.
Here are three examples.
Colorado
In Colorado, Governor Jared Polis has proposed a new package in his FY 23 supplemental budget that includes $70 million in general fund dollars to boost the number of Colorado residents earning high-demand, high-wage credentials. Under the proposal, the state would provide funding for free postsecondary education in high-demand areas of the workforce such as early childhood, education, law enforcement, fire and forestry, construction trades, advanced manufacturing and nursing jobs, as well as funding to expand nursing programs in community colleges.
In addition, the proposed fund would also support students during and after high school with scholarships for higher education and apprenticeships.
North Dakota
North Dakota Governor Doug Burgum’s 2023-25 Executive Budget includes more than $150 million in various investment to address the state’s workforce shortage. Included in that amount is a $10 million Workforce Innovation Grant program that would go to higher education institutions that create new programs or alter existing ones based on urgent workforce needs.
Like many states, North Dakota enjoys a strong budget position with hundreds of millions of dollars available for new investments. Burgum’s proposed budget represents a 8.9% increase compared with the original 2021-23 total budget.
“Our strategy-driven executive budget leverages investments in infrastructure, community and economic development for the future and reduces taxes for workers while tackling our No. 1 barrier to economic growth, our workforce challenge,” Burgum said.
Iowa
In Iowa, legislators are considering reviving a plan from last year that would provide scholarships to college students who major in high-demand fields and then remain in the state and take jobs in those areas. Although last year’s effort did not make it across the finish line, it looks like lawmakers may take a second run at it this year.
“When it comes to education funding, quite frankly, I think it's time for us to take a look at how we fund the regent institutions,” said House Speaker Pat Grassley, R-New Hartford. “We're not opposed to providing more funding into that area of the budget. But we feel we have to get a return from the standpoint of helping fill these high-demand fields in which there’s needs all across the state.”
According to reporting in the Cedar Rapids Gazette, the Iowa Board of Regents, which is the governing body for Iowa’s three public universities - the University of Iowa, Iowa State University and Northern Iowa University - has requested $34.7 million more in education appropriations for the upcoming year.
The proposal to target new appropriations to high-demand fields faces an uncertain future in the Iowa legislature. While Republicans expressed support for using taxpayer dollars for select investments, Democrats appeared less enthusiastic, criticizing the concept as too narrow and short-sighted.
Rep. Jennifer Konfrst, D-Windsor Heights said, “The regent institutions are there to truly teach and educate future leaders in our state. And I think that what you'll find is the jobs that are in demand now might not be in demand in five years, or vice versa. So let's not cut the regents off at the knees and say you can only get your funding if you're teaching people how to do this job.”
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Over the next six weeks, most governors will introduce their new budget proposals. Many states are flush with cash, with several projecting record surpluses. How those funds will be spent for higher education will constitute - as they always do - a major budget issue in state capitals.
While colleges and universities will be competing - as they always do - with other state priorities like affordable housing, k-12 education, public safety, and behavioral and medical healthcare, this year is also likely to see a healthy debate about the extent to which higher ed appropriations will be tied to specific high-demand programs.
