Community Colleges Face Cuts if Congress Doesn’t Help

As Congress debates the stalled COVID-19 relief bill, community colleges across the country are bracing for impending and serious state funding cuts. The only question is how badly the cuts—resulting from decreased tax revenues from the pandemic induced recession—will impact their budgets. Many governors used CARES Act funding to close their higher education budget shortfalls in the spring, but without that funding, substantial cuts are coming. Worse, these cuts will aggravate existing resource inequities between community colleges across the country. That is because in about half of states, local governments provide funding for community colleges, usually supported by property taxes.

Over the late spring and summer, we spoke with community college leaders watching these trends playing out at their institutions. We conducted 20 calls with community colleges, tribal colleges, community college systems, and community college associations across 15 states. These interviews explored how colleges in general—and their non-degree career preparation programs in particular—are faring in the wake of COVID-19. Not surprisingly, the colleges we spoke to are thinking about the coming budget cuts and the uncertainty around resources is itself causing significant stress for community college leaders. As one system leader put it, “We're sort of white knuckling it as we move into this next academic year.” Some colleges have already seen emergency cuts and furloughs, but they know this is only the beginning. The general consensus is that it is going to get much worse.

Without additional federal resources, huge cuts are coming. In fact, we can see how these cuts will work based on how CARES Act funds that flowed to states averted significant cuts to higher education in the spring. For instance, Colorado cut state higher education funding by $493 million—or 58 percent—but all but $43 million of that was made up by CARES Act funding. In Illinois, the current state budget assumes the state will eventually receive $5 billion more in federal relief funds. In Kansas, the governor proposed a $46 million cut but more than half of that—$26 million—was offset by CARES funding. Louisiana cut $122 million and used the $100 million in federal CARES Act funds to keep the actual cut to $22 million. In Michigan, the state cut higher education funding by 11 percent, or $169 million, and then backfilled the cut with an equal amount of CARES Act funding. As the recession continues to worsen, its impact on state budgets will only grow. Without significant federal funds, we will see a disaster at many community colleges who are also struggling with declining enrollments due to the pandemic.

But these cuts will not affect all community colleges the same way. Local governments in states like California, New York, and Texas spend over a billion dollars a year on local funding for community colleges while in states like Georgia, Florida, and Minnesota, colleges have no local funding at all. Our country is split, with community colleges receiving no local funding in almost half of states and the other half with local investment. Some community colleges actually rely very little on state funding to support their revenues. In Arizona, for example, by the time the state cut all operating aid in 2015, the two largest districts—Prima and Maricopa—only relied on the state for four and one percent of their revenue respectively. Because of the nature of this recession, colleges that have access to significant local property tax revenue are less vulnerable to funding shocks. Currently, housing prices are still rising in many areas, providing a cushion for schools in wealthier communities. State budget cuts may still hurt them but they are much less reliant on state funding.

When these cuts hit, it will be at a time when colleges are facing increased costs due to the pandemic. Some have had to invest in greater online infrastructure; others have had to purchase personal protective equipment and sanitation supplies as they attempt socially distanced instruction. This will likely force colleges to make cuts to faculty or important student services, like tutoring and advising. And it could also lead to increases in tuition, making it harder for students to get the education and skills they will need in the face of the recession.

These different funding streams will, like so much resulting from this pandemic, exacerbate inequality, not only for colleges but also for the overwhelmingly low-income students they serve. Even in the states with local funding, a college with a small property tax base that serves a poor, rural area is very vulnerable to state cuts, while colleges in richer suburban areas are much more protected. But it doesn’t have to be this way. If Congress acts and passes more support for higher education, it could, like it did in the spring, forestall these massive budget cuts that will devastate community colleges. And this time Congress should use a more equitable funding formula, one that accounts for the number of students served, not how many classes they take.

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