When economic times get tough and state revenues decline in West Virginia, higher education funding is often the first thing to be cut in the state budget. This is counterintuitive for a state looking to grow and diversify its economy. Investments in higher education lower tuition costs for students, reduce student debt origination, lead to more collegiate and post-collegiate attainment, and increase economic outcomes like credit score and home ownership. Still, over the past decade state general revenue funding for higher education has declined in both nominal dollars and as a share of the state budget, shrinking as a priority as other programs and even business tax cuts have taken precedence. Amendment 2, which will be on the ballot in November and could reduce property tax funding for local services, would introduce another strain on the state budget that could crowd out higher education investments if lawmakers enact a plan to reimburse local authorities for property tax revenue losses.
Between 2013 and 2023, higher education has shrunk as a priority in the state budget, going from making up 10.8 percent of the general revenue fund in FY 2013 to just 9.5 percent in FY 2023. After adjusting for inflation, the state’s investment in higher education is $156 million lower in 2023 than it was a decade earlier. Over that period, spending per student declined by $250 annually, but that metric doesn’t tell the full story of the impact of reduced higher education investments on West Virginians.
Over the past decade, tuition at our state’s colleges has more than doubled, far outpacing inflation. After adjusting for inflation, tuition has increased by 29.3 percent at four-year institutions and 21.7 percent at two-year colleges. This significant increase in tuition passed onto students due to inadequate state investment likely pushed many West Virginians out of college affordability entirely. Enrollment in the state’s colleges and universities is down 24.8 percent over the same period.
While tuition skyrocketed, the value of the state’s Promise Scholarship has remained flat after transitioning from covering full tuition to a block grant in 2010. In fact, the value of the Promise Scholarship has increased by only $250 since 2010, when it covered up to $4,750 annually in tuition, until 2022, when it began to cover $5,000 in tuition annually, even as average tuition more than doubled over that same period. In 2013, the Promise Scholarship covered 85 percent of the average in-state tuition at a four-year institution; in 2022, it covers just 63 percent of the average in-state tuition at a four-year institution.
So why is it that higher education always finds itself on the chopping block in the state budget? One big reason is that state lawmakers have very little flexibility in the budget decisions they can make. Nearly two-thirds of the state budget is statutory or non-discretionary, meaning that it has to be funded unless state code or the state constitution is changed. This means that when revenues are down or new priorities emerge, it’s a small slice of the budget that can be shuffled around or cut to accommodate those needs. Higher education is one of relatively few state-funded areas that is not protected by state code or the constitution.
Amendment 2 could exacerbate this issue and further crowd out higher education as a priority. Under the Senate’s proposed plan for reimbursing counties for lost revenue if Amendment 2 passes, the state would absorb county reimbursements into the state budget as another item they have to pay for out of the general revenue fund. We’ve covered in depth how the Senate’s plan relies on unrealistic spending and revenue assumptions, which could quickly lead to a strain on the state budget. This could result in further cuts to state programs, as lawmakers have another priority that they want to fit into the general revenue fund pie. That could put the state’s remaining investments in higher education on the chopping block yet again.
If Amendment 2 leads to fewer investments in higher education or other state priorities like infrastructure or health care, it would make our state less appealing for businesses and families—resulting in a net negative impact on our economy rather than a positive one. Instead of risky and ineffective business tax cuts, we should invest in what we know works—quality, well-funded education for our residents and other programs and services that make our state a healthy and thriving place to live.
We have a great newsletter, join below: