The Grapevine report is celebrating its 60th anniversary, making it one of the longest-lived higher education finance reports in the country. This anniversary comes at a unique moment as states grapple with the impact of the pandemic.
Data reported by the states in this latest Grapevine survey (tables 1 and 2) indicate that state fiscal support for higher education in fiscal year 2020-2021 (FY21) totaled approximately $96.7 billion, basically the same as for fiscal year 2019-2020 (FY 20). This reverses a six-year trend of more substantial increases (see chart below).
Annual percent changes in total state fiscal support for higher education nationwide, Fiscal Year 2015-Fiscal Year 2020
|Fiscal year||% Change from previous fiscal year||Number of states reporting a |
decline in funding from the
previous fiscal year
This funding level was only achieved with an almost sixfold increase in federal funds ($300M to almost $2B) channeled through the states to higher education. Direct state funding was down 1.3 percent from last year.
Only five states reported funding declines in FY19 and FY20 (-6.8 percent Alaska, -1.4 percent Hawaii, -0.2 percent Kentucky, -1.3 percent New Jersey, -0.6 percent New York). In contrast, 21 states reported declines in FY21 from FY20, even after adding additional federal funds. Twenty-six states reported declines in state funding only. The largest declines, even after adding federal pass-through funding, were in Nevada (17.8 percent), Alaska 10.5 percent), and California (7.5 percent). Colorado reported a 45.3 percent decline in state-only funding, but with additional federal support, reported only a 3.8 percent overall reduction. Most reported budget increases were minimal, with the exception of Vermont (45.7 percent, due to a one-time allocation to colleges), Washington (13.8 percent), Ohio (12 percent), and New Jersey (11 percent). The increases in Ohio and New Jersey were due to federal pass-through funds; otherwise, budgets slightly declined. Seven mega states (CA, FL, GA, IL, NC, NY, and TX) accounting for half (50.2 percent) of higher education funding nationwide reported an overall funding decline of 2.1 percent (Table 5).
Two-year and five-year trends
Over the longer term, total FY21 appropriations to higher education nationwide are 4.7 percent higher than funding made available two years ago in FY19. Nine states reported a two-year decline in funding. Nine states reported two-year gains of 10 percent or more. Note that the Grapevine data are not adjusted for inflation.
Number of states reporting two-year and five-year declines in state fiscal Support for higher education, FY18, FY19, and FY20
|Fiscal year||States reporting two-year declines||States reporting five-year declines|
Five-year trends show state support for higher education increased nationwide by 15.8 percent from FY16 to FY21. Sixteen states reported five-year increases of 20 percent or more. But five states reported five-year decreases ranging from 2.2 percent in New Mexico to 22 percent in Alaska. While wide variation among the states continues to exist, FY21 mitigated positive two- and five-year trends even with the large increase in federal funds (see table to the right).
Overall, the results of the Grapevine report show the clear, if not unexpected, impact of the pandemic, contributing to near flat funding this year. The importance of dramatically increased federal funds to address pandemic challenges is also clear. However, if there is a general finding for this year’s report, it may be that the pandemic did not wreak as much overall devastation on state funding for higher education as some had feared, though there are wide variations among states, and the fiscal year is not over. Current and anticipated federal funding to states and higher education has and could further mitigate the impact of the pandemic. It is also important to note that these state totals do not allow analysis of the differential impact of the pandemic on different sectors of higher education: more selective/elite, comprehensive, and community colleges. Given the critical role each sector plays in providing college opportunity, more detailed analysis should be done.
State fiscal context
Grapevine data alone do not provide the contextual information needed to compare or rank states in terms of the fiscal health of their higher education systems. For example, although Illinois reported a large (42.6 percent) funding increase over five years, a significant part of that increase represented monies appropriated during this period to strengthen the state’s badly underfunded college and university pension system and were not used to fund instruction for students at higher education institutions directly. Grapevine does provide some context for state funding (see Table 4) by examining state support for higher education per $1,000 in personal income and per capita over multiple years, showing the impact of overall state size and wealth on higher education funding. Still, to fully understand the dynamics of higher education funding, and its health in any state, requires a more in-depth analysis (e.g., funding differences by sector) than Grapevine provides.
As we move forward into an uncertain post-COVID-19 era, we must pay close attention to funding trends and their impact on equitable access to college success. The future of our economy and our democracy will depend on finding a path, however difficult, to a more educated country. The Grapevine report will continue its 60-year effort to do its part. This report is only possible because of the efforts of state agencies that, despite the challenges of the pandemic, provided their data and because of the efforts of Sophia Laderman at SHEEO and Dr. Jim Palmer, the Grapevine editor for the last 20 years, who both shepherded me through my first year as editor.
FY21 marks the fifth year Grapevine has included Washington, D.C., in its survey. The data reported by the District of Columbia exclude federal appropriations and reveal one-year, two-year, and five-year gains in local tax support of 0 percent, 3.4 percent, and 25.5 percent, respectively.