Improving Postsecondary Education through the Budget Process: Challenges & Opportunities

Improving Postsecondary Education through the Budget Process: Challenges & Opportunities

Introduction

Higher education has undergone erosion in public funding in today's challenging budget environment, just like a number of state spending domains. However, the financial issues experienced by higher education are distinctive in certain regards, mainly as postsecondary institutions have other revenue sources, along with, state appropriations. The alternate revenue sources availability, for instance tuition and fees, helps elucidate the rationale behind higher volatility of state funding for higher education in relation to other program areas. Though, in good fiscal periods, state appropriators are usually unstinting to higher education; however, during severe revenue slumps, they are subject to unduly cut funding. Tough fiscal constraints, in recent years, have brought about the transferal of a considerable proportion of the financial burden of higher education to the individual from the state, instead of a lessening in costs and/or efficiency improvement. However, in spite of funding cuts, a key role is still played by state funding and policy decisions in public higher education system, with state funding support constituting over half revenue of public higher education for general operating outlays. State spending for operating budgets of higher education is highly crucial as states make substantial assistances to institutions by means of providing state-funded sponsoring and financial aid programs for capital projects (Chickering & Gamson, 1987).

There are numerous diverse elements to the financing situation of higher education. All of the underlying factors are not captured by a single element, which is not just about funding or putting money into higher education institutions, or even about keeping low tuitions, but about ways as well to utilize resources to cope with needs of public for higher education (Betancourt, 2002). The main theme of this paper is to analyze how our educational system is affected by government and the budget at the City level etc., particularly how it affects low income families in low income neighborhoods. Since budgeting is a strategic application and “mission critical” in higher education; therefore, the focus of this paper is to examine how by means of the budgeting process, postsecondary education reforms could be implemented, in order to attain better outcomes, for instance increased access, higher completion rates, enhanced graduates' preparation for the workforce, and higher potential of earning with less student debt (Chickering & Gamson, 1987).

This paper will also discuss the challenges and forces influencing public higher education finance, including increasing higher education demand; fiscal conditions of state and tough competition for funding; increasing tuition and cost-shifting; spending trends of institutions; changing budgeting practices of state; and evolving federal role in financing postsecondary education (Schoenfeld, 2005). This paper will also identify key opportunities for budget offices of state and higher education institutions to collaborate so as to improve the efficiency and effectiveness of public higher education system. Recommendations are also provided at the end of the paper for using budgeting strategies to address the issues of postsecondary education system to better accomplish the public ...