General Assembly to Focus on Tuition Cut
By Craig Timberg
RICHMOND Gov. James S. Gilmore III (R) and Virginia lawmakers are about to begin undoing years of budget decisions that left the state with some of the country's most expensive public colleges, an effort that some say reflects a fundamental change in how the Old Dominion views higher education.
Virginia's 15 four-year universities and 23 two-year community colleges have long charged students several hundred dollars more each year than similar schools in nearby states. It is partly the result of the recession of the early 1990s, when colleges jacked up tuition to make up for state funding cutbacks.
Some lawmakers and educators acknowledge that there is another reason Virginia's colleges charge so much: because they can.
Virginia's public colleges generally are regarded as among the finest in the country. The University of Virginia, Virginia Tech and the College of William and Mary are the crown jewels of a system in which a student at a four-year college paid about $3,962 in 1996-97, the ninth-highest tuition rate among states in the country, according to the U.S. Department of Education.
Old Dominion University President James V. Koch, an economist, says Virginia's historically high tuition rate has been a reflection of the schools' attraction to students.
"Virginia institutions as a whole seem to be able to charge higher prices," Koch said. "I think some legislators seem to know that."
Now, a Republican governor who came into office last year riding a populist, tax-cutting platform and a state budget surplus of nearly $900 million have combined to make cutting college tuition a priority in the legislative session that begins here Jan. 13.
Gilmore, a graduate of the University of Virginia and its law school, wants to cut tuition by 20 percent for in-state students, a plan that would cost Virginia $75 million a year. It would save an in-state student at a four-year college $578 a year; an in-state student at a two-year college would save an average of $286.
There is widespread support for Gilmore's plan -- or something like it -- in the legislature. Lawmakers and college officials say Virginia colleges need to maintain quality while making sure more students can afford to attend them.
"Historically, we've had this feeling that higher education is the responsibility of the individual," said George Mason University President Alan G. Merten. "I think as we move ahead in this computerized world, the state can't afford . . . not to make that investment."
Merten and other college officials have praised the push to cut tuition, which many say has become a barrier to middle-class students and a cause of long-term debt for many graduates.
Although Gilmore's plan would send colleges more tax dollars to make up for lost tuition revenue, critics worry the commitment would last only until the next economic slowdown. And they say Gilmore's plan would not undo what they call the state's legacy of underfunding state colleges.
Virginia's public colleges have long had some of the highest tuition in the country for state residents and rank among the lowest when it comes to state support. Tuition and tax dollars are the largest components of a public college's budget, and they act like a seesaw: High state support means low tuition, and low state support means high tuition.
In most states, including Virginia, the seesaw tipped toward high tuition during the recession earlier this decade. From 1989 to 1994, Virginia's tuition and fees rose nearly 50 percent, an average of 8.4 percent a year for five straight years, according to federal statistics.
By cutting tuition by 20 percent, Virginia would be taking an unusual step in comparison with other states, where efforts to cut college costs have focused largely on slowing the rise in tuition and fees, rather than trimming tuition outright. Such a large cut would put Virginia's public college costs for in-state students below that of Maryland, reversing Old Dominion's tradition of charging its students more than any of its neighbors charge theirs.
The key is state support. In the last decade, Virginia's spending on higher education has dropped by 7 percent in inflation-adjusted dollars, according to statistics compiled by Illinois State University. In that same stretch, spending on state colleges nationwide rose by 7 percent.
Virginia's decline primarily is the result of cuts earlier this decade. In the last two years, state spending on higher education has risen 18 percent.
But Virginia's neighbors have spent more generously, when adjusted for inflation, on higher education throughout the last decade. Maryland's spending is the same in 1998 as it was in 1988, before the recession. West Virginia is spending 6 percent more, Tennessee 2 percent more and Kentucky 27 percent more.
The most striking comparison is with North Carolina, which has a well-regarded public college system that generally is seen as comparable to Virginia's. North Carolina increased its spending on higher education by 21 percent during the last decade. As a result, North Carolina's tuition and fees for an in-state student totaled about $1,841 in 1996-97, the third-lowest in the country. Virginia's in-state students paid more than $2,000 above that and would have paid even more if then-Gov. George Allen had not frozen tuition rates in 1994.
"The state commitment to public education in [North Carolina] is significantly greater than it is in Virginia," said Gail Shea Nardi, a Democratic strategist who has worked in both states. "Always has been."
Gilmore, a Republican who has made higher education a top priority of his administration, likes to point out that tuition at the University of Virginia has increased more than 900 percent since he graduated in 1971. Adjusted for inflation, the increase is 146 percent.
Although Gilmore is lavishing significant new spending on higher education, his push is for better value for the tuition dollar, not growth at the colleges themselves. The state already spends $1.3 billion a year -- one of every 10 general fund dollars -- on higher education, and yet administration officials say tuition rates for Virginia's 163,000 in-state undergraduates are about 30 percent above the national average. Gilmore's tuition cut would drop Virginia's tuition to the middle of the pack, about 13 percent over the national average.
Critics note that lowering tuition does not necessarily strengthen the universities. The ones with room to grow, such as George Mason and Old Dominion, may benefit from more students. For others it could be a wash, because Gilmore's plan would replace the lost tuition revenue with tax money but wouldn't necessarily increase their overall budgets.
A group of business leaders, led by Northern Virginia developer John T. "Til" Hazel Jr., has argued that Allen's tuition freeze is starving state universities of desperately needed cash. Gilmore's tuition cut won't improve the situation, Hazel said.
"Governor Gilmore is refusing to admit the problems of higher education. He is playing a politically popular card, just like the car-tax [cut]," said Hazel, a former rector at GMU. "The universities are still woefully underfunded."
But the push for lower tuition is bipartisan. Republicans liken a tuition cut to a tax cut. Democrats see a cheaper college education as the best way to elevate the poor and middle class. Both sides see an educated work force as the key to a state economy increasingly dependent on technology.
"It became obvious to all of us that a college education was getting beyond the means of the average Virginian," said Del. Alan A. Diamonstein (D-Newport News), who proposed a tuition-cut plan a month before Gilmore. "I think you're going to see a great deal of harmony [on cutting tuition] between the legislature and the governor."
Wednesday: The politics behind the 1999 session.
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