Delivered by Comissioner Richard M. Freeland on February 25, 2014 before members of the House and Senate Committees on Ways and Means at UMass Amherst.
Thank you for the invitation to testify today. I am pleased that you have chosen the Amherst campus as the venue for today’s discussion, and I thank my colleagues from the University of Massachusetts for once again hosting this important hearing.
As you know I am here today to present the Board of Higher Education's priorities for the FY15 budget as reflected in House 2. The year ahead will be pivotal for public higher education as we seek to advance the historic investments that began in FY14 in service of building one of the nation’s top systems of public higher education.
Thanks to the bold leadership exhibited by Governor Patrick and Legislative leaders, in FY14 the Commonwealth ranked among the top five states in the nation in the year-to-year increase in the state appropriation for public campuses. On behalf of my colleagues at the state universities and community colleges, I want to express our appreciation for this support. We know the difficult choices you must make as you build a budget. At a time when other states were cutting higher education budgets, Massachusetts chose to do the opposite. We are deeply grateful.
It is also important to keep funding for public higher education in a larger and longer term perspective. The face dollar value of the FY14 budget for the state universities and community colleges, even with the generous increases to which I have referred, is approximately equal to the aggregate budget for these institutions in 2001, a year when these campuses collectively enrolled significantly fewer students than they do today. Inflation, of course, has eroded the purchasing power of these dollars even as we try to serve more students with them. So, while FY14 represented significant and welcome progress, our state remains in the middle of the pack nationally in terms of per student support for public higher education. This is not, I think, where Massachusetts wants to be or where we need to be if we are going to have the vibrant and prosperous economic future that we all want for our citizens.
So it is my hope and that of my Board that the Legislature will respond favorably to the Governor’s recommendation that we continue the pattern of increased support for our public colleges and universities that began last year. Those increases were, I think, a response to two important developments: 1) concern about rising college costs and 2) a new sense of urgency about the need for excellence in Massachusetts public higher education.
I believe we have made progress on both fronts. The FY14 investments led to a groundbreaking commitment by our institutions to freeze fees and stabilize the cost of college for students and families. At the same time, the additional funds helped further our goal of becoming a national leader among state systems of higher education. As I have said repeatedly, we are committed to producing “the best-educated citizenry and workforce in the nation”—and we are committed to holding ourselves accountable for results. We are also committed to matching our requests for increased support with equally vigorous efforts to achieve heightened efficiencies in our use of the state dollars we are granted. Let me take a few minutes to share some of the progress that your increased investments have allowed and also comment on the progress we are making to reduce our operating costs.
In FY14, at the request of the Legislature, we implemented a new performance-based funding formula for Massachusetts’ 15 community colleges. The formula was the first step towards mitigating the large inequities in per-student funding that had arisen over the years as annual campus allocations rose by identical percentages irrespective of the rate of enrollment growth.
The formula also allowed us to tie funding to specific outcomes. Our data indicate looming shortages of workers needed for high-skilled jobs in health care, STEM and finance fields. As a result of the formula, community colleges that are making progress in raising their graduation rates are being rewarded for their success. This is a win-win: a win for the colleges and also for the state. Given the success of the community college formula, we are now seeking support for a similar funding mechanism for the state universities.
Also generously funded in FY14 was the Vision Project Performance Incentive Fund, formally known in the budget as the Performance Management Set-Aside. Created by the Legislature in FY12, this competitive grant program advances our goals of academic excellence, operational efficiency, collaboration between campuses, and transparency to the public.
In FY14, DHE and a panel of national experts awarded 16 new grants and continuation funding for 45 ongoing projects, touching every public campus and every region of the Commonwealth.
Along with these and other campus-level activities, we used FY14 Performance Incentive Fund dollars to further advance our efforts to create a system of course equivalencies and common course numbering across all three segments of public higher education—the community colleges, the state universities, and the University of Massachusetts. This project, which is mandated by the Legislature, will greatly facilitate transfer among the 28 public campuses with undergraduate programs.
Finally, the Performance Incentive Fund has also yielded dividends on the savings and efficiencies front through the Partnership to Advance Collaboration and Efficiency (PACE). Over the course of FY13 and FY14, the Department of Higher Education, the community colleges, and the state universities have worked together to build a multi-year strategic plan to achieve heightened efficiencies in information technology expenditures, centralize procurement practices, and assess spending patterns on energy utilization. The return on investment will continue to grow as the campuses tackle longer-term projects that leverage the scale and collective buying power of the institutions.
So I believe our public campuses are providing a solid return on investment for the heightened support we have received, while also making good progress with respect to cost savings. Our top priority for FY15 is to maintain this progress by sustaining funding for the programs and initiatives that you supported in FY14, including the STEM Starter Academy. Through this initiative, the 15 community colleges have come together to ensure that students from underserved communities who want to pursue careers in science, technology, engineering, or math (STEM) succeed in doing so.
These are the kinds of investments that change lives—not only the lives of those who attend our institutions, but also the lives of those who depend upon robust economic growth to build a better future. In other words, all Massachusetts residents benefit from investments in public higher education that strengthen the system’s ability to deliver brainpower—which is, of course, the Commonwealth’s chief asset in the global competition for investment, jobs, and talent.
Our public higher education students are “here to learn, and here to stay.” At a time when greater numbers of private college and university students are leaving the state to build lives elsewhere, it is our public institutions that are playing the lead role in preparing the future citizenry and workforce on which we all depend. Two-thirds of Massachusetts high school graduates who attend college in state choose a public college or university. We are grateful for the Legislature’s recognition of our growing role and importance to the state, and we are confident that we are making good use of the dollars invested in our enterprise.
Let me now highlight a few of the Board’s top priorities for the coming fiscal year as reflected in the Governor’s budget.
The Governor seeks support for DHE academic programs:
For the community colleges and state universities, the Governor seeks:
Lastly, the Governor seeks support for the Massachusetts State Scholarship program. I remain deeply troubled by the rising debt levels incurred by our public college and university students. As I testified last fall before the Legislature’s higher education subcommittee on student debt, the amount of student loan debt for public college and university certificate and degree recipients has risen 27 percent over the past three years. This percentage is consistent across all three segments, although the dollar amount differs.
Too many students tell us they are forced to reduce their course loads or drop out of college entirely in order to earn money for school. In 1988, MASSGrant, the state program for our neediest students, covered 80 percent of the average cost of tuition and fees. Today it covers just 9 percent of the costs. Making college more affordable not only helps individual students, it helps our entire economy by getting students into the workforce, where they are needed, at a faster rate.
As we all know, the 2008 Higher Education Bond Bill was a game-changer for capital investment on the campuses, the first exclusive bond authorization for the campuses since 1995. The commitment of these funds sent a powerful message to the institutions and all their constituencies that quality facilities are essential to the mission of our public institutions. A focus on the construction of science buildings has been especially important, given the nature of the Commonwealth’s innovation economy and the efforts of the Administration and the Legislature to attract students into the STEM fields. With the release of the FY14 capital plan, we can now claim that every one of the 29 campuses throughout the Commonwealth will have a major capital project completed or underway from the 2008 Bond Bill.
While the construction of new buildings on every campus is a remarkable milestone, I am concerned that there isn’t sufficient funding to support the growing deferred maintenance needs. As I visit the campuses, I hear a recurring theme of maintenance projects small and large—from re-pointing of windows and stairs, to aging mechanical systems, to crumbling access roads—that afflict every campus throughout the Commonwealth. Today our community colleges and state universities are spending upwards of 5 percent of their operating budgets on deferred maintenance, and they are still not keeping pace with the required upkeep. Every dollar spent on deferred maintenance from the operating budget is one dollar taken away from improving the quality of education for our students. It’s a practice that we cannot afford to continue.
In closing, I want to reiterate that the recent investments in public higher education are paying off. Today, Massachusetts is better aligned to address the needs of growth industries in the Commonwealth and the near-term training and employment needs of both students and job seekers. And we are also creating a pipeline of future workers and leaders who are civically engaged and well-prepared for careers in Massachusetts’ knowledge economy.
Massachusetts public higher education can—and should—be a top 10 system of colleges and universities in terms of both performance and support. We have work to do to achieve this goal. We in public higher education will pursue our commitments to excellence, efficiency and accountability. We hope you will continue the pattern of increased support that you initiated last year.
Thank you for your time and I am delighted to answer any questions you may have.
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