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Friday News Roundup: Week of November 26-30

Published:  November 30, 2012

Connecticut Governor Dan Malloy shrinks deficit with cuts to social services, colleges

Alabama prepaid tuition program will run out of money in 2015 without lawsuit settlement, report estimates

West Virginia state higher ed chief says no cuts to financial aid

Oregon Governor John Kitzhaber’s budget offers 500 more teachers, cap on PERS increases

Connecticut Governor Dan Malloy shrinks deficit with cuts to social services, colleges
In response to a $363 million deficit, Connecticut Governor Dan Malloy this week announced a $123 million round of emergency cuts. Most of that is targeted at social services programs, and $25 million will cut funding for public colleges and universities. A smaller cut of $8.4 million was also applied to preK-12 education in the state. The cuts to higher education come on top of $68 million in cuts to colleges that lawmakers have made since 2011. The earlier cuts led to tuition hikes at the University of Connecticut of 6 percent, and at community colleges and other state universities of more than 3 percent. The new, $25 million cut to funding, as well as $3 million cut from payments for faculty benefits, means that over the last two years, state funding for higher education has dropped by 14 percent overall. In total, the new cuts represent less than half of the deficit, so the governor will have to work with the legislature to make more cuts in the coming weeks. More here…

Alabama prepaid tuition program will run out of money in 2015 without lawsuit settlement, report estimates
A new report on Alabama’s prepaid college tuition program shows that, unless the state Supreme Court approves a settlement with families to provide tuition at 2010 rates instead of current levels, the program will be short of funding by 2015.The tuition program has more than $300 million in investments, but pays out $90 million annually in tuition. The state legislature has already promised additional funds from the state’s Education Trust Fund coffers in 2015, but the extra payments still won’t cover the shortfall. The program, which allows parents to buy in and later receive college tuition and fees, has seen financial trouble since a simultaneous global recession and tuition hikes. Legislators attempted to change the program to pay out at 2010 levels in that year, but the law has been traveling through the courts since then. More here…

West Virginia state higher ed chief says no cuts to financial aid
Although West Virginia Governor Earl Tomblin asked all state agencies to cut their budgets by 7.5 percent in fiscal year 2014, the state Higher Education Policy Commission announced this week its financial aid programs would not be affected. Unlike other programs, like the K-12 funding formula, higher education is not exempt from the budget cuts, but the Commission stated that it would not cut financial aid spending regardless. In preparing its budget, the Commission decided to preserve the Promise Scholarship, which benefits students with strong academic performances and receives $47.5 million in funding annually from a combination of video gambling revenue and general funds. Governor Tomblin will present the 2014 budget in February, so negotiations with state agencies will continue until that time. More here…

Oregon Governor John Kitzhaber’s budget offers 500 more teachers, cap on PERS increases
Oregon Governor John Kitzhaber this week introduced his proposed fiscal years 2013-2015 biennial budget, which cuts some state programs and reforms the public employees retirement system while increasing education spending. His cuts, while controversial, would allow the state to increase funding for K-12 schools by 8 percent, up to $6.15 billion. That money will let states hire as many as 500 new teachers, or avoid hundreds of teacher layoffs if changes to the pension system are not approved. Funding for higher education would increase by $14 million for state Opportunity Grants and by $275 million in construction bonds for community colleges and universities. Early intervention spending would increase by $4 million, and special education for early childhood programs would increase by $16 million. The budget does not include any new revenue streams. More here…

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