Florida ever-blades: state bleeds after deep cuts

Republicans at loggerheads with Democrats and Moody's over retrenchment. Graham Jarvis writes

May 31, 2012

In common with many US states in recent months, Florida has slashed its higher education budget, cutting $300 million (£191 million) in a bid to help tackle its fiscal deficit.

The move will force Florida's 11 public universities to dig into their reserves, potentially leading them to hike tuition fees by up to 15 per cent and close some academic programmes. Courses in the arts and humanities are the most likely candidates for the chop.

But opponents have labelled the move short-sighted, claiming that cuts will not boost the struggling regional economy's long-term growth prospects.

Dwayne Taylor, a representative in the lower house of the Florida legislature, said that students will be left with three choices: arrange a loan, pay for their own education via personal means or enrol in universities outside the state.

"It's going to be devastating to the local economy," said Mr Taylor, a Democrat.

However, Lane Wright, a spokesman for Rick Scott, Florida's Republican governor, said that Mr Scott was aware that jobs and growth required a well-educated workforce.

"To that end, he's encouraging colleges and universities to focus on degrees and programmes where there's a growing demand for jobs in the fields of science, technology engineering and maths," he said.

The governor has now also launched a task force to look at how to reform the system and make it more efficient.

However, credit rating agency Moody's has been critical of the decision to cut university funding.

"The [retrenchment] effectively punishes those universities that built reserves, and we view the reduction of their reserves as credit-negative", says Dennis M. Gephardt, a vice-president and senior analyst with the firm, in one of Moody's weekly credit outlooks.

He suggests that two institutions will be most affected by the cuts: Florida State University and the University of Central Florida.

Such public universities will lose $150 million from their reserves, discouraging them from putting money aside to invest in programmes or resources, he says.

Victor George Sanchez, president of the United States Student Association, said he feared that the cuts would reduce Florida's academy to "a two-tier system that is based on market-rate tuition fees and which offers a blank cheque; it's not sustainable and nor is it predictable".

In Mr Sanchez's view, the retrenchment will lead to the public universities charging anything they like - and without any transparency to hold them to account.

"They are going to rely on students as cash cows to fill the state's $3.3 billion budget deficit," he said.

Opponents of the cuts want state legislators to talk with them to discuss ways of generating additional income.

In the meantime, they warn that the cuts are going to leave the state undereducated, undermining its progress.

Mr Taylor said: "They are going to create a domino effect the more they continue to make cuts to the higher education budget."

Despite this, some commentators believe that the spectre of unemployment may still lead to an increase in student enrolments at Florida's public universities, even if fees rise sharply.

However, it may be that institutions offering cheaper options such as e-learning courses, rather than campus-based universities, will benefit.

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