Recession takes huge chunk out of budgets

March 29, 2002

The recession in the United States may be easing, but it is taking a drastic bite out of public university budgets - even as enrolment continues to increase.

Tax revenues are sagging in the wake of a decline in consumer spending, and universities have been among the first government services to be cut. Thirty-six of the 50 states predict deficits well into next year, and public universities in Alabama, California, Iowa, Massachusetts, New York, North Carolina, Wisconsin and other states have already taken big hits.

Nearly every public university in Virginia is expected to raise tuition fees to offset some of the $290 million (£203 million)cuts imposed by the state assembly.

George Mason University decided last week on increases of more than $1,000 in tuition fees for some students to offset expected reductions in state funding. The university said the action would be reconsidered if funding were raised in the next 30 days by the assembly and/or Virginia's Democratic Party governor. The assembly has slashed $14.7 million from state funds for the university, the largest proportional reduction for any of the state's institutions in the budget.

With many state governors facing re-election this year, few are likely to raise taxes to plug the budget gap. Instead, faculties have been offered early retirement, athletic programmes have been eliminated, tuition and fees have been increased, and the admission of new students has been suspended.

One Florida university is holding classes in a cinema because numbers on some courses have swelled beyond the capacity of its lecture halls, thanks to $20 million in state budget cuts.

The most pain is being felt in Wisconsin, where $100 million in cuts - the most severe in state history - forced the University of Wisconsin System to halt admissions for two weeks and freeze hiring.

"We realise the impact this has on the lives of our applicants," said Jay Smith, president of the university's board of regents. "But we have no other choice."

The UW System was already facing a $51 million cut when the state's joint finance committee added a further $20 million cut through reductions to the university's base budget and a cap on tuition increases of 8 per cent. The cuts are also putting at risk about $58 million in matching money pledged by donors and businesses.

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