Washington Watch: Stimulus jockeying continues

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Legislators have largely left Washington, D.C., for the national political conventions and the traditional August recess, but the American Association of Community Colleges (AACC) and other advocacy groups remain ever-focused on a possible new stimulus bill to address the coronavirus pandemic.

Earlier this week, Senate Republicans circulated but did not formally introduce a “skinny” stimulus bill that many had hoped would help broach the yawning gap between the two parties’ positions on stimulus support. However, it quickly became apparent that the proposal did not have enough support to advance, starting with the fact that a significant number of Republican senators – in the neighborhood of 20 – did not back it. Many of these members have stated their deep reservations about further deficit-spending in the context of an unusually hard-to-read economy and uncertainty about the impact of previous pandemic-directed legislation. 

McConnell’s proposal

In the area of education, the Republican draft is virtually a carbon copy of the HEALS Act that Senate Majority Leader McConnell (R-Kentucky) proposed last month. It would provide $29 billion for the Higher Education Emergency Relief Fund created in the CARES Act. Ninety percent of those funds would be distributed through formula grants similar to those in the CARES Act, with important programmatic differences that would likely make it much easier for campuses to deploy funds than under that legislation. 

The legislation also provides substantial funding for Titles III and V of the Higher Education Act, a top AACC priority.

Despite the welcome inclusion of support for higher education in McConnell’s proposal, the funding level is far below what AACC and other higher education groups seek – at least $46.6 billion across all institutions. (The House-passed HEROES Act provides about $7 billion more for higher education than the Senate proposal, but still less than the amount requested by AACC.)

The $46.6 billion figure reflects the current parameters of the policy debate; campuses and students actually need much more. (Revised estimates were sent to Capitol Hill.) For community colleges, increased student needs, the costs of providing education and student supports in a dramatically altered environment, widespread anticipated fall enrollment drops, and almost inevitable deep cuts in public funding make for a harrowing financial picture requiring federal support. 

The importance of using headcount

Critically, and unfortunately, McConnell’s legislation would not change the formula that allocates the bulk of funds to campuses. The bill replicated the CARES Act’s use of FTE to distribute funds, which disadvantages community colleges vis-à-vis other sectors in comparison to using headcounts. 

As reported earlier, the House-passed HEROES Act, H.R. 6800, as well as Senate Democrats’ legislation, S. 4112, uses the headcount measure. If the current impasse on the stimulus legislation is unblocked, supporters of these bills will hopefully succeed in persuading their colleagues of the merits of using headcount.

In its advocacy on the headcount issue, which is coupled with arguing for substantial support for all institutions, AACC has stressed the radically altered and more challenging circumstances in which many of their students find themselves, as well as basic principles of equity. Community colleges do not think that, just because four-year institutions charge more and overall have much greater revenues – including those derived from endowments – than community colleges do, that they are therefore justified in getting a disproportionate share of funds, as occurred in the CARES Act. 

Making the case

Community colleges instinctively refer back to their actual students, who are lower-income and of more diverse overall than those attending four-year colleges. AACC has produced a document that provides greater detail and data on some of these dynamics. A few salient points include: 

  • Community colleges remain by far the least costly sector of higher education. Their average annual undergraduate tuition and fees for a full-time student is $3,730, compared to $10,440 at public four-year institutions and $36,680 at private non-profit institutions, according to the College Board. 
  • California community colleges estimate that long-term cost, lost purchasing power, and impact on students for fiscal years 2019-20 and 2020-21 will be $1.3 billion. This figure does not include lost revenues (including any cuts in state appropriations), a significant element of the pandemic’s impact on institutions. Illinois community colleges’ financial losses to date and expected losses total nearly $150 million. New Jersey estimates that the loss of state aid, revenues and additional costs total $120 million just through September 30.
  • Community colleges also devote higher percentages of their budgets to academic support than four-year institutions, and more than twice as much on student services than public four-year colleges.
  • Community college faculty are compensated lower by far than in other sectors; the average professor earns $80,000; at a public four-year college the corresponding amount is $130,000.
  • Community colleges are uniquely dependent on state and local government support, which represents 53 percent of all revenues. The ongoing economic crisis in state budgets will undoubtedly leave them absorbing major reductions.

The stimulus debate is far from over. AACC will continue to push for adequate funding for higher education and for a fair distribution of those funds. For more information on how to help, contact AACC’s office of government relations and policy analysis. In the meantime, AACC will keep its members informed of all relevant developments.

About the Author

David Baime
is senior vice president for government relations and policy analysis at the American Association of Community Colleges.