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The Honolulu Advertiser
Posted on: Thursday, March 27, 2003

Spending projections bad for UH

By Beverly Creamer
Advertiser Education Writer

New projections about the financial problems of higher education nationwide put Hawai'i at rock bottom for public support of the state university system during the last decade, and suggest that the 50th state will fall further behind in the next five years.

An analysis by the Rockefeller Institute for the National Center for Public Policy and Higher Education, a think tank that looks at education issues, shows Hawai'i among the top five states in anticipated budget shortfalls by 2008.

That could mean even more of a squeeze for the University of Hawai'i, which has sustained a loss amounting to $63 million in purchasing power in the past 12 years, with more cutbacks expected this year.

Projections suggest that in five years, Hawai'i will have a state budget shortfall of 15 percent. That compares with the other big losers — 18 percent for Nevada, 16 percent for Alaska, 13 percent for Idaho, and 12 percent for New Mexico. States expected to do well include Nebraska, Connecticut, Minnesota, Michigan and Massachusetts.

"Maintaining funding for the wide range of existing state services will place enormous pressure on state legislatures to continue the recent practice of sharply reining in, if not reducing, their appropriations to higher education," says a new report from the institute.

"Even if states experience normal economic growth over the next eight years, all but a handful of states will find it impossible, given their existing tax policies, to continue funding their current level of public services.

"For higher education this picture is even worse. Higher education's share of state budgets will continue to get smaller."

In analyzing a wide range of economic indicators, the public policy center found:

  • Hawai'i's budget shortfall at the end of the decade will be about 3.6 percent of state revenue, worse than the nationwide average of 3.4 percent.
  • Medicaid spending is expected to grow by about 10 percent a year.
  • Hawai'i's population is projected to increase by 23.5 percent between 2000 and 2015, making it one of the fastest-growing states, outstripped only by California, with a projected 27.2 percent growth rate, and New Mexico, with 23.7 percent.
  • Hawai'i will do better than most states for percentage of the population that lacks a high school diploma. Projections suggest the figure will be 12 percent in Hawai'i, compared with 26 percent in New Mexico, 22 percent in Alabama, 21 percent in Kentucky, 20 percent in North Carolina, 19 percent in Mississippi, 18 percent in Arkansas, 17 percent in New York, 16 percent in Florida and Missouri, 15 percent in Indiana and 13 percent in Delaware.
  • In terms of percentage of children living in poverty, Hawai'i is better off than 37 other states, with 12 percent of our children living below federal poverty guidelines of $10,330 for a family of one, $21,160 for a family of four, and $28,380 for a family of six.
  • Hawai'i has experienced the smallest increase in spending on public higher education of any state — 3 percent in the past 10 years. That compares to increases ranging from 7 percent in Montana to 118 percent in Mississippi.

The national average was 54.2 percent.

Reach Beverly Creamer at bcreamer@honoluluadvertiser.com or 525-8013.