LFA: Higher ed has little new state money; EAC sets 5% reduction target

Joseph Fitzgerald, staff at the Office of the Legislative Fiscal Analyst, told the Higher Education Appropriations Subcommittee that the state's adopted revenue estimates and set-asides leave no unconstrained dollars for higher education and that the Executive Appropriations Committee has set a 5% ongoing state-fund reduction target to be considered by subcommittees.

"If you look at the revenue estimates that EAC adopted in December, before any set-asides, we had a balance of $270,000,000," Fitzgerald said, adding the adopted available amounts were $208 million for fiscal 2026 and $555 million for fiscal 2027 before adjustments. He told members most state funding for higher education is in the operating and capital sections and estimated state general and income tax fund support to higher education at about $1.8 billion.

Fitzgerald said 5% of the state dollars for higher education equates to roughly $93,700,000. To help the committee reach that target, the LFA prepared an alphabetical list of possible reductions and options to reallocate funds. Candidates included reversing recent incremental appropriations for an engineering and computer science initiative, using initial disbursements from the Higher Education Student Success Endowment to backfill existing statewide scholarships, reducing out-of-state tuition waivers by about 60%, recapturing unearned performance funding, proposing modest technical college tuition adjustments, and exploring administrative consolidations for small institutions such as Tooele Technical College.

Fitzgerald emphasized these are starting points for discussion and said institutions will provide written responses to each suggested item. "They're just a starting point," Fitzgerald said. "If you think they're all terrible and you wanna disregard every single one, not offended. If you wanna use all of them exactly, great."

Committee members raised concerns about repeating cuts after last year's reallocations, the effect on students and institutional missions, and whether swapping endowment disbursements for ongoing state scholarship dollars would change eligibility or create fewer new scholarships. Fitzgerald said disbursements from the student success endowment had not yet been made and that a swap would backfill existing scholarship awards rather than create net new scholarships.

The committee did not take formal action on the recommendations at the meeting; members directed staff and institutions to provide additional detail and to return with proposals and responses as the subcommittee continues budget deliberations over the next three weeks.