In return for this exemption, state higher education leaders have agreed not to raise tuition next year.
"I think it's my job to balance it (the budget) and present a positive future for the state," Nixon told reporters Wednesday at a news conference. "And I just did not see how we were going to get that positive future for the state if we kept having students having uncontrollable tuition increases and higher education always concerned about having to clip back on what they've built."
Nixon's recommendation is still subject to approval by the General Assembly.
University of Missouri System President Gary Forsee said he, other state higher education leaders and Nixon have been in talks for several weeks and that the agreement they reached is needed "to stimulate the economy, and do that with high-quality jobs and high-quality education for our students and families."
Forsee later told reporters that the system-wide hiring freeze, which has been in effect since Nov. 17, will remain in place. In a statement issued Wednesday, Forsee said students, faculty and staff can continue to submit ideas for increasing efficiency within the system.
With a state budget that is expected to face a shortfall as large as $342 million, cuts and belt-tightening are all but expected. Higher education is historically one of the first government sectors to face budget cuts, primarily because public institutions can recover financial losses by increasing tuition and other fees.
In 2002's post-Sept. 11 economic recession, MU received a $49 million cut in state appropriations under former Gov. Bob Holden's budget proposal. MU raised tuition by 13.6 percent the following fiscal year, but a bill adopted in May 2007 now ties tuition increases to increases in the Consumer Price Index.
Colleges and universities were asked by the state Department of Higher Education in December to prepare statements detailing how their campuses would operate under possible reductions in state funding of 15, 20 or 25 percent. The report submitted by Forsee on Dec. 18 hinted at consequences that included reductions in faculty and staff positions and tuition increases.
The current economic recession has forced other states to reduce budget appropriations to higher education. Nixon said other states are cutting higher education budgets by as much as 8 or 9 percent, and the Associated Press reported that midyear tuition increases were as high as 14 percent in New York.
"I just saw (Calif. Gov. Arnold) Schwarzenegger raise it (tuition) by 13 percent, and it inspired me to be stronger than him," Nixon told reporters.
Nixon did not clarify whether state funding during the current fiscal year, which ends June 30, will be subjected to withholdings.
He acknowledged that cuts would have to be made in other state departments and sectors to compensate for higher education's exemption from budget cuts. The state Constitution requires the General Assembly to balance the budget each year.
"Certainly there will be some other parts of government and services that have to feel a little of the pruning knife of time, but it's not higher education's time," Nixon said. "We have to invest in these kids. We just cannot cut the seed corn when we have to harvest it."
When reporters asked if making promises about fiscal year 2010 is premature, especially because a consensus budget has not been passed between the House and Senate, Nixon said simply that his proposed budget will live up to every agreement and promise he has made and is working on.
"The budget that I present next week will be a balanced budget," Nixon said. "But I'm not going to balance it on the backs of higher education."
Nixon will formally reveal his proposed budget plan Tuesday in his State of the State address.
In what could be a break from inaugural promises of bipartisanship and communication with the Republican majority, however, Nixon did not consult or alert top state legislators involved in higher education and the state budget prior to making his announcement on Wednesday.
"I didn't know he was going to make this announcement, and I was not a participant in these negotiations with the higher education system," said 2008 Senate Appropriations Committee Chairman Gary Nodler, R-Joplin.
House Budget Committee Chairman Allen Icet, R-Wildwood, said he heard of Nixon's promise early Wednesday afternoon, shortly after Nixon held his press conference in Columbia. Icet, the top House leader in state budget matters, expressed concern about the preservation of the need-based Access Missouri financial aid program, and he said he would have appreciated prior notice of Nixon's intentions, especially in the interest of bipartisanship.
"To some extent, Sen. Nodler and I have expressed our desire to work with the governor for the 2009 budget, to assist where possible in making some decisions on reductions," Icet said. "And obviously with the 2010 process, it changes a little bit in that the governor will be making recommendations and write the budget bills.
"I understand it's the governor's prerogative to go out and make some of the announcements," Icet said. "I certainly respect that. But in some cases, I certainly look forward to working with the governor on just a little bit of a heads-up prior to making announcements."
Senate President Pro Tem Charlie Shields, R-St. Joseph, said he is doubtful about the feasibility of Nixon's promise to spare public higher education institutions from budget cuts. Noting that there is not yet a consensus state budget for 2010, Shields said making promises about the next fiscal year could be risky.
He also cited the implications for other departments in danger of facing budget cuts.
"When you promise one segment of the budget that you're immune from cuts, I think essentially you're telling the rest of the segments that you will be cut, given the revenue situation that we're going to be in next year," Shields said. "I understand his intent -- nobody wants to cut higher ed -- but I don't know that that's entirely possible given the situation that we face."
Sen. Kurt Schaefer, R-Columbia, said he, too, is concerned about what cuts will have to be made in other sectors, but he expressed cautious optimism about Nixon's vow to spare higher education. After acknowledging that there is no consensus budget, Schaefer said he is grateful that Nixon is giving higher education a break after that sector has received repeated budget cuts over the past decade.
"I think that any time we're looking at a budget shortfall like we are now, you've got to look at the recent past and see who has paid a disproportionate share in recent times," Schaefer said. "And I was glad to see the governor acknowledge that the university has in fact paid a disproportionate share in the past eight or nine years."
Nixon stressed that this agreement to exempt higher education from cuts and freeze tuition is a step forward.
"We're turning a corner here and saying for the first time in a long time that that pool of money that goes to higher education is not the place we're going to go hunting for cuts," Nixon said. "I'm just very pleased that we've been able to balance a 'no tuition increase' with that. It gives us a win-win on both sides."
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