Home Economy Report: Cuomo’s free tuition plan could cost jobs, tax revenue

Report: Cuomo’s free tuition plan could cost jobs, tax revenue

Free tuition at public universities could be great for SUNY, CUNY and community colleges, but the plan could also cost tens of thousands of private-school jobs and hundreds of millions in lost tax revenue, according to a new report from a commission representing private colleges and universities.

The plan by Gov. Andrew M. Cuomo to provide free tuition at New York’s public universities for qualifying families could boost enrollment at those schools between 9 and 22 percent, according to the report released March 9 by the Commission on Independent Colleges & Universities (CICU) in New York. But the report points out that the public enrollment boost could cut enrollment at private, not-for-profit colleges and universities by between 7 and 15 percent.

Cuomo’s proposal, announced in January, would make tuition at SUNY and CUNY college essentially free for students from families making $125,000 per year or less. The state would cover any gap in a student’s tuition bill after state and federal education grants.

But the plan has been criticized by leaders of private colleges and universities, who instead want the state to expand its tuition aid for all students. The study estimates that if the proposal passes, the enrollment reduction at private colleges could cost the state 45,000 jobs and $224.3 million in payroll and sales taxes.

The study estimates the Mid-Hudson Valley region could lose 2,856 jobs and $11.2 million in lost tax revenue.

CICU president Mary Beth Labate, whose group represents more than 100 private colleges and universities, said the governor’s proposal alone is already creating uncertainty at the state’s private schools. “Enrollment is in jeopardy, capital projects have been put on hold and campuses are making plans for a series of layoffs in the coming months to close potential gaps,” she said.

In February, leaders of several Westchester County private colleges, including Pace University, Iona College and Manhattanville College, met with The Business Council of Westchester to discuss ways to oppose Cuomo’s proposal. Private college leaders are pushing legislators in Albany to instead fund an expansion of the state’s Tuition Assistance Program or TAP awards from a maximum contribution of $5,000 per student to $6,500, while also increasing the maximum annual household income level to qualify for TAP from $85,000 to $125,000. Assembly Republicans have proposed a plan that would do just that.

More than 940,000 families could qualify for Cuomo’s plan to provide free tuition at state and CUNY colleges and universities, including two-year schools, according to estimates from the governor’s office. Cuomo estimates the plan would cost about $163 million annually once fully phased in, based on enrollment projections.

The study also questions that cost estimate, saying the “true cost” will be much higher if the state considers the possible reduced state tax revenue, higher student demand and state costs per student at public schools.


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