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Previous studies depict higher education as a “balance wheel” for state budgets, as the sector often faces larger cuts during recessions than other fiscal areas (Delaney & Doyle, 2011). The economic downturn resulting from the COVID-19 pandemic resulted in similar outcomes across 26 states that cut appropriations to varying degrees (Laderman & Tandberg, 2021). However, this result also suggests about half of states were able to introduce minimal to no cuts. The current study aims to understand underlying state factors influencing divergent responses to funding higher education during the COVID-19 pandemic through a comparative case examination of two states—California, which introduced the largest cut to higher education funding nationally, and Texas, which made minimal cuts overall.