A new survey finds far fewer state systems experienced midyear budget cuts this year for American community colleges, even in this challenging economic environment.

However, the analysis also shows serious finance and capacity issues remain for these institutions.

The financial outlook for community colleges is improving, but the two-year college systems in many states remain under significant stress, according to a survey being released today.

The study is based on a survey of state directors of community colleges, and is conducted annually by the Education Policy Center of the University of Alabama at Tuscaloosa.

Since the economic downturn started in 2008, community colleges (and the rest of public higher education) have been hit by many rounds of mid-year budget cuts, followed by flat or decreasing budgets, and the new survey suggests that this trend may be changing in many states.

Only directors in five states — Connecticut, Georgia, Hawaii, Louisiana and Wyoming — reported mid-year budget cuts in 2012-13. In 2008-9, two-thirds of states were reporting such cuts.

Looking ahead, most state directors are predicting increases for this year for community colleges, with the average increase projected to be 4 percent. Only five states — Georgia, Louisiana, Missouri, North Carolina and West Virginia — are projecting decreases in 2013-14.

The state directors report considerable worry about the ability of students to pay for college. Most states are projecting tuition increases, and a majority expect state student aid programs to either be cut or to increase at less than the rate of inflation for higher education.

Many of the state community college directors surveyed are expecting increased enrollment pressure as four-year institutions impose enrollment caps, and community colleges become the sole option for many students.