Not Understanding Education Budget Cuts

From the Watertown Public Opinion:

State Board of Regents president Terry Baloun told legislators Monday that $17.2 million of recommended cuts in state funding likely will trigger increases in tuition and fees for students at South Dakota’s public universities in the coming academic year.

Baloun outlined for the Legislature’s Joint Committee on Appropriations two options under consideration. One is a 6 percent increase in tuition and fees, which would generate an estimated $7.1 million of additional revenue from students. The other is an 8 percent increase, which would produce an estimated $9.4 million.

Last spring the regents raised tuition and fees an average of 4.6 percent. That was an easing from the increases that had been averaging about 6 percent in previous years.

Why do tuition and fees need to increase?

I understand that the article speaks of a number of things which will be cut along with the increases in tuition in fees, but would it not make sense (in the interests of keeping the customers happy) to be willing to not increase the cost of the product at the very time when customers are least likely to be able afford that cost? Or, in a system without true competition (since non-state schools don’t receive the taxpayer funding) does this simply not matter?