Prior studies have documented the pattern of decreased state funding for higher education in periods of economic contraction (i.e., the balance wheel phenomenon). This qualitative case study examines how policymakers in California and Texas made decisions about funding higher education at the onset of the COVID-19 pandemic, when policymakers faced an economic downturn. Data comprise 28 interviews with key state actors and 69 documents. The analysis expands prior understandings of how state policymakers make budgeting decisions that affect higher education by exploring how they perceive certain target populations as deserving or undeserving of state support. The study also sheds light on the tenuous relationship between policymakers’ views of higher education and their funding decisions.