The series of tuition increases imposed last year at Maryland public universities emerged as a defining issue in discussions over the future of higher education funding in Annapolis yesterday.

Leaders of the state's university system told legislators they need a more steady level of public funding to avert the need for sudden tuition increases, as happened last summer in response to state budget cuts. With in-state rates for undergraduates now the sixth highest among public universities across the nation, "we are too high," said system Chancellor William E. Kirwan.

But several lawmakers are looking at the same double-digit percentage increases as a reason to impose new regulations on the cost of higher education. One bill proposes to limit the rise in tuition to the rate of inflation, while another would allow universities to phase in higher rates only with each entering class.

"Our goal is to make it possible for working families to still send their children to the University of Maryland," said Del. Herbert H. McMillan (R-Annapolis), sponsor of the bill seeking to peg increases to inflation. McMillan argued that the schools must curb costs by "making necessary housekeeping changes" before they can earn a new influx in funding.

Senate Democrats, however, are planning legislation that would strike something of a middle ground: limiting tuition increases to 4 percent a year, but only as long as state funding increases by 5 percent. "We get what we pay for here," said Sen. Brian E. Frosh (D-Montgomery). "If you cut the university's budget and then tell them they can't raise it through tuition, you're providing access to mediocrity."

A similar round of large tuition increases at Virginia's public universities last spring also is spurring discussion among lawmakers there. While Gov. Mark R. Warner (D) unveiled a tax overhaul that would provide colleges an additional $144 million over the next two years, three of the state's leading institutions are promoting a plan under which they would sacrifice some future increases in state funding in exchange for the ability to set their tuition rates.

Maryland's universities enjoyed generous increases in state funding through the 1990s, part of a larger effort to enhance their national stature. The increases evaporated two years ago, though, as the state's economy took a tumble. Last year, the institutions' budgets were cut by about $120 million; officials responded by eliminating several hundred jobs and raising tuition as much as 21 percent.

At the University of Maryland, the flagship campus in College Park, in-state undergraduates are paying $6,759 this year in tuition and mandatory fees, up from the $5,670 advertised a year earlier before a 5 percent midyear increase.

Some Republicans, including McMillan, have charged that waste and extravagance lie at the heart of the crisis. In an interview yesterday, McMillan noted that tuition had risen steadily, by about 4.5 percent a year, even during the era of bountiful state funding. He suggested that the institutions may be top-heavy with overpaid administrators. And he argued that they are undercharging out-of-state students, who are paying $17,433 at the College Park campus this year.

During a hearing yesterday before the Senate Budget and Taxation Committee, Kirwan and other officials said they are conducting an extensive review of the system to search for inefficiencies.

They argued, though, that their staffs are leaner than those in most other states, with one administrator for every 97.1 students, compared with a national average of one for every 67.6 students.

They also said their faculty salaries are competitive but not extraordinary for academia.

McMillan's bill, which has 12 co-sponsors, would cap tuition increases for the next two years. He said he is considering introducing a bill that would ban midyear increases as well.

Kirwan decried the proposal yesterday, saying it would force deeper cuts and hurt the quality of the institutions. "I thought we'd come to understand in our country that price controls don't work," he said. "That's what it would be."

A bill introduced by Del. Robert A. McKee (R-Washington County) would impose a policy of staggered tuition rates, in which each entering class would be guaranteed to pay the same rate every year. Illinois instituted a similar measure last year.

"I'm looking for a way that doesn't tie the hands of the universities" but allows families to count on predictable tuition costs, McKee said.

Kirwan said McKee's proposal merits study. He warned, though, that in a fiscal crisis, the system would be forced to place the burden of an outsized tuition increase on a single entering class.

Frosh's proposal, which he said will have 24 co-sponsors in the Senate, would require the governor to provide a steady level of funding for higher education, similar to provisions made for some health programs and elementary and secondary education.

"It provides for a reliable stream of funds for the university and a reliable set of obligations for students and their parents," he said.