Ivory Tower Can’t Blame State Taxpayers

In a House Education and Labor Committee hearing yesterday, higher education experts asserted that schools have had to constantly raise tuition well in excess of inflation because states keep short-changing them on funds. Indeed, Cal State Long Branch President F. King Alexander suggested that in order to rein in costs, Washington should cut higher ed funding to states that cut their own funding. In other words, he said that the feds should only lavish more taxpayer money on universities in states that themselves lavish more taxpayer money on them.

The problem with the “states are cheap” argument is that it’s utterly false. Public college prices have risen at the same time that state and local funding has grown.

Let’s look at absolute state and local funding. Using the latest available federal data and adjusting for inflation, state and local spending rose from $40.1 billion in the 1980-81 academic year to $69.9 billion in 2000-01, a 74 percent increase. According to data from the College Board (figure 6 in the linked report), during that same period the inflation-adjusted published cost of tuition, fees, room and board (TFRB) at four-year public institutions rose from roughly $7,000 to about $10,000, a 43 percent increase. So prices at public institutions rose at the same time state and local appropriations were increasing.

Perhaps, though, funding is a problem of reductions in spending per-pupil. Perhaps state and local support has risen, but not kept up with increasing enrollment. Using data from the State Higher Education Executive Officers (figure 3 in the linked report) we see that there is a little more support for the ivory tower’s complaint that schools just don’t get enough public funding — but not much more. State and local appropriations are clearly cyclical, rising as a result of good economic times and decreasing in response to bad. But it is also clear that there has not been a general decline in state and local funding per-pupil. Indeed, in the 1980-81 to 2001-01 period we explored earlier, the SHEEO data show that inflation-adjusted public funding per full-time equivalent student rose from $6,517 to about $7,371, a 13 percent increase.

So what does all this tell us? Pretty simply, the same thing former Harvard University President Derek Bok wrote in his book Universities in the Marketplace: “Universities share one characteristic with compulsive gamblers and exiled royalty: there is never enough money to satisfy their desires.” Including, especially, taxpayer money.