Paul Teske is dean of the School of Public Affairs at the University of Colorado Denver.
(These views represent the personal opinions of the author and may not reflect the position of the University of Colorado Denver or the University of Colorado system).
OK. So, while the Joint Budget Committee and the legislature still need to work on the budget a lot – they don’t have loads of options – and based upon Gov. John Hickenlooper’s proposed budget yesterday, we are now looking at the likely magnitude of cuts for Colorado in fiscal 2011-12. And it ain’t a pretty picture.
I am usually the one commenting on resource issues on this blog, and I guess I’ll be happy to maintain that role for awhile. But I suspect that we will be hearing a lot from districts, schools, teachers, and parents about what these cuts mean, and what $497 less per K-12 pupil means in the classroom, and what $877 less per higher ed student means. At a minimum, lots of cuts in jobs, programs like breakfasts and counselors eliminated, larger class sizes, etc., all at a time when we were already near the bottom of the nation in spending and programs.
Some on this blog think we have enough money for K-12, and just need to spend it smarter (like a game of limbo and “how low can you go,” I’m curious if those folks believe that there ever comes a threshold point where, yes, “money matters” (?)).
But, I’ve never seen a post or a comment that suggests we have enough money for higher ed. And, somehow, so far, I don’t see the nascent development of more for-profit private institutions of higher education (you know, the ones that have been in the news, of late) as an encouraging sign of the private sector’s ability to deliver higher quality at lower cost in higher ed.
If we are going to have a discussion about cuts and education budgets in Colorado, let’s get a sense of where we are right now.
I think the answer is pretty simple – we have a shortage of revenue. Our general fund budget in 2012 is almost the same as it was a decade ago, despite 700,000 new Coloradans getting services. Cuts don’t have to be the entire solution to budget-balance, over time.
The Associated Press reported last week that federal taxes are the lowest, as a percentage of personal incomes, since 1950, during the Truman administration.
In 1950, of course, we were fighting a pretty consequential and costly Cold War.
So the current, widespread notion that we are historically “overtaxed” by Washington, D.C. is simply not supported by facts. (I know there are other elements to federal spending, such as Social Security, but those involve direct and specific benefits in return for payroll taxes withheld). And income/wealth inequality has not been at the levels we see in the U.S. today since before we had a federal income tax, and with the extension of the tax cuts for higher income Americans late last year, their deal got even better.
In Colorado, taxpayers are fortunate to have very low taxes at the state and local level – 44th lowest in the US, in fact (and 49th as a percent of personal incomes).
So in historical and comparative terms, a Colorado resident in 2011 has some of the lowest combined federal, state and local taxes in the country and in the past half century. What we don’t have are very impressive K-12, higher ed, transportation infrastructure, health or other public services. Such lack of public infrastructure investment may partly explain the fact that our per capita personal income rankings have actually dropped over the past decade, from seventh in the US to 15th among the 50 states.
If we want an infrastructure that supports growth and economic development, in a state economy of $250 billion per year, we probably need to talk about raising taxes to pay for it. And, despite so much of the rhetoric on this issue and the slowly-recovering economy, now is a reasonable time, when our tax rates are historically and comparatively low. (And lots of other states are raising taxes to balance their budgets – in Oregon and Arizona by votes of the people, and in Illinois by the legislature, with lots more yet to come).
For a discussion of all this, and more, Dr. Mark Fermanich of the Buechner Institute for Governance has recently authored a report that assesses Colorado’s fiscal situation, and presents some options to consider.
Popularity: 27% [?]
Just before turning to Paul’s piece, I read an article on the costs of higher Ed which opens some questions about if the problem is solely on the revenue side. An excerpt follows, I recommend the entire piece (http://bit.ly/fwCJDi):
“For the past quarter-century, the cost of higher education has grown 440%, according to the National Center for Public Policy and Education, nearly four times the rate of inflation and double the rate of health care cost increases. The cost increases have occurred at both public and private colleges…Just 10 years ago the cost of a four-year public college education amounted to 18% of the annual income of middle-income families. Ten years later, it amounted to 25% of that family’s average annual income… Over the past 14 years the average debt for a graduating college student has doubled. Today the loan obligation of graduating seniors is more than $20,000 for public university grads and more than $27,000 for graduates of private universities. More than two-thirds of all college graduates have student loan obligations. The number of graduates in debt increased by 27% over just the past five years. And, not surprisingly, the default rate has grown each year.
I have no doubt that tution costs for higher ed have gone up over time, nationally. And, I can’t speak too much to the reasons for those increases at private institutions, except that to an extent, they can and do charge what the market will bear.
On the public side of higher education, with which I am much more interested here, one reason tuition has gone up in the past 20 years is the dropping share of costs paid by state revenues. In Colorado, tuition at public instituitons, on average, now pays about 3/4 of the costs, while the state pays 1/4. That state share is much lower than it was 20 years ago.
Even with that, tuition at my own institution (UC Denver) for a full time, in-state undergrad is about $6,000 per year. State support, about $2,000 per student, and dropping fast, is 48th among the 50 states. Is a cost of $8,000 a year, lower than many K12 annual costs per pupil, so outrageous for a university education, especially when the institution also provides research and other forms of service to the community ?
And, to be clear, I spent 15 years teaching and studying education issues in New York State. There, I never argued that K12 did not have enough money. At something like $13,000 per student, compared to Colorado’s $8,000, I didn’t think revenue was the problem – lack of reform probably was. Here, in Colorado, revenue is a real problem.
So, Alex, I guess my blog question in response to your very general comment is still: Do you think Colorado today has more than enough state financial support for its public higher education system ?
I have great respect for Paul, and I honestly am well out of my limited base of knowledge on Higher Ed, but if the cost of higher ed in Colorado has increased at just one-third of the above NCPPE estimate, it is close to a 150% jump in a generation. At a very uninformed gut level, it’s hard for me to then accept that this is a problem either caused or solved solely on the revenue side.
State comparisons are tough, and lead to a continual rising cycle so no state is below average. I’d be interested to know where the US stands compared to countries with similar GDP per head. My guess is we as a country, and Colorado as a state, are both well above the median (last time I looked I think we only trailed Luxembourg), but I’d be very happy to be proven wrong.
To Paul Teske, all I can say is “amen.” Colorado is reaping the whirlwind of the TABOR and Gallagher amendments. Could it be that we will finally have the fortitude to undo them, to de-Bruce and de-Dennis the state? Perhaps we’ll even do away with our dysfunctional “system” of amending our state Constitution willy-nilly. Those outcomes would ALMOST be worth the pain of this year’s budget cuts to education.
I agree, Linda. What can we do to eradicate the effects of TABOR? Is it revokable? Does anyone here know? I want to know more about this.
http://en.wikipedia.org/wiki/Taxpayer_Bill_of_Rights
(Behold the power of wikipedia to quickly inform the public.)
Here are my quick thoughts:
We need to be able to tax ourselves. Without the ability to increase taxes, public education funding keeps going down. Even though Colorado has grown economically since TABOR, I am not feeling the rewards of that growth in my Title 1 K-12 classroom.
If the other alternative is seeing this economic growth siphoned into classrooms via grants, here are the problems I have encountered with that scenario:
1) Few people on school staff with time AND expertise to write grants.
2) Grants specifically prohibit using funds to hire someone.
I would like to learn more about these issues. Alex, Paul, do you have some articles to which you might direct me?
So I guess Alex does believe, based upon national tuition increases over the past quarter Century that are higher than inflation, that Colorado’s 2011 state higher ed budget is more than sufficient, even at 48th in the nation.
Based upon my own discussions, that is a view not held by many in the Colorado education policy world. Indeed, the bipartisan Strategic Planning group that Governor Ritter and CCHE/DHE convened last year, which spent 9 months sifting through data, trends, ideas and expert input, believes that the state needs to invest hundreds of millions more to have a reasonable competitive higher ed system, and that this issue is a crisis.
I’ll leave the international comparisons for another blog.
Paul,
That belief is pretty clearly neither the language or sentiment of what I wrote.
Look, the easy thing to do here is for everybody (in Ed Policy and beyond) to agree that the only way to solve this is to increase revenues (taxes), and then quickly bemoan the current political climate in which raising taxes for higher ed is pretty much impossible. That way we can all avoid both unpleasantness and accountability, and smug in the shared knowledge that millions of additional dollars would make this all better we can continue to convene additional planning groups who label this a crises or worse, absolve ourselves of alternative solutions, and watch as absolutely nothing changes. That’s the pattern.
I personally think that there is a much greater chance of some progress on this issue if Higher Ed would be able to look at ways to reduce costs — possibly through different delivery models including enhanced technology, possibly through the hard admission that maybe Colorado is not well served by having ~29 public university campuses and pursue some consolidation in both programs and services — in addition to asking for increased revenues. But that is just me.
Does it help if I join the chorus and say that more revenue would help so that there is no dissent? Does everyone feel better now? Great. And now what?
Hmmm. What a sad situation for all concerned. There seems to be a problem. But, there are no answers. Tuition is going up and there is nothing to do about it. It is worse in other states. We all know (and knew, long ago) TABOR was a really, really bad idea and Douglas Bruce is for some reason, not counted among Colorado’s political elite. I wonder why. We could just allow the conservatives to defund higher education altogether. It’s what they really want.
It’s ok, Alexander. You have some ideas worth merit. Consolidation is a good idea. It will help the financial situation, somewhat. But will it cure the underlying issues? I think you would agree that in asking for more revenue, you would say, no. Are we willing also to defund and consolidate tiny rural public school districts? I mean, it might have made sense to have a school district of 100 in the 1940s but in the 2010s?? Are we willing to completely ‘think different’ how the public funds and delivers educational necessities?
It can be done. Few would have to lose their jobs. Those who would be threatened can be retrained. It wouldn’t look very different from what we have now but it would mean everyone from teachers to admin to politicians to unions would have to give up some control, some degree of power over others. All can win. No one needs to lose. We can save money but we would also need to make sure education funding is largely immune form the vagaries of economic misfortune.
I know, that sounds unrealistic. But let’s face something here–as funding goes down and class sizes increase and a general malaise settles over our public schools (and I guarantee you, kids pick up on teacher and adult vibes about how we are getting screwed), test scores will not go up. Then, the teachers will be blamed all over again and the sad, downward spiral of blame for failing schooling starts anew. What, this is all a self-fulfilling prophecy you ask?
Perhaps so. Is that not how our modern political system works? Public education is increasingly divorced from content anyway–it’s more about politicians and special interest groups making money and garnering votes form the gullible, low-information voter. Show me someone who is made to feel marginalized or slighted by the right-wing punditocracy, and I will show you a parent whose disillusionment about his or her own lot in life is projected through the lack of achievement of their progeny. This is the self-fulfilling problem we need to address, no? They don’t know what they don’t know but in a political democracy, someone has to pay… http://opinionator.blogs.nytimes.com/2010/06/20/the-anosognosics-dilemma-1/
Hi Jeffrey,
I’d obviously want to look at the specifics of any proposal, but I would be much more inclined to support additional revenue if it was accompanied by some other structural changes. Simply adding money to something that almost everyone agrees has structural problems is not, in my opinion, usually helpful over the long term.
I could not agree more on the inanity of Colorado’s local districts (and wrote a longer piece on it some time ago: http://blog.ednewscolorado.org/2010/08/29/loco-control/).
Lastly, a fascinating NYT piece on the value of elite colleges. I don’t pretend to be able to untangle the nuanced value of higher education among all stakeholders, but as a casual observer it does seem to me that there is a growing body of evidence that the benefits and costs are not well aligned, and this is part of what makes it hard to argue about how well/poorly Higher Ed is funded.
http://economix.blogs.nytimes.com/2011/02/21/revisiting-the-value-of-elite-colleges/
Paul is correct on all he wrote about here. However, let’s look at the issue from a broader perspective.
In the 1970′s I worked for CCHE and JBC on HE budgets. At that time HE received 24% of general fund budget, and health care received less than 1%.
Decades later, primarily because of unfunded mandate of Medicaid the state spends almost 24% of general fund on health care and under 10% for higher education.
Yes more tax money for higher education would be nice, but there are bigger causes and solutions.
The teaching load at CU and CSU in the 1970′s was 9 credit hours per semester. Now it is almost half that amount.
The pay of CU, CSU research level faculty has doubled in inflation adjusted dollars since the 1970′s. Twice the cost, half the teaching. Of course for many productive researchers this is a good tradeoff- but faculty course load reduction (student/taxpayer funded research) is provided to all faculties, not just those engaged in efforts that increase state or national productivity and global competitiveness.
Even in 1977 in my doctoral thesis on educational cost/policy I advocated diverse workloads for faculty to allow some to focus more or less on teaching and/or research by semester, by field, etc. Yet the more Marxist or equity culture of higher education means that a faculty member reinterpreting Shakespeare gets just as much research support as the bio-chemistry professor inventing new cures and products.
So we can dramatically cut higher education costs, in teaching, let alone the many times increase in administrative overhead per student since the 1970′s, especially at Research universities.
Meanwhile the fed’s provide unlimited loans to students which fuels explosive growth in costs while raising the question of whether any academic programs and degrees actually provide a positive Return on Investment (ROI) for students. This is creating the next national boom/bust cycle that will reward the banks and investors who make the loans, while increasing the pain of repayment on middle class students and taxpayers, just like the savings and loan crises, the dot.com boom, the housing boom, etc.
All of this has led to the largest transfer of wealth from the middle class to the richest 2% in world history. Progressive taxation on the super wealthy used to level this playing field, but that is gone with the wealthy paying an effective tax rate of 17% now, not the 70+ percent of the 1950′s-1970′s.
Children of the wealthy go to private schools and colleges so why do they care that what is available to the middle class is more expensive and less effective?
I would argue that losing a ‘class war’ is what underlies all of the blog posts above.
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