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Turmoil in Texas Over Higher Ed Reforms

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Recent higher education reform efforts in Texas, developed by the conservative think tank Texas Public Policy Foundation (TPPF) and championed by Governor Rick Perry, have many wondering how much damage might be done to one of the country’s largest and best public university systems.

The ‘solutions‘ proposed by TPPF, and marketed heavily by  board member and major Rick Perry campaign donor Jeff Sandefer, would dramatically shift even the state’s top research campuses away from research and toward teaching. They cast the student in the role of consumer, basing professor pay and tenure decisions primarily on teaching evaluations, replacing state support to institutions with direct grants to students, creating contracts between students and institutions, and maintaining a distinct line between teaching and research activities and funding.

Mike McKinney, Texas A&M Chancellor and former Rick Perry chief of staff, has already drawn national criticism for creating and publishing a ‘balance sheet‘ that measured the revenue generation of each individual faculty member based on salary, teaching, and grant awards. This exercise, promoted by the Governor and TPPF, resulted in a swift rebuke from the Association of American Universities (AAU).

Next, Governor Perry announced that he wanted institutions to create a BA degree that would cost only $10,000 (compared to the current average cost of over $31,000 at Texas public universities). Widespread skepticism of the ability to create a quality degree that would cost so little did not stop the state’s Higher Education Commissioner from embracing the idea.

Then, a senior fellow at TPPF was given a controversial $200,000 consulting position with the UT System. His appointment lasted 50 days before the concerns of the public, legislators and institutions led to his dismissal.

Now, UT System regents’ chairman Gene Powell has circulated a memo that calls for increasing UT enrollment by 10 percent per year for four years and halving tuition at the same time, moves he claims would make UT the best public institution in the country. These recommendations are in direct opposition to a blue ribbon panel that recommended enrollment at UT Austin be reduced to improve the quality of the undergraduate education there. Judith Zaffarini, chairwoman of the state’s Senate Higher Education Committee, has issued sharp criticism of Powell’s suggestions, saying that his goals are “mutually exclusive”  and “detrimental to the pursuit of excellence.”

As this battle rages, others in Texas are weighing in against the reforms, including  alumni and university boosters. Meanwhile, all of higher education is watching to see if Texas will allow one of the nation’s top public institutions, UT Austin, be so radically undermined.

UC System Boosts Nonresident Enrollment

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Last year, the UC Board of Regents increased the system-wide cap on nonresident undergraduate enrollment from 6 percent to 10 percent based on final recommendations from  the University of California Commission on the Future. Newly released 2011 UC freshman admissions statistics for all nine campuses show how aggressively UC has moved to increase nonresident enrollment as a result.

Like in Washington, steep state funding cuts have forced California’s public research institutions to rely more heavily on nonresident students who pay, on average, three times the price that resident students pay. As a result, the average percentage of nonresidents (international and out of state) admitted to UC campuses has increased sharply in just two years:

  • 2009: 11.6%
  • 2010: 14%
  • 2011: 18.1%

Note that at the ‘flagship’ UC campuses, Berkeley and UCLA, where the applicant pools are much deeper and acceptance rates much lower, the numbers are much higher. At Berkeley, 31.2 percent of admitted Freshman were nonresidents, and at UCLA, 29.9 percent were nonresidents.

However, the system anticipates that nonresident students will ultimately make up less than 10 percent of the enrolled 2011 UC system freshmen class due to an overall lower yield rate among nonresident admits, and due to the fact that the system offered 12,700 Californians who were denied spots at their preferred UC campuses the option of enrolling at the newest UC campus in Merced even though they did not apply there (this move also keeps UC in compliance with the Master Plan, which requires that the system admit at least the top 12.5 percent of California high school students).

UC notes that, like the UW, while they are increasing nonresident enrollment, they continue to hold nonresident applicants to higher academic standards than residents. They also point out that peer institutions such as the University of Colorado, the University of Michigan, and the University of Virginia continue to rely far more heavily on nonresident students,  who comprise  over one third of enrolled undergraduates.

While the move to increase nonresident student enrollment at public institutions is sometimes heavily criticized, the tuition rates paid by these students help institutions keep resident tuition down while maintaining the quality of education despite significant funding cuts.

Bleak Future for State Budgets Through 2060?

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A new GAO (Government Accountability Office) report released last week provides an update to an ongoing assessment of State and Local Government fiscal health. The GAO has been publishing fiscal simulations for the state and local public sector (in aggregate) since 2007, and their modeling has consistently shown structural problems facing state budgets into the future.

The April update notes that, absent major policy changes, state operating budgets will face continuing decline through 2060 primarily due, in the short term, to decreased tax receipts, and, over time, to rising healthcare-related costs (both for Medicaid and Medicare as well as to meet the cost of providing health benefits to state employees and retirees).

The report concludes that in order to close the ‘fiscal gap’ (estimated action required today to ensure long-term fiscal balance), the state and local sector would have to, on average, decrease spending or increase revenue by about 12.5 percent and maintain that change in each successive year.

The conclusions in the report reflect adjustments made  for costs and savings associated with the Patient Protection and Affordable Care Act (PPACA) passed by Congress in 2010.

See our previous post for links to sources that provide updated assessments of state budgets as they continue to evolve.

A Master Plan for Higher Ed in the Midwest?

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Earlier this week, the Chicago Council on Global Affairs released a new report authored by current professor and former  University of Michigan President James Duderstadt. The report, A Master Plan for Higher Education in the Midwest: A Roadmap to the Future of the Nation’s Heartland, chronicles the overall failure of the Midwest to transform itself from economic engine of the industrial age to being at the forefront of the knowledge economy.

Duderstadt identifies what he calls lifelong and lifewide education as the key to succeeding in today’s economy and in the future. Like many, he argues that more Americans will  increasingly need to access different forms and levels of education throughout their lifetimes if they are to succeed in a rapidly and continually changing economic landscape. The report lays out a roadmap for a newly imagined, highly collaborative, mission-diverse and better funded regional higher education system.

Duderstadt’s proposals include:

  • Broadening boundaries beyond the state, increasing collaboration between institutions and governments, and creating a more systemic perspective that integrates all of the entities that comprise a ‘knowledge ecology’.
  • Increasing higher education engagement with the K-12 system to increase educational performance and transition.
  • Facilitating movement between institutions in the region, but also emphasizing the importance of mission differentiation.
  • Adopting best practices from other countries, specifically highly successful European models including polytechnic universities and alternative ways of dealing with the transitional years of grades 11-14.
  • Shifting the funding paradigm for public higher education including a high tuition, high financial aid model, and  implementing differential taxing of future earnings as Britain currently does.
  • Expanding higher education, including the creation of new institutions focused on non-traditional students.
  • Increasing regional investment in R&D, strengthened focus on tech transfer activities, and investment  in cyberinfrastructure.
  • Rebuilding the perception that education is a critical public good that requires healthy investment and support.

Overall, Duderstadt imagines more autonomous institutions that can react quickly to a changing environment, are accountable to the public through specific and measurable performance targets, are adequately funded through higher tuition levels and increased public investment, are differentiated strongly by mission, and serve a much larger and diverse population of students.  He imagines that both public, independent, for-profit and new kinds of institutions will all have an important role to play in this system.

Duderstadt acknowledges the large influence of both the California Master Plan and the Bologna Process in the creation of his roadmap. He lays out next steps for a more detailed study and creation of an implementation plan, and also also allows his inner futurologist to to come out in the last chapter where he envisions how these system changes will  prepare the region to succeed in a longer-term future that will be transformed again and again by technological discovery and development.

Read at least the executive summary if you get the chance. And if you are interested in other imaginative proposals that have been put forward in the last year, check out a few of our previous posts:

Report Confirms Deep Cuts to Higher Ed Across US

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The SHEEO State Higher Education Finance report for FY 2010 was released last week. Unsurprisingly, it confirms that the same general pattern in Washington of deep state cuts to higher education funding coupled with steep tuition increases is being replicated in states across the US.

Report Highlights: National Trends

Nationally, on average, state support for public high education per full-time-equivalent (FTE) student declined by about 7 percent between 2009 and 2010, and, at $6,454 per student, is at its lowest level in 25 years. The reports notes that average increases in net tuition revenue of 3.4 percent per student partially offset these budget cuts.

These cuts comes at a time when enrollment continues to grow partly due to more citizens seeking out higher education during the economic crisis. Nationally, enrollment grew by 15 percent between 2005 and 2010. Even when state and federal and increased tuition support manage to stay whole or increase, the report notes that increasing enrollments continue to erode per student funding levels over time.

The report highlights the importance that state support continues to play in education related spending by public institutions even as tuition revenue rises. They acknowledge that this importance is sometimes obscured by the complex finances of large institutions that have many other (non-fungible) funding sources.

Ultimately, SHEEO purports that public and policymaker values are consistent with continued public support for higher education, and they are hopeful that investment will rise again once state budgets stabilize and improve.

Report Highlights: Washington State

SHEEO presents the following averages for Washington State higher education for the 2005-2010 period:

  • 12th in increased enrollment in public higher education (19.2%).
  • 30th in appropriations per FTE.
  • 40th in percent of net tuition revenue as percent of total education revenue.
  • 40th in total educational revenue per FTE.

These numbers are a testament to the comparatively low tuition rates enjoyed by WA residents combined with lower than average state appropriations.

Read the full report for more data, analysis, and methodological details.

New UW Website Centralizes Budget Information

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You might notice links for a new website, UW Budget Watch, popping up on UW homepages (including OPB and right here on the blog).

OPB worked with Web Communications staff to develop one website that would consolidate many sources of information relating to the state budget and how it has and is expected to continue affecting the University. You will find links to blogs (the absolute best way to get the most up to the date and timely notices) and other UW and non-UW websites, as well as many educational documents, messages about the budget from UW leadership, videos about the current funding situation, and information about related UW initiatives.

We have found sites such as this very helpful in keeping up to date with our peer institutions, and we hope that our page will be as useful for anyone interested in keeping up on the latest developments.

So, visit the page often and we will work hard to keep it updated!

March Revenue Forecast Reduces WA General Fund Budget by $698 million

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State Economic Forecast Council Director Dr. Arun Raha released the March revenue forecast today. This forecast serves as the revenue basis for the Legislature’s general fund budget in the 2011-13 biennium (FY12 and FY13).

2009-11 Biennium (FY10 & FY11)

While many economic indicators used in his analysis show tentative growth in 2011, revenue collections through March 10, 2011 were $85 million below expectations and growth through the next quarter will continue to lag expectations, contributing to an additional $80 million deficit in the 2009-11 biennium. Legislative leadership confirmed that an additional (fourth) supplemental budget will be needed to reconcile the new FY11 shortfall. The timing of that budget is unknown.

2011-13 (FY12 & FY13)

Weaker growth in several key sectors over the last three months prompted Dr. Raha to increase the projected deficit for the 2011-13 biennium by $698 million.  The Legislature will use a $31.9 billion revenue base for the General Fund State. For comparison, the Governor’s December budget was based on a $32.1 billion general fund state budget.  

While we anticipate the House will release their operating budget proposal next week, House leadership did not commit to a date.

The March forecast includes new data about the downside risks to our economy including the earthquake, tsunami, and risk of nuclear meltdown in Japan. Further, Dr. Raha states that the most significant threat to economic growth is the energy market.  He fears escalating gas prices will continue to erode consumer confidence, regardless of job growth. These downside risk factors overwhelm any upside risks (employment growth, consumer confidence, and commodity prices) by 10 percent.

Please check this blog regularly for state budget updates as they become available.

Chronicle Corrects UW Data

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Were you surprised to learn in the Chronicle of Higher Education this week that, in 2008, the UW received over $19,500 in state appropriations per student, the second highest rate in the country? Well, so were we!

Office of Planning Budgeting staff worked with the Chronicle to clarify that they were not reporting state appropriations per student, but what the Delta Cost Project calls the overall educational ‘subsidy’ enjoyed by students, which includes state appropriations but also other revenues such as gifts and endowment income.

The Chronicle agreed to revise the text of their chart to match the measure they were actually reporting, and they also wrote up an accompanying article to explain why the revision was important, using the UW as an example. Please read our brief for more detail and links to the revised publications.

We don’t think the overall ‘subsidy’ figure that DELTA produces by looking at IPEDS finance survey data is a very useful one when comparing institutions on education related funding per student, nor do we think that 2008 funding levels tell us much about where public flagship institutions are now, but it is very important that the Chronicle narrative now matches the data and the chart is no longer misleading.

Education Roundtable with US Secretary of Education Arne Duncan

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US Secretary of Education Arne Duncan joined Governor Chris Gregoire and legislative leadership today for an education roundtable. Duncan congratulated state lawmakers on discussing the issue of education reform, even through tough budget times. He further drew attention to the grave problems troubling education in the United States—a 25% national dropout rate, poor STEM education, the large number of students taking remedial courses, and gaping budget gaps, which challenge the adequate funding of education.

Of particular interest, Duncan commented on the current system of education governance in Washington, claiming: “Washington has eight different agencies with different strategic plans working in Washington and it’s very difficult for me to understand how having different agencies handling education…will transform education.”

Governor Gregoire has bills in both chambers to consolidate education governance into one Department of Education headed by the Governor. The plan would also consolidate many existing state education agencies into four primary education divisions: Early Years Division, K-12 Division, Community College and Technical Education Division, and the University Programs Division. All units would report to a new Department of Education Secretary.

Secretary Duncan reiterated President Obama’s commitment to investing in education despite the economic downturn, and gave examples of strategic programs and innovations the administration is working towards:

-Investing in Early Learning programs like Head Start, which studies have shown to improve achievement especially for disadvantaged students who do not have many educational opportunities at home

-Continuing the Race to the Top program which rewards schools for outstanding innovation and improvement in education (if approved by Congress)

Lastly, Governor Gregoire distributed a document describing how much it costs taxpayers when students “fall through the cracks” of the education system– by dropping out, taking remedial courses, or repeating grades–a number her advisers estimate at around $ 100 million a year. Though the problems facing education in Washington state and in the nation are indeed grave, it was encouraging to see lawmakers pause during a critical week to discuss education. As Secretary Duncan asserted, “our children cannot wait for the economy to bounce back”—education must remain a priority, despite the dire budget situation.