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State
funding leads
toward privatization
By
George M. Dennison,
President, The University of Montana
Everyone
agrees that higher education must play a vital part in economic
and social development, but not everyone agrees that state
government must assign priority to higher education in preference
to other needs when state revenues fall. With growing need
and rising demand for access coupled with declining state
support, can public higher education fulfill its public
mission?
During
the '60s and '70s, when states appropriated a larger share
of their revenues to support higher education, the question
of who benefits from and who pays for higher education typically
elicited the response that the public should pay from 70
percent to 80 percent of the cost. As the late Howard Bowen
argued at the time, the public should pay the majority of
the cost because the public at large benefits most from
an educated and engaged citizenry, a productive labor force,
increased tax revenues, and the economic and cultural development
stimulated by the education, training and technology transfer
provided by higher education.
As
a trade-off for the sacrifices they make in foregone income
and the dedication of savings to pay for college expenses,
those who attend college receive incidental benefits in
the form of higher salaries, lifetime incomes and a higher
quality of life. This argument persuaded policy makers to
make the public investments in higher education that sustained
the growth during the '50s, '60s and early '70s.
Today
the question of who benefits and who pays elicits a different
reaction. According to the common response, the student
should pay the larger portion of the cost because the student
receives the major benefits in the form of a higher salary,
increased lifetime income and better quality of life. Without
question, the new argument rationalizes the reality of inadequate
state revenues to satisfy all needs.
The
pressures on state dollars have increased dramatically to
attend to the rising costs of health care, the demand for
an effective penal system, the escalating needs of K-12
education and the effort to refurbish aging infrastructure
such as transportation and water systems. Because higher
education has alternative funding from tuition and fees,
policy-makers shift the cost to the students and explain
tuition as a form of user fee. How often do we hear that
a college education pays because of the return on the investment
made by the graduates? But what about the public benefits?
What will happen if we ignore them for an extended period?
What about the return on investment by the society at large?
This nation attained its enviable world position because
of the commitment to public higher education.
These
developments have produced a drastic change in the finances
for The University of Montana. In 1992, the University expended
about $47 million to support the educational programs serving
some 10,000 students, with about $3 of state appropriated
funds for every $1 of tuition and fees. For 2003, the University
will expend about $97 million for the educational programs
serving about 12,000 students, but with $1 of state appropriations
for every $2 of tuition and fees. Those who discern a trend
toward privatization of public higher education have this
dramatic reversal in mind.
In
1992, the state provided fully 74 percent of the cost of
the educational programs, but will provide only 34 percent
in 2003. As a matter of fact, despite a doubling of the
budget for the educational programs during the years from
1992 to 2003, the University will have only $1.4 million
more state dollars in 2003 than in 1992, without taking
account of inflation, but with 2,000 more students to educate.
Fully 98 percent of the increased funding has come from
tuition and fees and private support, not from the state.
No other state has pushed privatization to this extreme.
Recognizing
that the public at large has little understanding of this
trend, leaders in the private sector have established The
Alliance for Montana's Future to inform Montanans that public
higher education represents an investment in the future,
not a drain on resources. This educational effort must continue
to make certain that all Montanans understand the critical
role of higher education in the maintenance of economic
and social well being.
If
people agree that public higher education has a special
role to play, they will have to choose from among three
alternative responses to trend: 1) continuation of the decline
in state support; 2) stabilization of the current level
of support; or 3) reversal of the decline and establishment
of an appropriate level of public support.
Whatever
the public decides, we in public higher education must control
costs, stand accountable for the prudent use of available
resources and sustain the public mission in service to the
people and State of Montana.
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