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Wednesday, May 13, 2015

State higher ed funding down 23 percent. Sure, let’s have another tax cut!

Posted by on Wed, May 13, 2015 at 11:28 AM

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So there’s this new report out today from the Center on Budget and Policy Priorities bemoaning all the cuts made to higher-education funding throughout the country since the Great Recession took hold in 2008. Adjusted for inflation, the report finds: 

  • Forty-seven states — all except Alaska, North Dakota, and Wyoming — are spending less per student in the 2014-15 school year than they did before the recession.[2]
  • States cut funding deeply after the recession hit. The average state is spending $1,805, or 20 percent, less per student than before the recession.
  • Per-student funding in Alabama, Arizona, Louisiana, Pennsylvania, and South Carolina is down by more than 35 percent since the start of the recession.
  • In 13 states, per-student funding fell over the last year. Of these, three states — Kentucky, Oklahoma, and West Virginia — have cut per-student higher education funding for the last two consecutive years.
  • In the last year, 37 states increased funding per student. Per-student funding rose $268, or 3.9 percent, nationally.

In North Carolina, this has led to a 23.4 percent per-pupil decrease in state higher ed funding (again, adjusted for inflation)—not nearly as draconian as, say, Arizona or Louisiana, but still in the top half nationally. As a result, in-state tuition fees, both here and nationally, have skyrocketed. At the University of North Carolina at Chapel Hill, for instance, in-state fees have risen 36 percent in just the last five years

Higher costs, of course, mean students have to take on more debt, which saddles the larger economy in the long term. And North Carolina has a long, proud and, if we’re not careful, eroding reputation as a place where higher-ed institutions and academic freedom are valued as ways to lure young professionals and the companies that desire them. 

As Cedric Johnson of the N.C. Budget & Tax Center said in a statement this morning: 

Smart investments in public colleges and universities will help to strengthen North Carolina’s economy. Communities with highly educated residents attract employers who pay competitive wages. Their employees then spend money in their community, boosting the economy of the entire area. That’s what North Carolina needs as our economy continues to recover from the damaging Great Recession.

I mention this in light of N.C. Senate leader Phil Bergen’s comments on how he wants the state’s surprise $400 million surplus spent

Berger ticked through a list of items he wants to see in the final document:

▪ End an annual transfer of highway tax dollars to budget items that aren’t related to transportation. …

▪ Double the state’s reserve funds, which Berger said are “severely underfunded.” …

▪ Set aside $350 million for a Medicaid reform package. …

▪ Increase starting teacher pay to $35,000, something both House and Senate leaders have been promising for months. …

▪ Cut taxes, including a switch to single sales factor apportionment for corporate taxes, which would effectively favor companies with extensive property and payroll taxes. … Berger said further cuts shouldn’t be limited to businesses. “Now is the time to focus on cutting the personal income tax significantly,” he said.

You’ll notice what’s not in there: ensuring that our public university system remains the envy of the region. In fact, before the surplus revealed itself, Gov. McCrory’s budget proposed a 1.2 percent cut for the entire UNC system. Community college fees, meanwhile, would increase 5.5 percent. 

Budgets, as is often said, are fundamentally moral documents—reflections of their crafters’ priorities. For the state Senate, it seems, cutting corporate taxes (in a manner that principally advantages companies with lots of employees and property) and lowering the income tax rate (which was flattened back in 2013 in a manner that principally advantaged the wealthy), takes precedent, even as per-pupil spending in this state has sunk by more than 23 percent. 

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