November 8 2012
Vicki E. Alger
Elementary and secondary education ballot issues were hot topics in nine states this week. Voters in eight states also decided important higher education questions. Citizens in five states decided whether to take on more than $1 billion in bonding debt to pay for campus construction and renovation projects. Voters in Arizona, New Jersey, New Mexico, and Rhode Island said ‘Yes’ to a combined $995 million worth of bonding. Maine was the lone state whose voters said ‘No’ to debt by rejecting an $11.3 million bond measure.
Obviously nobody wants students attending dilapidated campuses. Yet it’s worth considering better ways to finance what should be ongoing regular maintenance and operations. Responsible business owners plan for the future by setting aside funds for future growth. Colleges and universities can do the same.
On average, public two- and four-year institutions receive nearly $30,000 per undergraduate in 2012 dollars, consisting of roughly: $9,700 in self-generated income and gifts; $7,500 in state, local, and federal appropriations (excluding student loans); $6,800 in government grants and contracts; and $5,500 in tuition and fees.
Included in that $30,000 total is close to $1,000 worth of appropriations, grants, and gifts just for capital projects per undergraduate. So why are taxpayers being asked to spend more in the first place, much less in a way that adds significant amounts of debt interest?
A recent analysis indicates that over a fifteen-year period postsecondary administration grew more than twice as much as instructional staff. This is significant since well over 100 mid-level and senior-level administrative and non-teaching positions command six-figure salaries, compared to a handful of faculty positions that do. We should finance colleges and universities in ways that incentivize them to use existing resources better instead of coming back for more…plus interest.
Rather than states directing general (non-capital) lump-sum appropriations to institutions, those funds should be directed to undergraduates in the form of annual performance grants. Students who complete their programs on time would not have to pay back their grants; those who don’t, would. Directing just the state appropriation share to students (about $6,300 per undergraduate) would incentivize them to find the best programs at the best price. Importantly, the onus would be on institutions to keep their costs and tuition prices down over the long term—in part by saving for future capital projects rather than asking to use the taxpayer credit card.
Bonds were not the only higher education issue decided by voters this week. Among the more interesting measures was a plan to allow two state universities to invest part of their reserve funds in private companies. Ideas like this one may sound sensible at first, but Washington voters clearly had concerns about the wisdom of government entities betting on investment winners with taxpayer funds. (Arizona rejected a similar proposal in 2004.) And let’s not forget, the only ones who truly invest are the people who actually earned the money and accepted an investment risk appropriate for them. Government entities don’t “invest.” They spend other people’s money, so if one of their “investments” goes bad, those same government entities would come back to the taxpayers asking for more money. Conversely, even if those government entities did pick a winner, there’s no guarantee that they’d ask taxpayers for less funding in the future.
Admissions and related student residency issues rounded out the higher education ballot initiatives—and are likely to ignite ongoing debate and legal action. Maryland voters passed the Dream Act Referendum. A noteworthy change included in this act is extending the time for honorably discharged veterans to qualify for in-state tuition rates, from one year to four years. This is an important step since in 38 states as many as 250,000 returning veterans are being charged out-of-state tuition rates (which can be up to twice as much as the in-state rates) because they had been away serving their country. States should also consider enacting military education savings accounts (ESAs) to help maximize the benefits veterans have earned.
A controversial component of Maryland’s Dream Act is making undocumented immigrants eligible for in-state tuition rates under certain conditions. Opponents object that this is preferential treatment. Yet in 2011 the Supreme Court rejected that argument, letting a similar California law stand because the in-state rate is based on students’ graduation from an in-state high school, not their citizenship. Currently, a dozen states have similar laws granting in-state tuition rates to undocumented immigrants. Seven states ban the practice.
Oklahoma is one of those states, and this week voters again approved a measure to end preferential treatment based on race and gender in college admissions and other areas. In recent weeks the University of Oklahoma has been accused of preferential admissions practices based on applicants’ race. So too has the University of Texas, Austin. After decades of federal efforts to end discrimination, including 40 years of Title IX, it remains up to individual voters to decide how best to advance equal opportunity for all.
To see the higher education ideas being debated around the country, see the ballot summaries and results by state below.
Initiative Summaries and Results
Arizona: Passed Western Maricopa Education Center School Bond Measure
Voters approved a $74.9 million bond for new campuses for the vocational school and well as expanding community training centers. This was the second attempt in seven years to pass a bond measure for campus improvement projects.
Maine: Failed Question 2 (Community College Bond)
Voters rejected an $11.3 million bond for building “a diagnostic facility for the University of Maine System; for capital improvements and equipment, including machine tool technology, for the Maine Community College System; and for capital improvements and equipment at the Maine Maritime Academy.”
Maryland: Passed Question 4 (Dream Act Referendum)
Voters approved a measure making undocumented immigrants eligible to pay in-state tuition rates if they have met certain requirements relating to state high school or community college attendance and graduation, income tax filing, applying for permanent residency, and registration with the selective service if applicable.
New Jersey: Passed Question 1 (New Jersey State College Bond Issue)
Voters approved a $750 million bond for classroom and lab construction to improve capacity. This is the first time since 1988 that the state has borrowed money to fund higher education postsecondary institutions.
New Mexico: Passed Bond Question C (Higher Education and Special Schools Bonds)
Voters approved the issuance and sale of bonds worth $120 million for capital improvements and acquisitions. The measure also includes a property tax to cover the principal, interest, and related bond expenses.
Oklahoma: Passed State Question 759 (Affirmative Action Ban)
Voters approved a measure to banned preferred treatment based on race or gender in three distinct government areas: employment, education and contracting. In recent weeks the University of Oklahoma has been accused of preferential admissions practices based on applicants’ race.
Rhode Island: Passed Question 3 (Higher Education Bonds Question)
Voters approved a plan to allow the state to issue bonds and temporary notes totaling up to $50 million for academic building renovations and the expansion of health and nursing facilities at Rhode Island College.
Washington: Failed SJR 8223 (Washington Public University Investments Amendment)
Voters rejected a constitutional amendment allowing the University of Washington and Washington State University to invest public funds.