In the past decade, Lansing policymakers spent more than $15
billion of state tax money on state universities. Legislators are currently
discussing whether to put as much as $1.63 billion more into the pot. That
spending, by the way, is more than what the Michigan Business Tax has brought
in to the Treasury so far this year. But few ask what taxpayers get in return
for this annual appropriation, and fewer still ask whether the state can get
more for less.
One of the biggest changes in higher education lately has
been the growth of overhead employment. The number of administrators and
service staff in Michigan's 15 state universities increased from 19,576 in 2005
to 22,472 in 2009. And in addition to all the new employees, average
compensation increased by 13 percent as well.
Total noninstructional, nonresearch expenses in Michigan's public
universities increased $683.7 million since 2005, though appropriations remained fairly constant.
Larger support and administration may be necessary for
growing universities. But increases in support staff have yet to be justified
by a proportional increase in enrollment. Total full-year equivalent students
increased from 250,030 in 2005 to 257,230 in 2009.
Michigan is not alone in the rise of university overhead. A
report from the Center for College Affordability and Productivity shows a 20-year
rise in administration and support staff.
When asked about what students get out of increased administration and
support staff, CCAP analyst Daniel Bennett responded: "higher costs and more
bureaucratic red tape."
Those higher costs
are largely paid by students, because state higher education appropriations
have been largely stable over the past decade. However, overall revenue from all sources grew rapidly at Michigan's public
universities, from $4.2 billion in 2005 to $5.0 billion in 2009. The gain is
largely from higher tuition and fees.
It's difficult to imagine many university officials getting
excited about increasing costs to students. But it has happened just the same.
Politicians should be thankful that there are a number of ways to lower
taxpayer funds without cutting educational quality.
However Lansing policymakers feel about the ability of
universities to provide more bang for the buck has not resulted in much
difference in proposed taxpayer spending. A range of $1.56 billion to $1.63
billion is a pretty small range of fiscal austerity. Perhaps one reason why
legislators are discussing a minimum budget of $1.56 billion is because
anything less may run afoul of the federal
"maintenance of effort" restrictions placed on the state for accepting
federal stimulus money last year that supported higher education
appropriations. But these can be unpopular - if the state's working to make
higher education less expensive, shouldn't taxpayers also benefit?
When legislators are convening over how much taxpayer money
to drop on state universities this year, they might want to start asking what
they get for their large chunk of change. There are plenty
of questions to ask.
James Hohman is a fiscal policy analyst at the Mackinac
Center for Public Policy, a research and educational institute headquartered in
Midland, Mich. Permission to reprint in whole or in part is hereby granted,
provided that the author and the Center are properly cited.