March 8, 2007

Rebound in Higher Ed Support

Measured in constant dollars and per student, state and local support for public higher education has been falling but rebounded in fiscal 2006, according to an analysis being released today by the State Higher Education Executive Officers.

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Faculty: 3,501
Administrative: 1,715
Executive: 162
FEATURED EMPLOYERS

According to the study, state and local support per full-time equivalent student was $6,325 in the 2006 fiscal year, a 5.1 percent increase over the previous year. Measured in constant 2006 dollars, the high point since 1980 was 2001, when per student support was $7,371.

“I think it’s encouraging that there is a cycle and we’re not in a permanent downward trend,” said Paul Lingenfelter, president of SHEEO, in discussing the results. “We are coming out of a tough period, but we should also recognize that just before that period we were at an all-time high.”

The new analysis from SHEEO also shows just how tough the last five years have been. In a period when enrollment went up by 14.8 percent, state and local support per student fell by 14.2 percent. Only seven states saw five-year increases in government support per FTE, held against inflation: Hawaii, Nebraska, Nevada, New Mexico, South Carolina, Tennessee and Wyoming. Seventeen states saw five-year decreases in appropriations per FTE that exceeded 20 percent: Colorado, Illinois, Iowa, Kansas, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, New Hampshire, New Jersey, Ohio, Oregon, Pennsylvania, Virginia and West Virginia. (Details are in table at end of article.)

Public colleges and universities made up some of that revenue gap with tuition increases. But even with revenue from tuition increases added, the five-year rate of change in constant dollars, total revenue per FTE was down 5 percent nationally.

There are a number of reports that analyze support for public higher education each year — the best known being the “Grapevine” study at Illinois State University, which has also noted a rebound in state support. The emphasis of that study (which the SHEEO researchers use) is on state appropriations. The SHEEO study focuses momre on such factors as enrollment growth and tuition revenue. Especially in recent years, when many states have been experiencing sharp increases in enrollments, the combination of more bodies and tight budgets has been particularly difficult for public higher education.

“Resources don’t mean anything out of context,” Lingenfelter said. Even if states know that they are experiencing enrollment growth, he said, “it’s hard for them to shift resources quickly,” so states go through periods like the last five years, when they are struggling to keep up. Lingenfelter said he saw this year’s increase as evidence of “the resiliency of the system.”

Another part of the recovery, however, is a slowing of enrollment growth, which dropped to 0.4 percent FTE in the last year, while government appropriations were up 7.6 percent.

The SHEEO report analyzes the sources and uses of government support for higher ed. Between 2005 and 2006, the share of state funds (including endowments and other non-appropriated funds) vs. local funds increased slightly.

Total Education-Related Revenue in 2006 Constant Dollars

On the spending side, general operating support and student aid saw increases while research and aid to private colleges saw proportional decreases.

Uses of State and Local Funds by Higher Education

Below are summary changes by state, showing changes in appropriations, tuition revenue and total education-related revenue, using constant 2006 dollars as the baseline.

Enrollment and Finances of Public Higher Education, 2001-6, in Constant 2006 Dollars

— Scott Jaschik

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