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The Town with No Tuition?

The Town with No Tuition?
March 3, 2009

Davenport, Iowa is one of a number of cities along the Mississippi River that brands itself as a gateway to the West. After a special election Tuesday, some of the city’s leaders hope it will be known throughout the region as a gateway to free college tuition.

The city’s voters decide today whether to approve Davenport Promise, a program which would provide college tuition to all local high school graduates starting this spring. To qualify, students would need only be Davenport residents and complete 400 hours of approved community service in the area. Private, parochial and home-schooled students would also qualify.

The program would provide students with about $20,000 – an award based on the cost of attending a local community college for two years and a state university for two more. Students, however, would not be limited as to where they could attend college and would be able to attend any institution – in- or out-of-state, private or public. Those who choose vocational training would receive an amount up to the tuition rate at the local community college, while those who enter the military would receive a $7,500 homestead grant upon returning home.

The program would be funded by utilizing “not more than 30 percent” of an existing one-cent local option sales tax. City officials maintain that capital projects also funded by this local option sales tax will continue uninterrupted and that only three planned parks are being “scaled back” to make room for the program. In an effort to assure voters that this program will not pass the buck to them through another tax, the city and the local school district have signed a joint resolution promising not to raise property taxes for this program.

Craig Malin, city administrator, is optimistic about the program’s potential as an engine for local economic development. He said he believes it will make Davenport more attractive to both families and business around the region. Though he acknowledges that Iowa has a problem with “brain drain” – and that the program does not require students to return or stay in the city – he said he doesn't think those who benefited from the free tuition would move away from Davenport after earning a college degree.

“One of the reasons college graduates leave Iowa is their increased debt burden,” said Malin, noting that many decide to leave the region to seek higher paying jobs in more metropolitan areas, such as Chicago. “This program is designed to retain those students. Still, even if we do lose a few 20-somethings, we’re sure to gain a few 30- and 40-somethings with families. Businesses and families will move for better education outcomes.”

The program was based on a similar one in Michigan called Kalamazoo Promise, although that program is funded by an anonymous private donor and limits students to state institutions. Since the program began in 2005, Kalamazoo’s public schools reversed declines in student enrollment, and the city has gained more than 3,500 new jobs.

Other leaders in Davenport, however, are not sold on the idea for philosophical as well as financial reasons. Ray Ambrose, a city alderman, said he does not believe it is within the purview of local government to fund students’ college tuition. He also questions the wisdom of this financial commitment in a time of economic uncertainty.

“This Promise program is poorly planned and financially irresponsible," Ambrose said. “We should not be taking money from a city budget to put toward a quasi-economic development tool to fund kids to go to college. This is just another big government program. The role of city government is clearly defined. Good neighborhoods, good school, a well-maintained infrastructure and low taxes – that’s the greatest economic development tool there is.”

Davenport has suffered harsher-than-normal winters both this year and last, and it has also recently been hit by three different floods. Ambrose said he believes funds from the local option sales tax would be better directed toward the city’s infrastructure, which he said is still reeling from this severe weather. He also called the city’s promise not to raise taxes in light of the program “a lie.” If circumstances call for it, he said taxes will be raised either directly or through related fees that, to his mind, equate to taxes.

Even some in local higher education question the program. Bill Lynn, city alderman and economics professor at St. Ambrose University, said he believes the program would only increase the area’s “brain drain” at the taxpayer’s expense.

“This is just killing the whole state,” Lynn said. “Students who live in Iowa get educated in Iowa and then leave. This is an extremely indirect way to facilitate economic development. If we want to do it, let’s do it directly. The most direct policy is best. Let’s subsidize companies to come here or give families $100,000 to build a home in the area. That would make a lot of sense. There are just a lot of problems with the program, and I don’t think it’s the job of a city to provide a college education. I don’t want to educate a lot of students so they can just leave town.”

Though the program would give some students the financial opportunity to attend college, Lynn also believes it would open them up to a whole new set of financial difficulties. He said students who accept money from this program may have to forgo federal and state financial aid. This could put some low-income students in a situation where their program money might not cover their full college cost and they would no longer qualify for other government financial aid.

As an oversight board would manage the annual distribution of funds, he said it is possible that the program might not cover full tuition in future, causing potential conflict between the city and recipients.

“If this passes, we’re stuck with it,” Lynn said. “With tuition on the rise, we’re not going to be able to keep up, ever. Then we’ll have some people saying, ‘I live here. Where’s my money?’ ”

These potential concerns are of minimal importance to Bill Gluba, Davenport mayor. Branding Ambrose and Lynn “libertarians,” he said he believes it is well within the local government’s duty to fund the program. Though the money given by the program might not always be sufficient to cover a student’s full needs, Gluba said he would take comfort in knowing that his government was at least trying something.

“If we have to reduce [the payout], then we have to reduce it,” Gluba said. “We’re going to do as much as we possibly can, but we’re going to have to make adjustments periodically. Everybody can nitpick at this program, but it’s more than [students] are going to get anywhere else. If you can’t get a meal, take a sandwich, you know? They know we have limitations.”

If the program is approved by voters, he said he believes it could catch on elsewhere in the country. In light of President Obama’s pledge to help all Americans attend at least one year of college, he said the time is right to experiment.

“No nation ever hurt itself by investing in young people or education,” Gluba said. “We look to be pioneering here. I’d love [for us] to be known as a community who believes in education.”

 

 

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