$12 Billion Is a Refreshing Change…

I step away from the blog for a week and the president of the United States offers to send $12 billion to community colleges.

I may need to do that more often!

From what I’ve read, President Biden is proposing to include $12 billion for “infrastructure” for community colleges in his next major budget proposal. Depending on whether Congress can/will use the reconciliation process to get it through, the administration may or may not need some Republican support. All of which is to say, a lot can happen between an announcement and the actual passage of legislation.

Still, the fact that it’s even a serious proposal is a refreshing change. I’m heartened, too, to hear that they’ve learned from experience and plan to include a fairly robust “maintenance of effort” requirement to prevent states from just using the money to replace cuts. That matters for more than just the years that the federal money is available; state funding cuts tend to be sticky, and federal influxes tend to be fleeting. If you let states engage in such shenanigans, then when the federal money is gone, the baseline for state funding stays at the new, lower level.

I hope that community college leaders nationally think not only in terms of money, but also in terms of time. This money is likely to be around only for a short time, after which the old demographic and economic challenges (not to mention Baumol’s cost disease) will still be there. The best ways to use the money will be ways that situate colleges to be more resilient in future economic headwinds.

The most obvious ways -- and the ones the authors of the proposal likely had in mind -- are facilities for high-demand programs. In many settings, the major limiting factor for seats in allied health programs is the scarcity of clinical placements; simulation labs can help stretch the limited number of placements to include more students. Simulation labs aren’t cheap, but they can pay off for colleges in higher enrollments, and for communities in having more nurses, respiratory therapists and other health workers in the system. Many of the more vocationally oriented programs are capital intensive, so an influx of capital could help either get them off the ground or expand capacity.

But productive uses go way beyond that.

Energy efficiency and clean energy offer potential long-term reductions in spending from operating budgets, which is where the real crisis is. Utility costs are part of the overhead of running an institution; reduce those and you free up money for other uses. Some up-front spending on systems with greater efficiency can yield decades of savings in operating costs. Converting a temporary influx of dollars into a source of savings that continues to pay off for years to come would be excellent fiscal stewardship. It would also dovetail with the Biden administration’s focus on climate change, achieving a lovely twofer.

Some of the other potential uses are subtler. For instance, ERP systems -- the back-end software that runs registration and payment, for instance -- are notoriously inefficient, but also hard to change or improve. The ERP market is an oligopoly, with colleges paying too much for systems that still require a discouraging number of manual workarounds. I’d love to see some public sector support for developing an open-source public option for an ERP. (Years ago, I wrote a piece asking the Gates Foundation to support something like that; given where its money came from, I assumed that software would be in its wheelhouse. It politely declined.) The sector could fix that, given the right catalyst. As with energy efficiency, the payback would continue indefinitely.

Allowing colleges to use the money to retire long-term debt could help, too. That debt was typically incurred to pay for infrastructure, so it strikes me as in keeping with the spirit of the idea. Debt service payments come out of annual operating budgets, where they prevent hiring and student support. Eliminate those debt service payments, and we can redirect resources where they really should go. I know the politics of this one are a harder sell -- paying off existing buildings doesn’t lead to the construction boom of building new ones -- but if the point is to help colleges serve students, this could make a dramatic difference.

Ultimately, of course, operating budgets are the real issue. But efficiency gains that infrastructural changes foster would pay off in operating budgets for years to come, and in ways that allow colleges to focus the resources they do have on actually educating students. Twelve billion dollars could do only so much on its own, but if it’s used with an awareness of time, it could pay off for everyone for years to come.