Explaining State Spending on Higher Ed

New study tracks variables affecting appropriations for colleges and universities over a 20-year period.
October 11, 2007

Public colleges and universities rely to varying degrees on state appropriations for their fiscal futures, and depending on the institution, they tend to engage in a range of lobbying and outreach activities proving their value to their states and citizens. But in an analysis of factors that determine levels of state support for higher education, researchers find that statewide circumstances -- as opposed to variables under a college’s control -- are the primary determinants of state spending.

“[D]espite their efforts, institutional lobbyists may have limited impact in states with poor state economies, intense budget competition, and history of poor support for higher education,” David J. Weerts, an assistant professor of higher education at Florida Atlantic University, and Justin M. Ronca, a research associate for the Wisconsin Center for the Advancement of Postsecondary Education, write in their paper, a modified version of which will be presented at a forum on the University of Wisconsin’s Madison campus today.

"No matter how great of a lobbyist you are," Weerts says, "it depends on where you're sitting."

The study, “Determinants of State Appropriations for Higher Education from 1985-2005: An Organizational Theory Analysis,” considers the effect of 43 different variables on state appropriations at 1,053 public institutions nationwide, all enrolling undergraduates and offering at least an associate degree. The authors divide the variables into three main categories -- “rational” or data-driven perspectives (i.e. when the tax base increases, so might appropriations), political perspectives (what the people in power decide) and cultural perspectives (the role that historical and social values play in influencing education spending).

Relative to the former two categories -- rational and political perspectives -- the authors find a mix of surprising and unsurprising results. Unsurprisingly, they find that state appropriations tend to be higher in states with higher per-capita income levels and lower in states with higher percentages of unemployment. They also write that state funding for higher education decreases as per-capita spending on corrections, health care and K-12 education grows.

Surprisingly, Weerts and Ronca find that appropriations for higher education are actually lower in states with larger college-aged populations (one possible explanation they suggest is that these states have a smaller proportion of citizens contributing to the tax base). Another finding that contradicts conventional wisdom -- and past research -- suggests that increases in appropriations are associated with Republican rather than Democratic governors.

But the cultural climate of the state -- how many students are in private colleges versus publics, taxpayer trust in public agencies more generally, and the basic "fact that some states simply value public higher education more than others" -- may be "among the most compelling" explanations of varying levels of state support, the study finds.

The analysis supports past studies finding that previous appropriations are the best predictors of future support, and that “[p]rogressive states with a history of supporting higher education in a state are likely to keep this tradition.” While institution type is a significant variable -- in short, community college support is most stable -- the researchers still find that funding patterns for research universities and community colleges within a state are more alike than for two flagship universities in different states. “[A]lmost none of the variance in our analysis is explained at the institution level.”

Institution-level variables considered in the study include land-grant status, private gifts and contracts received, and full-time undergraduate enrollment. As Weerts and Ronca point out in their literature review, attempts by college leaders to maximize state appropriations by increasing enrollments or private giving -- such as in Florida, for instance, where the state provides matching funds for private gifts -- seem to have mixed or unclear results.

However, Weerts adds the important caveat that one explanation for the small role played by institutional variables in shaping state spending is the difficulty of capturing institutional differences in, well, "a nice, neat, little variable."

“One of the limitations that we really pound home is we don’t know if it’s because we just didn’t have enough [institutional] variables assigned," Weerts says of the findings. In a follow-up study to be funded by the Spencer Foundation, Weerts plans to conduct qualitative case studies to determine why certain institutions receive higher or lower levels of state support than the analytical model would predict.

“The qualitative research really would help to supplement what the quantitative data tell us," says Donald E. Heller, director of Pennsylvania State University's Center for the Study of Higher Education. The main obstacle for all those conducting this type of research, Heller says, is precisely the problem of condensing cultural phenomena into quantifiable chunks of data.

"The individual politics of the state is not something you can capture by who’s in control of the legislature.”


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