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DOCUMENT RESUME
HE 012 194
ED 180 411
McCoy, Marilyn: Halstead, D. gent
AUTHOR
Higher Education Financing in the Fifty States.
TITLE
Interstate Comparisons, Fiscal Year 19764 Review
Edition.
National Center for Higher Education Unagement
INSTITUTION
Systems, Boulder, Colo.
National Ins. of rducation (DHEW) Washington,
SPONS AGENCY
D.C.
Sep 79
PUB DATE
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Compatative Statistcs: *Educational Finance;
DICPIPTORS
*Fnrollmert Trends: *Higher Education: *State Aii:
*Tax Support: *Trend Analysis
ABSTRACT
A profile of en.'ollment and fiscal trends in the U.S.
for fiscal year (FY) 1976 is Frovidel. An introductory chapter
dQtails the rationale for the study, the design, and an analysis of
states,
the data. The second chapter cites aereral trends among the
giving state rankings. Tr the third chapter state-by-state Deports
of major aspects of the
are provided in three parts--a cemmentarv
analysis of state
state's higher education financing profile, a trend
and local appropriations to higher education, and a financing diagram
showina the status of the state and local higher education funding
frIr FY1976. Amona general firdinas were that the 50 states
FYI976 than FY1975 to match
appropriated 13.4 percent more dollars irr.
but that after adjusting for
an 11.5 percent increase in enrollment,
inflation there was a net loss of 4.6 percent in the purchasing power
but five states increased
per student. Other findings showed that all
appropriations and that public enrollment Increased i. all states but
Alaska. Data notes and sources, impnrtant data cautions, and a
description of the institution classification system, as well as
supplementary data about the states and a limited analysis of state
or FY1978 are appended. (HF)
and local appropriations
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Higher
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Fifty States
REVIEW EDITION
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Interstate Comparisons, Fiscal Year 1976
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Fifty States
Higher Education Financing in the
Interstate Compadsons Fiscal Year 1976
REVIEW EDITION
Marilyn McCoy
O. Kent Halstead
U.S. DEPARTMENT OF HEALTH, EDUCATION, AND WELF
NATIONAL CENTER FOR HIGHER EDUCATION
MANAGEMENT SYSTEMS
Patricia Roberts Harris, Secretary
Ben Lawrence, Executive Director
Mary F. Berry, Assistant Secretary for Education
Dennis P. Jones, Associate Director
INSTIATE
NATIONAL
OF EDUCATION
P. Michael Timpane, Acting Director
Program on Educational Policy and Organization
Marc S. Tucker, Associate Director
September 1979
Per sale by the Superintendent of Ducenneni5 U.S. Gaveritent Printing Claim Mu Widen, D.C. 20102
Library of Congress Cataloging in Publication Data
McCoy, Marilyn
Higher education financing in the fifty states
1978.
"Including limited comparisons for fiscal year
StatesFinance.
1. Education, HigherUnited
Halstead, D. Kent, joint author.
I.
Title.
II. National Institute of Education. III.
78-21570
379%1214'0973
L82342.M18
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON: 1979
Government Printing Office
For self! by the Superintendent of Documents, U.S.
Washington, D.C. 20402
Foreword
T. Edward Hollander
Chancellor of Higher Education, New Jersey
President, State Higher Education Executive Officers
1977-78
levels, and trends in sources of support. The reader may
trends in
The profile of State fiscal and enrollment
individuar
then undertake a more thoughtful review of
makers in
this report is especially timely for State policy
havino
States and compare his or her State with States
just
higher education. Its publication covers a period
comparable charaweristics.
education
preceding a major turning point for higher
NCHEMS published a report of State and local sup-
longer
when past enrollment and financing trends are no
This new study
port of higher education two years ago.
At no time
adequate indicators of future developments.
facilitates interstate
provides more detail and better
in recent history have higher institutions faced so ambig-
is particularly
comparisons. The State by State format
uous a future.
complexity of factors
usoful in bringing together the
will have
With this publication, State policy makers
State.
that influence appropriations in each
clearly
available new baseline data presented simply and
Financial and enrollment data presented by State
levels
that measure State fiscal effort, financial support
for 1975 and 1976 in comparative form will be most
and shifts
adjusted to eliminate the effects of inflation,
levels for
use ul for evaluation of State fiscal support
The major
in revenue sources and expenditure patterns.
public institutions, especially in relation to-public college
additional
focus of the report is public institutions, but
enrollments. Other such measures of State support ot
insti-
data are presented in Appendix B for independent
higher education as student aid, retention cata, propor-
fifty States.
tutions. Data are presented for each of the
tion of population enrolled in college and migration
useful
Indexes based on national averages are extremely
data are also presented in a format that facilitates com-
in facilitating interstate comparisons.
parison with nationwide averages. Finally, a brief but
her
Each reader, initially, is likely to turn to his or
pertinent text highlights and interprets the data for each
the national
State to determine its standing relative to
report to your careful
of the States.
I commend
variables as college-going rate, State
averages for such
review.
in appropriation
and local financial support changes
Foreword
BarbaraMehling
Chancellor, University of Missouri
Columbia Campus
tuition, gov-
amount of income from other sources (e.g.,
The publication of this status report on State and
quickly
ernment contracts, private gifts, etc.) can be
local appropriations to higher education -should foster
addressed with this study. While these group averages do
substantial discussion among institutions about current
mask important differences among institutions, they
patterns of financing. By including the most compre-
nevertheless represent an important broad-brush analy-
hensive set of statistics yet available about funding in
sis of an institution's financing profile, useful as a starting
the fifty States, this study provides institutions a con-
point to more 10- epth study.
crete base of information with which to assess their
While the stddy provides useful benchmarks for
comparative well-being. Because the figures have been
comparison of State and total revenues at all categories
indexed relative to the U.S. average, each reader is able
of institutions, the report els" looks at a number of fun-
to quickly interpret the data for their State.
damental conditions about the State--including
its
The report indicates that in fiscal year 1976, public
inherent wealth, tax effort, tax revenues, tax allocation
institutions were not able to keep pace with enrollments
to higher education, and the size of public and indepen-
and inflation in the funds they received from the State,
dent enrollments. These statistics are useful in either
losing an average 4.6% of their per student purchasing
reinforcing what we currently, perceive or in correcting
the general puolic
power. While these figures describe
our misimpressions of the State's ability and need to
individual
sector pattern of State appropriations, their
finance higher education and its effort in that endeavor.
impact on specific categories of institutions and in spe-
In so doing, the study provides a much needed context
cific States varied tremendously. Each institution will
for understanding and evaluating State efforts and
similar
want to look at data from their State to see how
demonstrates that amountability can exist for States as
institutions fared in State support. In addition, an insti-
well as for institutions. Every chief executive, academic
tution can use its own data to make comparisons of
and financial officer of a college or university should
their group of institutions in the State and with com-
review these statistics carefully as. background to their
parable institutions in other States. Questions about
discussions about institutional financing,
relative levels of State appropriations as well as the
9
iv
Foreword
State Senator H. A. "Barney" Goltz
42nd District, State of Washington
Chairman, Senate Hi Oer Education Committee
easily understood conversion model gives them extra-
State legislators are charged with the responsibility
ordinary force.
for setting public policy and making decisions on behalf
Legislators are particularly interested in compara-
of the total population which they represent. It is often
tive informationa fair and meaningful way to describe
assumed that the result would be the same if all people
how one state is doing in comparison to other states. The
could vote on each issue. Legislators are keenly aware,
information contained in this study, in its easily under-
however, that sometimes they will feel compelled to
stood comparative format, covering all fifty states will
vote a certain way even when their constituents appear
make it a valuable tool for every legislator required to
to be leaning in another direction.
make funding judgments for postsecondary education.
It is not uncommon to pick up conflicting signals
But in the final analysis this kind of information
in taxes
on a legislator's antenna. Calls for reductions
funding
must be more widely shared and understood by the gen-
are often matched by demands for increased
legislators will
eral public and taxpayer. While many
use
sometimes from the same persons. Some legislators have
this study as an important component of decision making
even been known to vote for all
appropriations and
and will explain their votes with facts contained herein,
against all taxes, but political credibility and politicat
an enlightened public will demand a worthy
legislative
actions.
success eventually demand responsible
performance from everyone. In both instances this
The grist for the legislative mill is information and
study makes a positive contribution to the legislative
methodology. Facts have a stubborn way about them,
process and to the public's self interest.
and a method for organizing facts into an accepted,
IMPORTANT CAUTIONS TO THE READER
This review edition of Financing Higher Education in the Fifty States is being distributed
various governors and
to selected members of the postsecondary education community and to
State legislators. Our purpose is to request recomplendations for improvement in the study
methodology and presentation of data for use by policymakers concerned with financing
will
public colleges and universities. Comments and suggestions obtained through this review
assist us in the preparation of a forthcoming edition of this book that will present fiscal year
1978 data.
The fDllowing precautions and explanations are emphasized to give reviewers a perspec
tive for their reading and to avoid any misuse of the data presented in this edition, partic-
ularly in current decisionmaking.
The data presented here are for 1976. Clearly, this information is dated and mainly
useful as background material. The data should not be employed in current decision
making regarding appropriation levels, formula funding, or the establishment of financial
profiles.
In developing this study, and through review of earlier work, a number of data corn
parability problems were identified. These mandate that extreme care be taken in making
inter-State comparisons of certain measurements. These comparability problems are dis-
cussed in detail in Appendix A, Section 2, and should be studied prior to reading any
individual State's profile.
A number of variations in the way States report data in postsecondary education
underly our concern regarding comparability. For example, in some States, the voca
tional education system is included within higher education; in others, it is a cymponent
of elementary-secondary education. Similarly, medical schools are organized and reported
others, they are integrated within a university.
as separate campuses in some States; in
Different State practices for debt financing and retirement system payments, and in en
rollment count also contribute to the comparability problems.
There is no "ideal" funding pattern recommended or implied in this study, nor are there
good" or "bad" connotations attached to State rankings. States differ so greatly that
many funding strategies can be considered sound.
Financing higher education is a difficult and complex process. This is reflected in the
study is more comprehensive
new approach to data presentation found in this study. The
dif
than previous work of this type in introducing such factors as student migrations and
ferent enrollment patterns, State and local government tax capacity and effort, the struc-
ture of the public higher education system, and institutional revenue and 'expenditure
details. Yet there are voids that can be filled only with locally supplied data. Thus, r
formation should be introduced into the analysis by knowledgeable State and local
officials regarding geographical orice differsnces, costly versus less costly academic pro-
grams, competition for State n.oiries and traditional funding priorities, history o! taxa-
tion, specialized accounting practices, and the role of the private sector.
The breadth of information required for sound funding decisions suwests that many
different points of view in higher education be taken into consideration. It is therefore
recommended that the analysis and interpretation of this study proceed from the varied
perspectives of postsecondary institutions, State commissions, the legislative and execu-
tive branches, the public, and student clientele.
Proper interpretation and assessment of financing higher education requires study of each
State's entire data presentation. Isolation of a single measure or attention to a limited
State ap-
segment is likely to be misleadirig. One example is the current popular focus on
propriations per capita, a measure that ignores the different needs for funding represented
by enrollment levels, the varying taxing ability of States, different strategies for utilizing
tuition versus appropriations, and numerous Other factors that determine and usually
justify variations in per capita support. Readert are urged to become thoroughly familiar
with their State's entire financial picture before attempting evaluation of any specific
operating level.
Recognizing the importance of budget decisions and resource allocations that may be in-
fluenced by subsequent editions of this study, and the critical need for valid comparative
the authors request your constructive commentary on the study design and
procedures,
statistical detail. Please send your comments to the authors in care of NCHEMS, P.O. Drawer
P. Boulder, Colorado 80302.
As a follow-on to this review, NCHEMS will convene a group of financial experts and in-
stitutional and State representatives to examine this study and provide detailed recommenda-
are also underway. Both activities should aid
tions. Efforts to improve national data collectio
materially in the further development of this report.
Preface
This report has been jointly sponsored by the National Center for Higher Education IV
agement Systems (NCHEMS) and the National Institute of Education (N I E). We acknowle
with thanks this financial support and professional encouragement. The data have been provi
primarily by the National Center for Education Statistics. The improved quality and timeli
.
of the NCES data tapes has provided an essential building block for the study. Computer
gramming was performed largely by Ellen Cherin, with the assistance of David Makowski.
both these individuals, but particularly Elk.A, we are especially indebted. We also wish to th
Paula Dressler for her tireless efforts in typing and producing this report. She has wor
steadily to carefully provide accuracy in both data and text.
This report on financing in the fifty states has evolved from earlier work by both auth
Kent Halstead in Statewide Planning in Higher Education (1974) identified various inch,
related to higher education financing and the socig*onomic status of States that are use
this study. His work Tax Wealth in the Fifty States '(1978) provides the tax capacity, tax eff
and tax revenues measures used. Also, adjustments for inflation are based on his annual Hit
Education Price Index (HEPI). Finally, the appendix presenting limited comparisons for 1
is largely based on earlier similar work by Halstead appearing in the Chronicle of Higher Eck
tion (October 25, 1976). Marilyn McCoy in her work with the Statewide Analysis Task Fc
at NCHEMS (including Halstead) developed the basic data system and framework used in
report. The members of that task force provided invaluablq suggestions and comments in
evolution of the predecessor of this study published as State and Local Financial Suppor
Higher Education 1973-74 and an earlier version for 1972-73.
While this previous work established elements and a background for the current rep
much new work has been done to establish a more easily understood framework for anal.,
Most important has been the development of a financing diagram which interrelates the vari
enroliment, State financing, and education system factors. Now, all the information abot
particular State is presented in a double-page spread of charts, graphs, and text comment
This approach provides in a single location the critical factors influencing State financinE
comparative terms.
It
is intended that this study be updated every other year. The 1978 fiscal year rer
should be published in 1980.
Recommendations for improvement in format or analysis
encouraged.