Avoid convoluted funding scheme with tuition increase
Why go to all this trouble? Peripherally attached to a budget somewhat contortioned, perhaps the most convoluted item of Gov. Bobby Jindal’s fiscal year 2016 effort is a request (not actually in the budget) that cuts in state monies for higher education could be offset partially by an extra fee put upon students, the cost of which would be claimable as a tax credit, financed by an increase in cigarette taxes. Why such a Rube Goldberg device when there’s a far less complex answer to bolster higher education’s resources?
Administration and higher education officials have put forth preliminary ideas on the subject, pegging an amount of $2,000 per student (per what unit of time left as of now unsaid, but it may be for an academic year), although that could vary by field of study and institution. Whatever structure it takes, for this to happen it would take two sets of two-thirds majorities in each legislative chamber, one to add the fee and one to increase the cigarette tax, while then needing a majority vote in each to introduce the tax credit. And then it would cost extra to administer the complicated thing and probably (the history of tobacco tax hikes show) take in fewer dollars than anticipated, meaning taxpayers pick up the tab to pay for the credits – which may not do much or any good for the small portion of households whose tax liability does not equal the fee.
The far more obvious and elegant solution to bring in more money to higher education is to raise tuition. As noted previously, with average Louisiana tuition and fees the fourth-lowest among the states and the District of Columbia for baccalaureate-and-above institutions and 39th overall for community colleges, with the state ranking in proportion of family income going to pay for higher education 38th and 32nd, respectively, with its former students having the lowest proportional student loan debt of any state in the south and among the lowest in the nation, and with a per capita income ranking 29th nationally, clearly the ability for Louisiana families to pay more for their members’ education is present – especially as historically taxpayers have disproportionately paid for higher education in Louisiana compared to the rest of the country. It’s time the major beneficiaries of higher education – the students themselves – pay their fair share as a response to the lowering of the taxpayer subsidy instead of finding another way to have a portion of taxpayers make up the difference.
Not only would this feature simpler, less costly administration, it also would be fairer than the Jindal plan. Any increase would vary with the service rendered, not being one flat fee. Also, it would be easier procedurally to put into effect, requiring just a single two-thirds majority legislative vote to allow an increase. With Louisiana having one of the lowest average in-state senior institution tuition and fees rates in the south, about three-quarters the regional average, and seven-eighths of it for junior institutions, even if brought up just to the average mark of the region, or about $1,650 and $340 a year, respectively, that would account for (applying that to out-of-state tuition as well, but not counting graduate student totals) about $238 million, more than offsetting the $211 million cut.
Yet the Jindal budget does not suggest across-the-board tuition increases, nor do any policy-makers, for three reasons. One is that the extra $238 million really would be just 80 percent of that total because of Taylor Opportunity Program for Students recipients getting their tuition footed by the state. And student numbers would decrease because higher tuition would encourage some to go to private schools, out of state, or to not attend any college, deflating this figure more. Still, it would be better than nothing, and the other reasons for rejection are peculiar to the governor and legislators and to higher education officials.
The elected officials don’t want to consider this because they think it will hurt their electoral chances. Even though Jindal is term limited, a possible bid for the presidency in the future has him acting on this issue like he did with his tax reform plan of two years past, the basic idea of which was very sound: trying to avoid making a policy change that might cost some people more money, regardless of the fact that they would be closer to paying their fair share of what they got as a result. Jindal may be reluctant to convey the impression that he would be responsible in part for these cost increases because he could be accused of making college more expensive than it is, despite its current bargain status. Legislators relevant to their own political careers in their current office or some other share the same sense of wishing to avoid electoral temerity.
Higher education officials do not want a blanket tuition increase (some express willingness to raise it on certain programs, more often graduate than undergraduate ones) because enrollment will go down – even though this will have the net effect of increasing money coming into schools – as this exposes even more obviously that Louisiana has an overbuilt higher education system, ranking in the top ten among states with institutions per capita and as a result in the top twenty for costs per capita. Keeping tuition relatively low gets more warm bodies into the classrooms and deflects from the fact that too many universities chase too few students – with the consequence of encouraging the most marginal and less motivated students to attend of having the seventh-lowest degree completion rate in the country (of 48 reporting states). Lower overall enrollment (which many think would not result from differential degree pricing as opposed to a blanket increase) would prompt more discussion of merging, demoting, and closing universities, with the loss of academic jobs, resources, and thereby administrator power.
So these attitudes lead to the gamesmanship of a fee unrelated to TOPS reimbursable by a tax credit funded by cigarette smokers, just adding another layer of inefficiency to the funding of and spending for higher education delivery. It’s far simpler to raise tuition to the regional average and begin plans for reshaping the overbuilt system, but this would run counter to the populist fantasy embedded in the state’s political culture of giving away stuff for everybody, of making the guy behind the tree pay.
If it would not, this would come close to closing the year-over-year funding gap. The ability of students used to heavy subsidization of their educations to pay is there. Just get on with raising tuition at Louisiana’s higher education institutions. It’s a great time to stop the madness instead of inviting in more chaos.
Posted by Jeff Sadow at 11:10