In order actually to solve a problem, you need to understand it, which it isn’t at all clear that Louisiana’s Legislative Higher Education Funding and Formula Task Force does.
As the landscape of higher education continues to change, senators thought it would be a good idea to review the outcomes-based funding formula. It’s a good idea, considering the challenges funding for higher education faces, beginning with the fact of the “demographic cliff” in the country, or that traditional-aged college students will fall in number nationally over the next several years.
At the hearing last week of legislators and higher education officials, other presumed variables were presented that could impact funding: increased workforce development demands, higher price inflation, escalating costs of intercollegiate athletic programs, and reduced federal financial aid. On top of all of this, one official argued that supposedly higher education fell over $800 million annually short of necessary, although it was not explained how that figure was derived but presumably through the lens of the existing formula of 70 percent basic, 30 percent outcomes.
Unfortunately, although perhaps this will be addressed at future meetings, much context was left out of presentations, beginning with certain truths about both higher education revenues and expenditures. The panel heard about just one comparative hard datum point, that total state appropriations (general fund plus dedications plus financial aid that includes the entitlement programs Taylor Opportunity Program for Students and M.J. Foster Promise) per full time equivalent student was the fifth lowest among the states.
Not only is that misleading, it also is incomplete. It glosses over two crucial facts: the state ranks somewhat higher in such dollars for senior institutional spending, eighth, because it ranks at the very bottom for that spending for junior institutions, and it ignores total spending FTE where Louisiana ranks second lowest but in large part because tuition revenue for senior institutions is only seventh highest while that for junior institutions is in the middle of the pack – and this doesn’t include the entitlement programs for each, dominated by TOPS which stretches the four-year advantage even further.
In other words, if arguments are going to be made stumping for more money from taxpayers, it conveniently helps to ignore the fact, relatively speaking, it’s a much more legitimate problem when discussing community colleges than universities, especially in that university students pay relatively much less compared to their peers in other states – and that the state ranks near the top in FTE terms in distribution of financial aid because of TOPS. You cannot argue about a taxpayer allotment formula in isolation without knowing the larger context, and the larger context is that students particularly at senior institutions don’t pay their fair share of tuition compared to their peers, especially because of TOPS. That needs to be addressed first before any formula changes increase taxpayer subsidization.
Thus, three other exogenous factors need addressing in conjunction with formula adjustment, beginning with TOPS. As long argued in this space, this redistribution scheme needs converting from an entitlement program assisting many barely-average high school students into a true scholarship program which would spend fewer taxpayer dollars but far more efficiently, leaving over some for other higher education needs.
Next, the true impact of the cliff needs genuine understanding. It’s out there, but it will impact states differently. In fact, Louisiana is forecast (along with southern states generally) to be among the most lightly impacted. In reality, under a current best estimate, it means the state, which since the turn of the century has seen its student population creep ahead by less than three percent, will see only a predicted four percent drop up to 2040.
And that may be pessimistic. These aren’t the Democrat former Gov. John Bel Edwards years where an emphasis on growing government to increase wealth redistribution caused demonstrable economic falling behind if not retrenchment, with a population loss into six figures, and in the process beggared higher education money masked by a firehose of debt-fueled national government grants under Democrats. But that all has changed with Republican Gov. Jeff Landry’s agenda, whose years in office to date have featured the start to right-sizing state government and economic advancement, significant economic development, and a reversal of population loss. These bode well for enough growth to turn enrollment changes going forward positive.
Yet there remains a truism that no policy-maker has shown to have a stomach for resolving and which has the biggest impact on funding: the system is overbuilt and top-heavy. What dollars get pumped into higher education, regardless of source, don’t go as far as they should because these prop up too much infrastructure and too many duplicative salaries. As a case in point, Texas, with seven times Louisiana’s population and just under five times its FTE undergraduate population, has 45 public universities – just over three times Louisiana’s number, which has the same number of distinct community and technical colleges as it does senior institutions where university FTE students outnumber junior institutions’ metric about 3:1. By contrast, Texas has under six times the number of junior institutions than does Louisiana and those student FTEs exist at 79 percent of that of senior institutions.
To rephrase, in Louisiana too many senior institutions chase too few students and of that limited bunch poach those that should go to junior institutions. Making the easiest solution the turning of some senior institutions – such as Southeastern Louisiana, Nicholls State, Northwestern State, and Louisiana State University Alexandria given their locations near larger/more comprehensive institutions – into community colleges. Better still, merge some within 30 miles or fewer of each other – Louisiana Tech, Grambling, and Louisiana Monroe all together, and Southern University New Orleans with Louisiana State University New Orleans.
Regrettably, that won’t happen with the politics of having big appropriation sinks in legislative backyards, but it would stretch dollars further rather than ask for more to be deployed inefficiently. These are the kinds of issues that first must be tackled before reconstructing a funding formula that otherwise asks to consume more money for more inefficient deployment that does taxpayers no good.
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