Monday, August 24, 2015

A New Name for a New Kind of University System - Part 1


A Constitutional Mandate

Pennsylvania’s financial support for “public higher education” in the State is mandated by its Constitution in Article III, Legislation, and Section 14 - “Public School System,” which reads as follows:
 
“The General Assembly shall provide for the maintenance and support of a thorough and efficient system of public education to serve the needs of the Commonwealth.”  (Emphasis added.)
 
The words “thorough and efficient” create a wise and practical tension between quality on the one hand and cost on the other while, at the same time, “serving the needs of the Commonwealth” in the process.   
 
According to Merriam-Webster, when appearing in laws, “shall’ is used “to express what is mandatory.”
 
Therefore “shall” in Section 14 of the Constitution basically mandates that the Legislature maintain and support a public school system that is faithful to the twenty-six word description found in Section 14.
 
In response to that mandate, the Legislature has maintained and supported an extensive public school system that includes K12, the community colleges, the “State-owned” and “State-related” universities, and varying numbers of “State-aided” institutions, depending on the State’s budget situation in any given year.  

Legislative Discretion
 
Note that those twenty-six words do not specify a precise level of support, either overall or for any one “sector” within Pennsylvania public education—those decisions are left to the Legislature’s discretion.
 
Evidence for such Legislative discretion may be seen in the history of State funding to the fourteen “State-owned” institutions, now known as the fourteen “PASSHE” universities, in the forty-seven years since the Pennsylvania Constitution was last amended in 1968. 
 
Back then, State appropriation was providing the vast majority (about 75%) of the annual operating revenue at the fourteen “State-owned” institutions.  Today, the State provides only 25% of that funding!
 
A more detailed history shows that the State share of annual revenue to the 14 PASSHE universities fell from 90% in 1950, to 75% in 1968, to 63% in 1983, to 49% in 1993, and to 25% today.
 
Because of the drop in State funding, the PASSHE students, parents and alumni donors—who together pay the balance of the actual costs of education not covered by State appropriation—have seen their share of the cost explode from 10% in 1950, to 25% in 1968, to 37% in 1983, to 51% in 1993, and to 75% today.
 
The speed of Pennsylvania’s disinvestment in “public higher education,” from 1950 to the present, may seem very abrupt (from 90% to 25%) but, in fact, it fell by only one percent per year—for 65 years! 

A Comparison with National Trends

In a 2012 report¹ entitled “State Funding: A Race to the Bottom,” the American Council on Education (ACE) made a number of predictions.  In terms of what was happening across America, the report stated:  

“Based on the trends since 1980, average state fiscal support for higher education will reach zero by 2059, although it could happen much sooner in some states and later in others. Public higher education is gradually being privatized.”  (Emphasis added.)

With regard to Pennsylvania, the report stated:

“Pennsylvania has also accelerated its retrenchment efforts in funding higher education. Extrapolating trends since 1980, Pennsylvania was scheduled to reach zero in 2058. But extrapolating trends since 1990 moved this date forward to 2049. And the rate of decline accelerated further in the last decade: the trend since 2000 will take Pennsylvania to zero by 2038.”  (Emphasis added.)
How Public Higher Education is Funded

Public higher education in America today receives financial support from two major sources—state funding provided by State legislatures, and “net tuition” provided by students and parents.

Net tuition is defined as the funding provided by students and parents, less financial aid.

SHEEO, the State Higher Education Executive Officers Association, has issued a report entitled “State Higher Education Finance FY 2014” which lists individual state-by-state data as well as averages across all fifty states.²  That report (Figure 9, page 33) shows that the respective funding shares in FY 2014 varied greatly across the fifty states, from about 15%/85% at one extreme, to about 85%/15% at the other!  

And while some states (e.g., Wyoming) provide 85% of the revenue and require only 15% in “net tuition,” and other states (e.g., Vermont) provide 15% of the revenue and require 85% in “net tuition,” America as a whole, over the last three decades, has been accelerating its disinvestment in public higher education.

The five states requiring the lowest levels of net tuition (in rank order) include Wyoming, California, Alaska, New Mexico and North Carolina.  The five states requiring the highest levels of net tuition in rank order) include Vermont, New Hampshire, Delaware, Colorado and Pennsylvania. 

American public higher education has been rapidly privatized in just one generation.

In FY 2014 according to the report (Figure 4, page 24), the average net tuition share of funding for public higher education across the 50 states was 47.1%, up from 24.5% just 25 years earlier in 1989.  The average net tuition contribution to public higher education funding across America has been increasing steadily at about one percent per year for the past 25 years!

Should that rate of disinvestment across the fifty States continue, traditional highly-subsidized public higher education could vanish entirely from America in one more generation. 

The Politics of Zero State Funding for Public Higher Education

Although the Pennsylvania Constitution might not prohibit the State Legislature from reducing the State’s funding share of public higher education to zero (from its current 25% share), for political reasons alone such an action by the Legislature is not very likely to occur.  
 
To be continued.


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