Tuesday, October 24, 2006

The Coming Elections and Universities

By Richard Vedder

Colleges and universities are impacted by politics, being so dependent on governments for funding. National elections then are always important, and arguably more so this year than usual.

If the Democrats are successful in taking control of Congress, there will be efforts to vastly expand student assistance programs, especially Pell Grants, and to put the squeeze on private loan providers. There might be a willingness to increase other forms of governmental assistance (such as research grants), although there is little evidence the Democrats find these programs any more important than the Republicans who have presided over a spending spree during their recent control of Congress.

Three states have major constitutional restrictions regarding state spending on the ballot: Oregon, Nebraska, and Maine. Universities are worried because strict spending limits will force some reduction in what might be viewed as "discretionary" spending, which increasingly means funds to universities. When push comes to shove and budget cuts need to be made, university subsidies lose out --legislators rather reduce them than, for example, restrict Medicaid or lower K-12 educational subsidy payments. To politicians, easing the pain on middle class families whose children mightily benefit economically from a university education is less important than avoiding significant cuts in health care to lower income families, or even funding cuts to primary or secondary schools. The arrogance and extragvence of some universities has strengthened those convictions.

The President of the University of Oregon says if their constitutional proposal (similar to Colorado's Taxpayer Bill of Rights amendment) passes, the U. of Oregon may have to consider some form of privatization. I say, why not? The intellectual justification for state subsidies of institutions of higher education is increasingly weak.

There are some other interesting college-related issues on ballots. In Ohio, for example, gambling interests are promoting slot machines at race tracks and other locations, with 30 percent of the proceeds allegedly going for university scholarships (thereby giving universities incentive to raise tuition even more). At least one university board (Ohio State --the flagship university) has actually opposed the measure, but many university officials are secretly hoping for its passage.

All of this, of course, is of secondary importance in the broader scheme of things. The major problem with American universities is NOT inadequate funding, but rather a variety of other issues --inefficiency, lack of full accountability, the absence of transparency, dubious academic standards and performance, etc. It is not until these issues are addressed that we will be any closer to solving the problems faced by higher ed.


cmh1234 said...

Mr. Vedder,

I read your article, and I'm curious about how you got the opinion that most colleges in Ohio secretly hope Issue 3 passes. I actually like the issue. I'm not necessarily a big gambling supporter, but everyone in this state is already gambling, so we might as well keep the money here. I'm in Columbus, and most people here just think Les Wexner made the OSU board decision. George Voinovich has been lobbying colleges in Ohio to urge their students to vote against the issue. I would hope they would try to understand the issue and make up their own minds. So again, I'm wondering what gives you the indication they may actually hope it passes. At least it would be encouraging to think the educators really think the issue would be a plus.

Greg Delemeester said...

Another issue on the Ohio ballot is a proposed constitutional amendment to raise the state minimum wage to $6.85 beginning in 2007 and to index the wage to future increases in the Consumer Price Index.

Has anyone examined the impact of a higher minimum wage on the federal work study program that many colleges use as part of their student aid packages? My thinking is that a higher minimum wage would mean that colleges would have to offer fewer hours of work to its students or fewer students would be eligible for the awards.