By Richard Vedder
Everyone prefers more to less. If you see a five dollar bill lying on the street, you pick it up and consider yourself lucky. Therefore, it is not surprising that the higher education community is crying the blues these days, as dollars are being taken away from them.
The new Grapevine study from Illinois State University provides the first comprehensive data on this year's appropriations decline. The numbers actually show a 0.9 percent INCREASE, but there most likely will be cuts in appropriations as the year goes along and my guess of a true figure is a reduction of, say 3-4 percent. Adjusted for inflation and enrollment increases, the reductions may approach 10 percent on average, which is not insignificant. The decade long (2000-09) average increase in appropriations was a tad over 4 percent, which is essentially zero or a tad less than zero after adjusting for inflation and enrollment change.
Moreover, some states are facing a worse situation. Inflation-adjusted cuts of over 10 percent have been enacted in Alabama, Florida, Rhode Island, South Carolina and Tennessee, for example (and perhaps others). A few states (e.g., Georgia, Missouri, and Wyoming) had planned big increases, but my guess is that those are being scaled back.
The time has come for major changes in the way colleges do business. The salary reduction approach (e.g., Clemson and Urbana University) is at best a short run solution. My associate Andrew Gillen is delivering remarks tomorrow that I prepared for the National Association of Scholars conference outlining 13 things I predict might emerge from the current crisis, and many of them involve cost cutting. And some long run institutional changes may be coming. More schools may abandon tenure, for example. Teaching loads may start growing, reversing a trend of at least 50 years standing. Administrative bureaucracies may be trimmed, and the special status that intercollegiate athletics seems to have may be at least partially questioned (e.g., their budgets may be folded into the general university budget). Above all, the use of technology to REDUCE COSTS, so far elusive, may begin in earnest.
Stay tuned. Out of adversity can come opportunity for reform.