Kansas university spending and funding

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In response to a small decrease in Kansas university funding in next year’s budget, there’s been a bit of overreaction. Consider this Wichita Eagle editorial: “The higher tuition just forced on state universities by the Legislature effectively is a tax increase that will deepen loan debt for some Kansans and put college out of reach for others. And a $66 million cut to higher education is no way to ‘grow’ an economy.”

Examine the assumptions underlying this:

1. The only possible response to a small cut in state funding is for universities to raise tuition.

2. If students have to pay more of the cost of their college education, it’s a “tax increase.”

3. The response of students to higher tuition will be to increase their student loan borrowing or avoid college.

4. Spending on universities — as opposed to letting people spend and invest their own money — is the better way to grow the Kansas economy.

The most nonsensical of these is the claim of “tax increase.” Taxes are paid involuntarily. Attending college is a decision. Asking working Kansans to pay more for students to attend college: That is taxation.

Aside from this, Kansas regents universities — as is the case almost universally — have been increasing spending and tuition. Analysis by Kansas Policy Institute shows that for most Kansas regents universities, spending and tuition increases rise faster than inflation. Many times faster, in some cases. The KPI study is A Historical Perspective of State Aid, Tuition and Spending for State Universities in Kansas.

Below, Kansas Representative Marc Rhoades, who is Chair of the House Appropriations Committee, explains more about the funding and spending of Kansas regents universities, and recognizes the Washington Monument strategy employed by KU in an effort to shape public opinion on this matter. It worked on the Wichita Eagle editorial board.

Asking Questions of Higher Education

By Kansas Representative Marc Rhoades

Year after year, despite unchanged or increased state funding, the six state-funded Kansas colleges increased tuition far above inflation with little scrutiny. Undergraduate tuition and fees at the six universities increased 137 percent between 2002 and 2012. From 2002 to 2012, KU raised fees and tuition by 194 percent; KSU by 170 percent; and WSU by 117 percent.

Universities’ All Funds spending was $1.814 billion in 2005; $2.186 billion in 2008; and $2.421 billion in 2012 — a 33 percent increase in spending even with a recession.

Since 2003, unencumbered carryover cash balances in two student fee accounts increased by $248 million. In other words, they collected almost a quarter-billion dollars more in fees than they spent on whatever the fees were earmarked to do. General Fees plus interest earned on those accounts can be used for other purposes — say, for example, holding down tuition increases. Instead, students paid more in fees and more in tuition and the fee accounts kept accumulating.

This year the legislature examined the numbers and asked questions with a desire to initiate an open conversation about higher education spending, tuition and student outcomes.

The end result: a 1.5 percent reduction to Regents which hardly qualifies as a slash, but that’s the narrative being used; and since State Aid represents less than half of their General Use Expenditures, a 1.5 percent reduction in their State Aid amounts to a 0.7 percent reduction to that account.

Compare a 1.5 percent State Aid reduction with recent requests from Kansas colleges for increases in tuition up to 8 percent next year, even with inflation below 2 percent.

But the template never changes: Demands for more spending are always “modest and necessary”; reduced spending is always “drastic and draconian” — regardless of the amounts or how the money is used.

The legislature did not set out to reduce funding. We simply had questions.

Why so many unfilled FTE positions perpetually placed on the books with money systematically diverted for other uses?

Even factoring for inflation, why has tuition gone up so much without a correlation to past increases in state funding?

When defaulted on, students’ government-backed loans are paid for, ultimately, by taxpayers, so shouldn’t improved graduation and employment rates be prioritized over even higher salaries to the already-highly-paid?

By the way, the salary cap we requested was not a cut. You will hear it referred to as a cut, even though salaries were held level and not reduced.

I serve as a commissioner with the Midwest Higher Education Compact — a 12-state network of universities. Last week I attended a commissioner’s meeting in Indiana where we heard from current and former chancellors about the future of higher education. Similar to other sectors — healthcare, for example — there are two very different driving forces promoting two very different paths: collective institution-oriented versus individual outcomes-oriented.

College students, many unemployed and underemployed, are buried in debt while universities appear more focused on impressing their peers and expanding their infrastructure.

Indiana colleges, among others around the country, are addressing this disconnect. Indiana University-East, just one example, increased its student numbers and graduation rates while decreasing cost-per-student over 20 percent.

Kansas state-funded colleges have been raising tuition at astronomical rates, but under the radar. The only difference this year is they are vocal about increasing tuition using the legislature’s 1.5 percent budget reduction as a scapegoat.

Early in the session, following a discussion about spending and outcomes, KU’s response was to threaten closure of some of Kansas’ most viable institutions: KU’s medical campuses in Wichita and Salina. It was a classic bully move. Rather than address legitimate financial questions, they made threats to cut something highly valued by all. Think White House tour closures.

In response, the House and Senate conference committees added a proviso to the budget to prevent those closures from happening, even though insiders understood KU’s intention was to stir up angst among constituents in order to intimidate legislators so they would stop asking questions and hand over the money. Think shakedown.

When the endgame shifts to quantifiable student outcomes — retention and graduation rates, realistic employment tracks, greater efficiencies, reduced costs, lower tuition — collaborative conversations can take place and real-world results can be achieved in Kansas. I remain hopeful and open to such a dialogue.


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