The State of Higher Education Finance in the American West David L. Wright State Higher Education...
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The State of Higher Education Finance in the American West David L. Wright State Higher Education Executive Officers CIRPA-ACPRI & RMAIR 2005 October 25, 2005
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Transcript of The State of Higher Education Finance in the American West David L. Wright State Higher Education...
The State of Higher Education Finance in the American West
David L. Wright State Higher Education Executive Officers
CIRPA-ACPRI & RMAIR 2005October 25, 2005
Wrong ideas about Money
There is a “right” amount
The only way to get better results is to spend more money
We can get the results we need without spending more money
Right questions about Money
What do we need from higher education?
What can we do better with the money we have?
What do we need that justifies additional funds?
Making Sense of Interstate Higher Education Finance Data
SHEEO’s annual State Higher Education Finance SHEEO’s annual State Higher Education Finance (SHEF) study is intended to help educators and (SHEF) study is intended to help educators and policy makers:policy makers: Understand the extent to which state resources for colleges and universities have kept pace with enrollment and cost increases;
Examine and compare how state higher education spending is allocated for different purposes;
Assess trends in how much students are paying for higher education;
Gain a perspective on the funding of their state’s higher education system in the context of other states; and
Assess the capacity of their state economy to generate revenues to support public priorities.
Diverse Perspectives on State Higher Education Finance Data
What SHEF contributes to the national What SHEF contributes to the national conversation:conversation: Annual, ongoing; continuous time series from FY 1980 forward;
Captures state tax and non-tax support (lottery revenue, lease income, earnings on state endowments);
Adds revenue from local government and student sources; and
Interstate comparisons “as valid as possible.”
Accounts for inflation and enrollment growth;
Sets aside special purpose appropriations for research, agriculture, and medicine; and
Adjusts interstate comparisons for differences in state cost of living and public system enrollment mix.
Higher Education Cost Adjustment (HECA):Higher Education Cost Adjustment (HECA):
Attempts to reflect provider “market basket” without being self-referent.
Components federally maintained and routinely updated; transparent, accessible.
Serves as a benchmark rather than descriptive measure of higher education cost inflation.
75% of the index is based on Employment Cost Index for white-collar workers (BLS).
25% based on GDP Implicit Price Deflator (BEA).
reflects general price inflation in total U.S. economy
current $ GDP / constant $ GDP
“As Valid As Possible”
Enrollment Mix Index (EMI):Enrollment Mix Index (EMI):
Average instructional expenses per student vary by institution type.
“As Valid As Possible”
Enrollments are distributed differently across states’ public HE systems.
The EMI adjusts operating revenues to account for both factors.
Average Instructional Expenses per FTE, Fiscal 2001
State Cost of Living Adjustment (COLA):State Cost of Living Adjustment (COLA):
Driven primarily by housing costs.
Adopted index developed by Berry et al (2000).
One value per state, ranging from 0.88 to 1.16.
Hawaii and Alaska assigned value of the next highest state (Massachusetts)
“As Valid As Possible”
State Cost of Living and Public Higher Education System Enrollment Mix Index Values
Source: SHEEO SHEF
Dollars per FTE are adjusted upward the most in states with an inexpensive enrollment mix and low cost of living.
The reverse is true for states with a more expensive enrollment mix and high cost of living.
In some states, the two factors tend to cancel each other.
“As Valid As Possible”
MHEC
NEBHE
SREB
USAK
AZ
CA
COHI
ID
MT
NV
NM
OR
SD
UT
WA
WY
WICHE
0.90
0.92
0.94
0.96
0.98
1.00
1.02
1.04
1.06
1.08
1.10
0.90 0.95 1.00 1.05 1.10 1.15 1.20
State Cost of Living Index (US Avg = 1.0)
En
rollm
ent
Mix
Ind
ex (
US
Avg
= 1
.0)
STATE COST OF LIVING: below avgPUBLIC H.Ed. ENROLLMENT MIX: below avg
COST OF LIVING: above avgPUBLIC H.Ed. ENROLLMENT MIX: below avg
STATE COST OF LIVING: below avgPUBLIC H.Ed. ENROLLMENT MIX: above avg
COST OF LIVING: above avgPUBLIC H.Ed. ENROLLMENT MIX: above avg
6.7%
31.2%62.1%
Current Status
Distribution of State, Local, and Net Tuition Revenue, U.S.Fiscal 2004
Net Tuition
Local Taxes
State Support
(Tax and Non-Tax)
Source: SHEEO SHEF
State and local governments provided $69.4 billion for public and independent higher education in 2004.
An additional $31.5 billion in net tuition revenue brought the amount available from state, local, and student sources for general operating expenses to $100.9 billion.
Total Educational Revenues per FTE by State, Fiscal Year 2004
Source: SHEEO SHEF
Total educational revenues per FTE (educational appropriations plus net tuition) averaged $8,924 in 2004.
$5,992
$13,857
$8,924
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
14,000
WY
DE
CT
MO RI
MI
MD AL
ME
NV
GA
VT
OR HI
MA
KY
NC
TN IA AR
SD
MN IN TX
NM WI
US IL KS
AZ
NE
OH
MT
WV
VA
CA ID SC
OK
LA UT
ND
WA
CO
NH
MS FL
AK
Current Status
Net Tuition Revenue per FTE by State, Fiscal Year 2004
Source: SHEEO SHEF
The national average net tuition revenue per FTE was $3,187 in 2004.
With the exception of Oregon, South Dakota, Colorado, and Montana, Western states were below the U.S. average. $3,187
$1,152
$7,927
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
VT
DE
MD RI
MI
AL
OR
CT
ME
SD IN IA CO
MO
NH
TN
MT
OH
MN
VA
WV
MA
WI
AR
NE
US
TX
KS
ND
KY
AZ
SC
UT
MS
NC
OK IL NV
WY LA HI
FL
WA ID GA
CA
AK
NM
Current Status
Educational Appropriations per FTE by State, Fiscal Year 2004
Source: SHEEO SHEF
The national average educational appropriation per FTE was $5,737 in 2004.
The WICHE states with above-average tuition revenue per FTE (CO, MT, OR, and SD) were below the national average in educational appropriations per student.
$5,737
$11,708
$2,151
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
WY
GA
NV
NM HI
CT
NC
MO
KY
CA IL ID MA
AR AZ
TX
US
ME
WA WI
KS
AL
LA MI
RI
DE
OK
TN
SC
MN
NE
MD
UT IA FL
OR
WV IN AK
SD
ND
VA
MS
OH
MT
CO
NH
VT
Current Status
Net Tuition as a Percentage of Total Educational Revenues, by State, Fiscal 2004
Source: SHEEO SHEF
Nationally, the average share of educational revenues represented by net tuition in 2004 was 35.7%.
Among Western states, reliance on tuition as a major source of operating revenue ranged from 59.2% in Colorado to 12.8% in New Mexico.
12.8%15.5%
19.8%19.8%21.7%22.0%23.3%24.3%
25.9%
32.3%33.6%34.7%35.7%
42.0%43.3%
49.7%50.8%51.4%
59.2%
0%
10%
20%
30%
40%
50%
60%
70%
Ne
w M
exi
co
Wyo
min
g
Ha
wa
ii
Ca
lifo
rnia
Ida
ho
Ne
vad
a
Ala
ska
Wa
shin
gto
n
WIC
HE
Ari
zon
a
Uta
h
SR
EB
US
MH
EC
NE
BH
E
Mo
nta
na
So
uth
Da
kota
Ore
go
n
Co
lora
do
Current Status
Net Tuition Increase Needed to Offset a 1% Decrease in State Government Support for Public Higher Education, by State, Fiscal
2004
Source: SHEEO SHEF
Notes: State dollars include Research-Ag-Med. Net tuition revenues are from all levels (undergraduate, graduate, first professional) except medical schools.
Higher education systems that rely heavily on state support are more vulnerable to decreases in appropriations.
Nationally, net tuition revenues would have needed to increase 1.9% on average to offset a one percent decrease in state support (based on 2004 SHEF data).
0.8%0.9%
1.1% 1.2%1.4% 1.4% 1.5%
1.9%
2.2% 2.2%
2.6%
3.4%3.6% 3.6%
3.8% 3.9%
4.8%
5.4%
7.6%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
Col
orad
o
Ore
gon
Mon
tana
Sou
th D
akot
a
MH
EC
NE
BH
E
Ariz
ona
US
Uta
h
SR
EB
WIC
HE
Was
hing
ton
Cal
iforn
ia
Ala
ska
Nev
ada
Idah
o
Haw
aii
Wyo
min
g
New
Mex
ico
Current Status
From fiscal 2001 to 2004:From fiscal 2001 to 2004:
“The fiscal 2004 SHEF study documents a 4-year period when state funding for higher education failed to keep pace with normal inflation and extraordinary enrollment growth in the U.S., leaving per student state & local funding near their lowest levels nationally in 25 years.”
Recent Trends
State & local appropriations for general educational expenses in public colleges and universities were essentially flat, while:
enrollments grew by 11.8% and
higher education costs grew by 10.3% as estimated by HECA.
In inflation-adjusted terms,
Educational appropriations per FTE decreased 16.5%, from $6,874 to $5,737;
Net tuition revenue per FTE increased 11.1%, from $2,869 to $3,187; and
Total educational revenues per FTE decreased 8.4%, from $9,743 to $8,924.
$6,874
$5,702$5,737
$6,094
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
10.0
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Pu
blic
FT
E E
nro
llmen
t (m
illio
ns)
$5,000
$5,500
$6,000
$6,500
$7,000
Ed
uca
tio
nal
Ap
pro
pri
atio
ns
per
FT
E
Note: State and local government support, excluding research, agricultural, and medical.Source: SHEEO SHEF
= Recession
U.S. Trends since 1980
FTE enrollment in public institutions has grown by more than 40% since 1980.
Enrollment growth since 2001 has already outstripped that of each of the previous two decades.
+ 6.2%
+ 8.5%
Educational Appropriations per FTE, U.S.,Fiscal 1980-2004, Constant 2004 Dollars
+ 11.8%
$6,874
$5,702$5,737
$6,094
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
10.0
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Pu
blic
FT
E E
nro
llmen
t (m
illio
ns)
$5,000
$5,500
$6,000
$6,500
$7,000
Ed
uca
tio
nal
Ap
pro
pri
atio
ns
per
FT
E
Note: State and local government support, excluding research, agricultural, and medical.Source: SHEEO SHEF
= Recession
Over the long term, state and local government funding per student has been narrowly outpaced by enrollment and inflation as estimated by the HECA, decreasing on average one-fourth of one percent annually.
The level of support has varied from year to year, at times dramatically.
U.S. Trends since 1980
Educational Appropriations per FTE, U.S.,Fiscal 1980-2004, Constant 2004 Dollars
Economic downturns tend to depress state funding per student because budgets are constrained while enrollment grows rapidly.
In the past, state support per FTE has rebounded following a downturn.
Regional Trends since 1980
Each region generally mirrors the national trend in per student operating appropriations from state and local governments.
The level of the spending has been always at the highest in New England and the lowest in the South.
Educational Appropriations per FTE, by RegionFiscal 1980-2004, Constant 2004 Dollars Adjusted by SHEEO HECA, EMI,
and COLA
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
$11,000
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Fiscal Year
Ed
uca
tio
nal
Ap
pro
pri
atio
n p
er F
TE
MHEC
NEBHE
SREB
WICHE
US
Note: State and local government support, excluding research, agricultural and medical Source: SHEEO SHEF
Regional Trends since 1980
Total Educational Revenues per FTE, by RegionFiscal 1980-2004, Constant 2004 Dollars
Source: SHEEO SHEF
$6,000
$7,000
$8,000
$9,000
$10,000
$11,000
$12,000
$13,000
$14,000
$15,000
$16,000
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04Fiscal Year
To
tal
Ed
uca
tio
nal
Rev
enu
e p
er F
TE
MHEC
NEBHE
SREB
WICHE
US
When net tuition is added to state and local government support, New England and Midwestern states historically have exceeded the U.S. average total educational revenues per FTE, while Western and Southern states have operated with less.
Recent Trends
The Rockefeller Institute reports that state tax revenue in the 4th quarter of 2004 grew 7.8% compared to the same period in 2003 (the strongest fourth-quarter growth since 1991), but warns of continuing cost pressures in Medicaid, elementary & secondary education, and other areas.
According to Grapevine, state tax appropriations for higher education, unadjusted for enrollment or inflation, were down 2.1% in fiscal 2004 (the first such nominal decrease in 11 years) but up 3.8% in 2005.
A SHEEO early look at FY 2006 state tax appropriations for higher education in 30 states indicated that 25 anticipated increases; only one expected a decrease.
Signs that things may be turning around:Signs that things may be turning around:
Will recovery offset enrollment growth and inflation?Will recovery offset enrollment growth and inflation?
Figure 1Enrollment Growth and Public Higher Education Appropriations per FTE, U.S., Fiscal 1980-2004
(Constant 2004 dollars adjusted by SHEEO Higher Education Cost Adjustment)
$6,874
$5,702$5,737
$6,094
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
10.0
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Pu
blic
FT
E E
nro
llmen
t (m
illio
ns)
$5,000
$5,500
$6,000
$6,500
$7,000
Ed
uca
tio
nal
Ap
pro
pri
atio
ns
per
FT
E
Note: State and local government support, excluding research, agricultural, and medical.Source: SHEEO SHEF
= Recession
Educational Appropriations per FTE, U.S.,Fiscal 1980-2004, Constant 2004 Dollars Adjusted by SHEEO
HECA
The choice of baseline year is fundamental to any analysis of long-term funding trends.
Choosing a “peak” or “valley” would lead to dramatically different conclusions about trends in revenues per student.
Selecting an Appropriate Baseline for Subsequent Trend Analyses
Baseline year for remaining analyses
regression line
Net Tuition as a Percentage of Total Educational Revenues, U.S., Fiscal 1991-2004
Source: SHEEO SHEF
In public institutions, net tuition tends to grow as a percentage of total revenues when the state appropriation per student decreases in economic downturns.
Nationally, net tuition accounted for 26% of total educational revenues in 1991; remained fairly constant at about 30% from 1993 to 2002, then increased each of the last two years to its current level of 36%.
U.S. Trends from 1991-2004
Net Tuition as a Percentage of Public Higher Education Total Educational Revenues, U.S., Fiscal 1991-2004
26.1%
30.8% 31.3% 31.2% 31.7% 31.2% 30.6% 30.1%29.4% 29.4%
30.3%
35.7%
33.0%
28.8%
0%
5%
10%
15%
20%
25%
30%
35%
40%
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Net Tuition as a Percentage of Total Educational Revenues, by Region, Fiscal 1991-2004
Source: SHEEO SHEF
Regional Trends from 1991-2004
Nationally, the average share of educational revenues represented by net tuition in 2004 was 35.7%, approximately a 10 point increase since 1991.
New England and Midwestern states tended to exceed the national average on this measure, while Western states were beneath it.
42.0%
31.7%
43.3%
33.1%
26.4%
34.7%
16.6%
25.9%
35.7%
26.1%
15%
20%
25%
30%
35%
40%
45%
50%
1990-1991
1991-1992
1992-1993
1993-1994
1994-1995
1995-1996
1996-1997
1997-1998
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
MHEC
NEBHE
SREB
WICHE
US
Total Educational Revenues per FTE, by Component, U.S., Fiscal 1991-2004, Constant 2004 Dollars
Source: SHEEO SHEF
In constant 2004 dollars adjusted by the HECA, educational appropriations per FTE in public institutions dipped during the early 1990s recession but had recovered by the end of that decade.
However, recent constant dollar decreases in educational appropriations result in a net decrease of 11.7% for the period, from $6,499 in 1991 to $5,737 in 2004.
U.S. Trends from 1991-2004
In the post-recession periods of the early 1990s and early 2000s, increases in net tuition per student have been unable to offset decreasing levels of state & local government support.
Total Educational Revenues per FTE by Component, U.S., Fiscal 1991-2004(Constant 2004 dollars adjusted by SHEEO Higher Education Cost Adjustment)
6,4996,126 5,917 5,985 6,185 6,258 6,451 6,648 6,815 6,854 6,874 6,639
6,0765,737
2,480 2,639 2,7272,800 2,899
2,9222,935
2,939 2,849 2,8692,882
2,9933,187
2,300
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Net TuitionEducational Appropriations $8,924$8,799
$9,743
Full-Time Equivalent Enrollment, Percent Change by State, Fiscal 2001-2004
Source: SHEEO SHEF
Nationally, enrollments in public institutions increased 11.8% from 2001 to 2004.
Regionally, increases in enrollment ranged from a 27.9% in South Dakota to 6.3% in Montana.
Enrollment Growth Since 2001
6.3%7.5%
9.2%10.0%10.3%
10.9%11.4%11.8%12.1%
13.7%13.9%13.9%14.3%14.8%
16.9%18.1%
18.9%19.1%
27.5%
0%
5%
10%
15%
20%
25%
30%
Mo
nta
na
Wa
shin
gto
n
Ca
lifo
rnia
Wyo
min
g
MH
EC
WIC
HE
Ha
wa
ii
US
Ore
go
n
Ari
zon
a
SR
EB
Co
lora
do
NE
BH
E
Ida
ho
Ala
ska
Uta
h
Ne
vad
a
Ne
w M
exi
co
So
uth
Da
kota
Full-Time Equivalent Enrollment, Percent Change by State, Fiscal 1991-2004
Source: SHEEO SHEF
Nationally, enrollments in public institutions increased 21.8% from 1991 to 2004.
Regionally, these increases ranged from an 86.9% increase in Nevada to 2.9% growth in Wyoming.
2.9%
9.3% 10.2%12.1%
18.3%21.8%21.9%22.7%
26.3%27.3%27.6%27.9%30.2%
36.3%40.2%41.8%42.3%
66.8%
86.9%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Wyo
min
g
MH
EC
Ala
ska
NE
BH
E
Ha
wa
ii
US
Ore
go
n
Co
lora
do
Ne
w M
exi
co
Ca
lifo
rnia
Mo
nta
na
SR
EB
WIC
HE
Ari
zon
a
So
uth
Da
kota
Wa
shin
gto
n
Ida
ho
Uta
h
Ne
vad
a
Enrollment Growth Since 1991
Educational Appropriations per FTE, Percent Change by State,
Fiscal 2001-2004, Constant 2004 Dollars
Source: SHEEO SHEF
Nationally, educational appropriations per FTE in public institutions declined by an average of 16.5% from 2001 to 2004.
Regionally, these changes ranged from 18.1% growth in Montana to a 35.4% decrease in California.
-35.4%
-21.3%-19.8%
-17.1%-16.9%-16.5%-14.9%-14.5%-13.8%-13.6%-12.9%-12.0%
-10.0%-9.2%-7.9%
-0.2%3.0%
6.7%
18.1%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
Ca
lifo
rnia
NE
BH
E
MH
EC
SR
EB
Ha
wa
ii
US
So
uth
Da
kota
Ne
w M
exi
co
Ari
zon
a
Uta
h
Wyo
min
g
WIC
HE
Ala
ska
Ore
go
n
Ida
ho
Co
lora
do
Wa
shin
gto
n
Ne
vad
a
Mo
nta
na
State & Local Government Support Since 2001
Source: SHEEO SHEF
-31.9%-28.6%-28.6%-28.0%
-22.1%-20.1%
-17.6%-16.5%
-11.7%-11.3%-10.9%-8.7% -8.3%-7.8% -6.8%
-3.7%
0.7%
13.4%
26.7%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
Ca
lifo
rnia
Ne
w M
exi
co
Ida
ho
Uta
h
So
uth
Da
kota
Ha
wa
ii
Co
lora
do
WIC
HE
US
Wyo
min
g
Ore
go
n
MH
EC
SR
EB
Ari
zon
a
NE
BH
E
Ala
ska
Ne
vad
a
Mo
nta
na
Wa
shin
gto
n
Nationally, educational appropriations per FTE in public institutions declined by an average of 11.7% from 1991 to 2004.
In the West, changes in educational appropriations ranged from 26.7% growth in Washington to a decrease of 31.9% in California.
Educational Appropriations per FTE, Percent Change by State,
Fiscal 1991-2004, Constant 2004 Dollars
State & Local Government Support Since 1991
Net Tuition Revenue per FTE, Percent Change by State, Fiscal 2001-2004, Constant 2004 Dollars
Source: SHEEO SHEF
Nationally, net tuition per FTE increased by an average of 11.1% from 2001 to 2004, and all but two states experienced increases.
Decreases in net tuition revenue may be associated with institutional discounting, increases in the state financial aid program, or student migration to lower-cost institutions.
-30.9%
-5.6%
-0.3% 0.3% 1.2% 2.5% 3.5% 4.2%10.1%11.1%13.3%14.5%
17.4%17.9%18.9%21.9%
25.5%
37.0%
89.2%
-40%
-20%
0%
20%
40%
60%
80%
100%
Wyo
min
g
Ida
ho
NE
BH
E
SR
EB
Ari
zon
a
Ala
ska
Ha
wa
ii
Ne
vad
a
So
uth
Da
kota
US
Wa
shin
gto
n
Co
lora
do
Mo
nta
na
MH
EC
Uta
h
Ore
go
n
Ne
w M
exi
co
WIC
HE
Ca
lifo
rnia
Tuition Revenue Since 2001
Net Tuition Revenue per FTE, Percent Change by State, Fiscal 1991-2004, Constant 2004 Dollars
Source: SHEEO SHEF
In constant dollars, net tuition per FTE increased by an average of 38.6% from 1991 to 2004, and all states but Washington experienced increases.
Decreases in net tuition revenue may be associated with institutional discounting, increases in the state financial aid program, or student migration to lower-cost institutions.
-6.4%
10.9%14.1%
18.3%
30.3%36.2%38.6%
41.8%42.4%43.6%44.0%50.4%
56.4%
68.2%73.1%
91.4%
112.4%
129.7%132.5%
-20%
0%
20%
40%
60%
80%
100%
120%
140%
Wa
shin
gto
n
Ari
zon
a
Ne
vad
a
Uta
h
Co
lora
do
SR
EB
US
Ida
ho
MH
EC
NE
BH
E
Ala
ska
So
uth
Da
kota
WIC
HE
Ne
w M
exi
co
Wyo
min
g
Ca
lifo
rnia
Ore
go
n
Ha
wa
ii
Mo
nta
na
Tuition Revenue Since 1991
Total Educational Revenues per FTE, Percent Change by State, Fiscal 2001-2004
Source: SHEEO SHEF
When aggregated nationally, total educational revenues per FTE have decreased by 8.4% since 2001.
-14.7%-13.4%-13.0%
-11.8%
-9.0%-8.4% -8.3%-7.4%-6.7%
-5.9%-4.3% -3.8% -3.4%
-0.3%
0.5% 1.0%
3.1%
8.8%
14.7%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Ida
ho
NE
BH
E
Co
lora
do
SR
EB
Ala
ska
US
Wa
shin
gto
n
MH
EC
Ari
zon
a
Uta
h
Wyo
min
g
WIC
HE
Ca
lifo
rnia
So
uth
Da
kota
Ha
wa
ii
Ore
go
n
Mo
nta
na
Ne
w M
exi
co
Ne
vad
a
Total Educational Revenues Since 2001
Total Educational Revenues per FTE, Percent Change by State, Fiscal 1991-2004
Source: SHEEO SHEF
When aggregated nationally, increases in net tuition revenue generally offset decreases in state appropriations to yield an average 1.4% increase in total educational revenues per student.
Individual state circumstances, however, varied substantially around that mean.
-23.7%
-12.0%-11.7%
-7.4%-5.6%-5.0%
-0.1% 0.5% 1.4%2.8% 3.4%
6.2%7.5% 8.4% 9.0% 9.9%
12.4%13.6%
32.2%
-30%
-20%
-10%
0%
10%
20%
30%
40%
Wa
shin
gto
n
Uta
h
Ida
ho
Ala
ska
Ha
wa
ii
Co
lora
do
WIC
HE
Ari
zon
a
US
Ca
lifo
rnia
SR
EB
Ne
w M
exi
co
MH
EC
Ore
go
n
Mo
nta
na
NE
BH
E
So
uth
Da
kota
Ne
vad
a
Wyo
min
g
Total Educational Revenues Since 1991
Percent Change by State in Enrollment and in Educational Appropriations per FTE, Fiscal 1991-2004
Source: SHEEO SHEF
Plotting the SHEF data along two dimensions can bring state fiscal policy findings and trends into sharper relief.
Here, data points on the vertical axis represent public higher education enrollment growth from 1991-2004. The horizontal axis shows each state’s percent change in educational appropriations per student over the same period.
Putting the Pieces Together
Of the 10 Western states with above average enrollment growth from 1991 to 2004, only Nevada and New Mexico maintained educational appropriations per student on a constant dollar basis for the period.
US
WICHE
WY
WA
UT
OR
NM
NV
MT
ID
HI
COCA
AZ
AK
SD
SREB
NEBHEMHEC
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
-40% -30% -20% -10% 0% 10% 20% 30%
Percent Change in Educational Appropriation per FTE
Per
cen
t C
han
ge
in P
ub
lic H
igh
er E
du
cati
on
En
rollm
ent
Appropriation Change: Below US Avg
Appropriation Change: Above US AvgFTE Change: Above US Avg
Appropriation Change: Below US AvgFTE Change: Below US Avg
Appropriation Change: Above US Avg
Total Educational Revenues per FTE by State: Percent Change and Current Standing Relative to U.S.
Average
Source: SHEEO SHEF
The next two-dimensional analysis allows states to assess total educational revenues per FTE relative to the national average currently (on the horizontal axis) and over time (on the vertical).
The two states in the upper left quadrant lag the U.S. average but have been catching up. Hawaii, in the lower right quadrant, exceeds the national average but has lost ground.
Putting the Pieces Together
MHECNEBHE
SREB
SD
AK
AZCA
CO HI
ID
MT
NV
NMOR
UT
WA
WY
WICHEUS
-30%
-20%
-10%
0%
10%
20%
30%
40%
0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.3 1.4 1.5 1.6
Indexed to the US Average in FY2004
Per
cen
t C
han
ge,
FY
1991
-200
4
% Change: Above US AvgCurrent: Below US Avg
% Change: Below US Avg
% Change: Above US Avg Current: Above US Avg
% Change: Below US AvgCurrent: Below US Avg
Notes:1) Figures are adjusted for Inflation, public system enrollment mix, and state cost of living.2) Funding and FTE data are for public, non-medical students only
Percent Change by State in Educational Appropriationsand Net Tuition Revenues per FTE, Fiscal 1991-2004
Source: SHEEO SHEF
Putting the Pieces Together
This figure shows each state’s rate of change in the two components of total educational revenues per student – educational appropriations and net tuition – relative to the national average.
States in the upper right quadrant have exceeded the national average on both dimensions.
US
WICHE
WY
WA
UT
OR
NM
NV
MT
ID
HI
CO
CA
AZ
AKSD
SREB
NEBHEMHEC
-20%
0%
20%
40%
60%
80%
100%
120%
140%
-40% -30% -20% -10% 0% 10% 20% 30%
Percent Change in Educational Appropriation per FTE
Per
cen
t C
han
ge
in N
et T
uit
ion
Rev
enu
e p
er F
TE
APPROPS % Change: Above US Avg NET TUIT % Change: Above US
APPROPS % Change: Above US Avg NET TUIT % Change: Below US
APPROPS % Change: Below US AvgNET TUIT % Change: Below US Avg
APPROPS % Change: Below US AvgNET TUIT % Change: Above US Avg
Notes:1) Figures are adjusted for Inflation, public system enrollment mix, and state cost of living.2) Funding and FTE data are for public, non-medical students only
Net Tuition Revenue per FTE and Total State Student Grant Aid per FTE, Fiscal 2004
Sources: SHEEO SHEF
States that rely heavily on net tuition revenues might also try to fund a balanced state financial aid program.
In this figure, the horizontal axis shows FY04 net tuition revenue per FTE for each state. The vertical axis shows FY04 state-funded financial aid per FTE. States in the upper right quadrant exceed the U.S. average on both.
Putting the Pieces Together
MHEC
NEBHE
SREB
SDAKAZ
CA
CO
HI
ID
MTNV
NM
OR
UT
WA
WY
WICHE
US
$0
$100
$200
$300
$400
$500
$600
$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000
Fiscal 2004 Net Tuition Revenue per FTE
Fis
cal 2
004
Tuit
ion
Aid
per
FT
E
Tuition Aid: Above US Avg Net Tuition: Above US
Tuition Aid: Above US Avg Net Tuition: Below US Avg
Tuition Aid: Below US Avg Net Tuition: Above US
Tuition Aid: Below US AvgNet Tuition: Below US Avg
Perspectives on Taxes and State Support of Higher Education
Taxable Resources and Effective Tax Rate Indexed to the U.S. Average,
by State, Fiscal 2002
Source: SHEEO SHEF
States whose effective tax rate exceeds the national average are plotted above the horizontal axis, and states with above average wealth (total taxable resources per capita) are plotted to the right of the vertical line.
Shaded states have actual tax revenues per capita within +/-10% of the national average.
WICHE
SREB
NEBHE
MHEC
WYWAUT
SD
OR
NM
NV
MTID
HI
CO
CA
AZ
AK
US
0.70
0.80
0.90
1.00
1.10
1.20
0.70 0.80 0.90 1.00 1.10 1.20 1.30
Total Taxable Resources Index (US Avg=1.0)
Eff
ecti
ve T
ax R
ate
Ind
ex (
US
Avg
=1.
0)
State Wealth: Above US Avg Effective Tax Rate: Above US Avg
State Wealth: Below US AvgEffective Tax Rate: Below US Avg
State Wealth: Below US AvgEffective Tax Rate: Above US Avg
State Wealth: Above US AvgEffective Tax Rate: Below US Avg
In making funding decisions, a state must In making funding decisions, a state must answer the following key questions:answer the following key questions:
What kind of higher education system do we want?
What will it take, given our circumstances, to obtain and sustain such a system?
Are we making effective use of our current investments?
What can we afford to invest in order to meet our goals?
Conclusion
REPORTS & PRESENTATIONS:www.sheeo.org
DATA:www.higheredinfo.org
CONTACT:[email protected]
David Wright,Senior Research Analyst
(303) 541-1609
