Governor Walker’s budget for 2015-17 proposes to decrease funding for the University of Wisconsin system by $300 million, a 13% decrease on top of the 17.5% cut already implemented in previous budgets. In return, property owners in Wisconsin may see their property taxes decline by $5 in each of the two years of the biennial budget or a total of $10. This property tax “relief” is not only smaller than a pittance; it will also return the greatest “relief” to the owners of the most expensive properties. So the benefit calculations, such as they are, are clear. But what the proposed budget does not explain is how these draconian cuts will play out in the years to come. Before this budget plan is enacted, we need to ask what happens when states cut deeply into the funding for public colleges and universities. Fortunately, we now have empirical answers to this question.
Most states, including Wisconsin, made significant cuts to public universities starting in 2008 when the Great Recession began. Now the effects of those earlier cuts are beginning to be measured. The Center on Budget and Policy Priorities compiled data on various effects in a 2013 report:
- Increased tuition: nationally, rates increased by 27% between 2008 and 2013 in inflation-adjusted dollars. In Wisconsin, state funding per student decreased by $1083 from 2008-13 and tuition increased by $1637. So 85% of the cuts in state aid were simply added to the cost born by each student.
- Decreased quality: “Public colleges and universities also have cut faculty positions, eliminated course offerings, closed campuses, shut down computer labs, and reduced library services, among other cuts. For example, Arizona’s university system cut more than 2,100 positions; merged, consolidated or eliminated 182 colleges, schools, programs and departments; and closed eight extension campuses (local campuses that facilitate distance learning).” Class sizes increase and in some cases make graduating on time difficult when students cannot get into required classes for lack of space in them.
- Decreased enrollment of in-state students: to make ends meet, colleges and universities often step up efforts to recruit more students from abroad and from other states, squeezing in-state students out.
But the effects are not limited to the individuals seeking college degrees. The CBPP report also finds that
the benefits of academic attainment extend beyond those who receive a degree. research suggests that the whole community benefits when more residents have college degrees. Areas with highly educated residents tend to attract strong employers who pay their employees competitive wages. Those employees, in turn, buy goods and services from others in the community, broadly benefitting the area’s economy. Economist Enrico Moretti of the University of California at Berkeley finds that as a result, the wages of workers at all levels of education are higher in metropolitan areas with high concentrations of college-educated residents. This finding implies that — even though not all good jobs require a college degree — having a highly educated workforce can boost an area’s economic success.
UW-Stevens Point and UW-Milwaukee have both recently produced economic impact analyses. They demonstrate that the state’s investments in their campuses provide a handsome return to the residents of their communities. Every dollar of state funds invested in UWSP, for example, returns $9.46 in economic activity. Every state dollar going to UW-Milwaukee returns a whopping $13 to the economy of the region and state. The University system has 26 campuses: 13 4-year institutions and 13 2-year schools. The University System calculates that the average ROI to the entire system is 800% (for $1.2 billion in state funding, the system returns $15+ billion in economic impact). Thus, the $300 million reduction could have a negative impact on Wisconsin’s economy of $2.4 trillion dollars!
Universities are, after all, economic engines and seedbeds of innovation. As Kevin Conroy and Tom Shannon recently pointed out, the universities and colleges in the Wisconsin system have incubated many successful start-ups and “UW System graduates are fueling the growth of many strong Wisconsin companies.” The university system’s value lies not only in the education and opportunity they provide each individual student. Their value to the state and the nation are, literally, incalculable.
Oscar Wilde famously defined a cynic as “a man who knows the price of everything and the value of nothing.” Walker’s budget plan is truly cynical, a veritable case of “penny wise and pound foolish.” We need to make sure our legislators know that we are not prepared to sell our birthrights and our futures for the mess of pottage Walker is offering.