Higher ed is key to a state’s success, and should be supported

Across the nation, public policymakers are starting to let data drive decisions. That’s why the most successful states – states where you can live long and prosper, to borrow a phrase – are those that are doing more to prepare, retain and attract young college graduates.

The states with the highest per capita incomes and the longest life spans tend to be those with large percentages of college graduates.

That fact seems to be a problem for the Mackinac Center for Public Policy, which argues that average citizens are better off when taxes are low and public goods – including state support for higher education – are severely limited. Mackinac Center writers, in a recent Bridge opinion piece, argued that Michigan shouldn’t be taking steps to invest more in higher education, because it wouldn’t result in lower tuition and that the investment wouldn’t result in more college grads choosing to stay in the state anyway.

Missing in both arguments were important factors that the authors ignored.

First: The cost of providing a public university education to a Michigan student is virtually the same as it was in 2002, after adjusting for inflation. Tuition is up because state support for those students is down.

Second: States that don’t prepare, attract or retain college graduates are poor relative to more educated neighbors. So a state needs to do all three to be in the front ranks of prosperity – get its students ready for college, graduate them, and then keep them here and attract more of their colleagues.

Let’s look at the first issue. A nonpartisan Michigan House Fiscal Agency analysis showed that from 2001 to 2014, after inflation, 80 percent of tuition prices were attributable to state funding reductions, and nearly 100 percent when factoring in institutional financial aid. The cost of a public university education for a Michigan student – state support plus tuition rates – has been essentially flat since the 2001-02 school year after adjusting for inflation.

In the 2001-02 school year, state universities received $12,468 from the state for each state student enrolled, and charged on average $6,543 to a state student for tuition. The total cost in 2015 dollars: $19,011.

In 2014-15, state universities received just $7,496 from the state for each Michigan student, a 40 percent cut in state support per student. The average in-state tuition increased to $11,454 per student. Total cost for an education of a Michigan student: $18,950. After adjusting for inflation, that’s $61 less than in 2001-02.

Some students, however, are paying significantly more for tuition than they used to, and are helping to subsidize others. Those would be out-of-state and international students. Thanks to good management, Michigan’s public universities are considered some of the best in the nation as a group. That high quality allows them to charge a premium for the education students from other states and other nations are receiving, and helps support students from Detroit to Ironwood.

Which brings us to point two. Attracting these out-of-Michigan students also gives the state a chance to hold onto them to bolster our state’s lower tier ranking in college attainment. Today, Michigan ranks 34th among the 50 states of those over 25 years old with a college degree. It also ranks 34th in per capita income, and 35th in average life expectancy.

The states with the highest per capita income and longer life spans have more college graduates in their population mix. (In the Midwest, that would be Minnesota, ranking 10th nationally in education attainment, 9th in per capita income and 2nd in life expectancy.)

Now, Michigan’s universities can’t make students stay and take jobs here. That requires, first and foremost, the kinds of cities that today’s graduates want to work, live and play in.

Unfortunately, when compared to other states, Michigan is falling behind in that race. Massive cuts to revenue sharing have meant our cities just don’t stack up to Minneapolis, Chicago, Washington D.C. or San Francisco in the quality of life young college graduates are looking for.

Lack of mass transit dollars mean college grads who increasingly want to get by without a vehicle are limited in their Michigan location decisions. It all adds up to a brain drain.

The Mackinac Center’s ideologically-driven assertions regarding the value of state investment in public higher education conveniently failed to focus on the right variables. The fact is, data from the U.S. Census Bureau and U.S. Bureau of Economic Analysis demonstrate that there’s a positive correlation between state per-student funding for universities and state per-capita income. There is, more importantly, an even stronger positive correlation between the education level of states (as determined by the percentage of citizens over 25 with a bachelor’s degree) and state per-capita income.

The data are clear: supporting public universities through state investment will drive up Michigan’s per capita income.

The Mackinac Center wants to argue one-dimensional approaches – that more state support for higher education won’t result in lower tuition for in-state students, and that investment in higher education won’t lead to more college-educated people choosing our state. But it’s easy to see that states that invest in higher education tend to have lower tuitions. And it’s obvious that if we don’t create college graduates, considering how poorly we are doing in creating an environment that attracts them, we will fall further and further behind.

Without sufficient numbers of college graduates, companies that need them won’t stick around, and certainly won’t move to Michigan. And we won’t move the needle on our current low per capita income numbers.

Investing in our universities and our cities, two areas the state has slashed the most in the last 15 years, is the best way to increase prosperity for our state.

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Comments

Mick
Fri, 04/29/2016 - 12:36pm
The Mackinac Center is usually wrong on everything they "research." I'm surprised they haven't (yet) touted the economic benefits of the Flint Water Crisis. They lead the neanderthals in Lansing and on the Detroit News editorial page and are a source of affirmation for the poorly informed.
Wayne O'Brien
Sat, 04/30/2016 - 7:57am
One must wonder when the Mackinac Center funders will begin to seriously assess the value they are deriving from their dollars to the center. The most recent article from them (referred to here and published recently) provides evidence that folks at the center tend to operate more from ideological than logical perspectives eschewing serious contextual, fact-based analysis derived from a widely informed systemic awareness. Their approach seems to more closely correspond to hermeneutics or theological apologetics whereby commitments to previously stated positions typically trump negative outcomes derived from holding to rationally unjustified positions of simple, unexamined, blind faith.
Richard McLellan
Sun, 05/01/2016 - 4:49pm
I am very impressed with the big words: "folks at the center tend to operate more from ideological than logical perspectives eschewing serious contextual, fact-based analysis derived from a widely informed systemic awareness. Their approach seems to more closely correspond to hermeneutics or theological apologetics.....
***
Sat, 04/30/2016 - 8:00pm
Don't they get a lot of their funding from the Koch brothers? Seems I read that somewhere.
Matt
Sat, 04/30/2016 - 8:42pm
While we're hearing the accusations of bias and vile hurled at the Mac Center from previous commenters, am I the only one who thinks that having the CEO of the Michigan Association of State U's beating the drum for more money for his clients, is every bit as biased or probably more than the Mac Center's opinion piece? Looking at your table, maybe I'm missing something, or something was left out, but understanding your contention; More college grads = more income, does your bias or faulty logical reasoning leave out the even more likely conclusion that More income = more college grads? At least the Mackinaw piece's writers attempted to rebut.
duane
Sat, 04/30/2016 - 11:29pm
Matt, At least in this commenting it seems that bias only exists if it is contrary to the commentors point of view. I would have been more receptive to Mr. Hurley were suggesting a conversation looking for new perspectives and innovative approaches to higher learning. As a CEO I would think he would look to other successful CEO outside of his area of experience and learn from them how their orgainzation evolve to be more collabarative and less confrontational. I know of one Michigan firm that drew those who were aggressively confrontational into being part of addressing the issue of concern,opening up and eastablishing regular conversation about activities and challenges. Using those conversations to gain new perspectives. I have seen them work aggressively with regulating agencies to understand their perspective and framing the discussion to accommodate the difference. It is not easy but the results have change practices and attitudes and aided in the continued successful evolution of the company, being more competitive and more effective. Mr. Hurley seems like the old fashion CEO, my way or be the target of my wrath. IN the end MR. Hurley may will, but the one that will lose will be the Michigan residents and the students.
***
Sun, 05/01/2016 - 7:20am
I'm not quite sure what you are getting at, it seems the purpose of the article was to rebuke what the Mackinaw Center was saying rather than proposing a collaborative effort with someone else. Do you really expect someone to say they are wrong in their thinking as part of trying to show the other side that they are off track?
Matt
Sun, 05/01/2016 - 12:15pm
***, I think the point is that CFM and Bridge holds itself to be a reasoned unbiased source for news and opinion on Michigan issues. To which I’d give then a solid so so, but I don't question their motives even if I'd accuse them of being from a reflexively big government perspective. The comment section is sometimes or often interesting giving a worthwhile different perspective to sometimes poorly thought out or incomplete articles. But too often too many of the comments degrade into a pile of ad hominin attacks, name calling and irrelevance. The usual off topic whining and fear mongering about Koch Bros, Alec, Mackinac Center, Republicans, DeVoses etc etc. is rather unintellectual, uninformative and tedious and provides nothing to the debate that makes Bridge worth reading. I hope we all can do better at this, as I am not innocent either. I'd love to see an ongoing dialogue with the Mac Center authors putting up their data to address Mr. Hurley's contention as to the level of spending current vs 10 or 15 years ago along with Mr. Hurley defending his many debatable points, but too often the questions and answers are just dropped right there.
Matt
Mon, 05/02/2016 - 1:02pm
Dave- I don't think anyone at least myself, would dispute that cuts have been made to higher Ed. My interest is how they relate to tuition hikes, (although I'm admittedly not troubled with students carrying more of the costs of their education, especially given our retention after graduation). But seeing many studies citing substantially above inflation increases in U. personnel compensation, big increases in U. administrative personnel numbers as well as extravagant new buildings and sports programs (even before EMU made the front page), so I’m skeptical that cuts were the entire driver here or that Mi Us were immune to these factors. I’d also point at private college tuition increases pacing public U’s and also that the rapid inflation in higher Ed started well before these cuts came in. Maybe questions for Mr. Hurley, but thanks for the link.
duane
Sun, 05/01/2016 - 5:45pm
***, How a person/organization being challenged, tells a lot about that person/organization and what they want to achieve in how they respond to those challenging what they are doing. Mr. Hurley's article leaves me with the impression that he has not considered the tax impact side of the problem. He makes many good points that I think warrant conversation to better understand how they impact those whose money he wants to spend. Mr. Hurley makes the point about higher education, better health, longer life. He fails to mention the better education has to do with those who reside in the state not simply those who earned a degree here, the healthier/longer lives has to do with lifestyle choices and much of that is established by parents and not so much by advanced degrees. Simply because something is coincidental doesn't make then causational. His approach seem from a point of view of justifying the spending rather then working back from what value the spending is to deliver. It can be as simple as the difference between trying to ensure current educational practices aren't disrupted versus what the students want to do with their degree. If we consider the students want jobs upon graduation, do they want to work in Michigan, etc? I'm not sure Mr. Hurley takes into consideration the people who will pay the taxes? I am surprised Mr. Hurley didn't mention how the universities are collaborating with local businesses, small businesses, local not for profits, etc. showing a creative ways for people of Michigan to get more value for those taxes he wants to spend. There are many other ways to look at the higher education value and how it can provide more direct value to Michigan residents rather than leaving us with the impression of insulated organizations that are a bit aloof.
Jarrett Skorup
Sun, 05/01/2016 - 3:34pm
This piece (in response to the one I co-wrote) is largely a non-sequitur. Even accepting that more college graduates make a state wealthier and better off (rather than college graduates being attracted to job opportunities), Mr. Hurley misses the key point of the piece. That's this: More state spending on universities has little to do with the number of college graduates states have. In fact, there is a negative correlation between state spending on universities and the percentage of college graduates. College graduates, like most people, are attracted to states they want to live in. People want to live in states for a variety of reasons; growing up there, weather, job opportunity, housing costs, etc. Some of these are affected by state public policy - and that's why taxpayer money should go to the important things.
Matt
Mon, 05/02/2016 - 2:03pm
I think looking at the rates at which we're taxed we're in the upper middle range verses other states, but with very low property values and low average incomes it makes the amounts actually paid compared to other state's tax payers look a little lower. Not sure if this is good news and doubt it really makes us a low tax state. The average verses the mean might be interesting.
Bob Balwinski
Tue, 05/03/2016 - 5:05pm
Because two things are related does not make them "correlated." If all people who breathe in and out are eliminated, there would never be another serial killer. Is this a positive correlation, Mr Skorup?
Sun, 05/01/2016 - 4:47pm
All this rubbish gathering and throwing can be settled by creating a cost benefit comparison of in state and out state universities. Such as comparing the costs of staff and total personnel costs, total operating costs, tuition costs to graduate, total student costs per year, graduation percentage; success in providing assistance in job location, state support, Alumni support, scholarship support, debt at graduation, number of students vs professorial staff, etc. I am sure there are more important measurement tools that can be employed beyond those noted above. All serious businesses compare themselves to like businesses so why not analyze universities to see where they excel and fail in comparison? I am sure CEO Hurley will see benefit in determining how much better his colleges can be under the spotlight of comparisons. Your considered response will be appreciated Mr. Hurley. Sincerely - Fred
Observer
Sun, 05/01/2016 - 7:34pm
Mr. Hurley says, "In the 2001-02 school year, state universities received $12,468 from the state for each state student enrolled, and charged on average $6,543 to a state student for tuition. The total cost in 2015 dollars: $19,011." And he says, "In 2014-15, state universities received just $7,496 from the state for each Michigan student, a 40 percent cut in state support per student.The average in-state tuition increased to $11,454 per student. Total cost for an education of a Michigan student: $18,950." But he leaves out crucial information: how did that increase in tuition affect in-state enrollment? I may have missed it, but I don't recall anything in the media about significant numbers of empty seats. If there weren't, then the taxpayers educated the same number of students for 40 percent less. How can he quarrel with that? He goes on to say that out of state and international students "however, are paying significantly more for tuition than they used to, and are helping to subsidize others." That indicates that those students are finding the higher tuition they are paying a good value. If it is a good value for them, then surely the lower in-state tuition is a very good value for Michigan residents. And he says, "The fact is, data from the U.S. Census Bureau and U.S. Bureau of Economic Analysis demonstrate that there’s a positive correlation between state per-student funding for universities and state per-capita income." I have no doubt that is the case, but does he recall from Statistics 101 that correlation does not equal causation? Isn't it possible that states with higher per-capita income can more easily afford to provide higher per-student funding? And given that only 25 to 30 percent of Michigan's high school graduates are prepared to do college work, just how much can we expand the number of college graduates? What percentage of college freshmen succeed in graduating? And it is no doubt the case that "There is, more importantly, an even stronger positive correlation between the education level of states (as determined by the percentage of citizens over 25 with a bachelor’s degree) and state per-capita income." But that is a snapshot in time and says nothing about how states arrived at their current situation. What percentage of their college graduates were educated in state? He doesn't say. It should be noted that a citizen of Kansas does not need a visa to move to Connecticut. He also says, "Without sufficient numbers of college graduates, companies that need them won’t stick around, and certainly won’t move to Michigan. " As noted above, citizens of the other 49 states do not need a visa to come to Michigan. And while it is true that companies find a large pool of well-educated people attractive, that pool will not exist for long if they aren't currently employed. It is to a large extent, a chicken and egg problem. It is pointless to educate more college graduates than can find immediate employment. They will join the high percentage of Michigan's college graduates who leave the state with their diploma. He says that the Mackinac Center for Public Policy "argues that average citizens are better off when taxes are low and public goods – including state support for higher education – are severely limited." Of course, as a member of an intelligentsia that is reflexively hostile to market economies and private property, he places a much higher value on public goods than does the Mackinac Center. He is certainly entitled to that position, but at least in this instance, he has not made a persuasive case for it.
Marion
Mon, 05/02/2016 - 8:40am
Not enough grads?? Oakland University has to use three days to hold graduation, they have so many students. They are building more apartments and adding on to departments because of the number of enrolled students. I don't think there is a lack of students attending college. The problem is definitely retaining them. Student debt is high, but it is not keeping kids from going to college.
Bernadette
Mon, 05/02/2016 - 1:44pm
There is definitely brain drain in Michigan. My question would be what young person would want to stay here? Michigan is not attractive to young folks who want a sustainable environment, with good schools and clean water. Michigan is seeing the results of big business getting whatever regulations passed they want over the past 50 years, having their "ideological" ideas supported by the republicans who have run this state for majority of that time. Low taxes and no regulations that may impact these organizations bottom lines, driven by an arrogance so strong, these same folks can't even see it. This state ranks last in anything good (higher education) and first in anything bad (poverty and clean water). So would you stay here if you were just starting out?
Matt
Mon, 05/02/2016 - 5:29pm
How is this any different than ever? Kids who pick majors with good job prospects seem to get jobs, even in Michigan if they want to stay here. Many do because they enjoy what the state has to offer without any qualm about your concerns. Some kids want to move to somewhere different for a million reasons but I can't say I ever heard because they want higher taxes. Kids who pick majors with lousy job prospects have to move if they can even find a job then. Sounds like you hang with a lot of unhappy people, why do you and they stay?
Matt
Mon, 05/02/2016 - 5:39pm
How is this any different than ever? Kids who pick majors with good job prospects seem to get jobs, even in Michigan if they want to stay here. Many do because they enjoy what the state has to offer without any qualm about your concerns. Some kids want to move to somewhere different for a million reasons- money, family, fun love, but I can't say I ever heard because they want higher taxes. Kids who pick majors with limited job prospects have to move if they can even find a job then. Sounds like you hang with a lot of unhappy, worked up people, so why stay?
duane
Tue, 05/03/2016 - 12:05am
Matt, I must admit that there was a trio of companies that did get much of what they wanted simply because their employee organizations were supportive. The reality was that those employers that waited for regulations to drive their practices lagged in performance.. I doubt she realizes that it was a Republican in the White House established EPA and OSHA. I doubt if she would even accept that there are Michigan employers had more knowledge, more success, more understanding of practices agencies were proposing to regulate for decades before those agencies even consider their proposals and that regulating agencies turned to Michigan employers to help them implement regulation [teaching compliance officers] and coaching other employers. What reality is and what people want to believe can be vastly different. The disappointment is someone like Bernadette are so comfortable with what she wants to hear she can't listen to what others are sharing and won;t even question what is being said. A 'partisan' mind is why so many social problems persist.
Susan
Mon, 05/02/2016 - 3:31pm
A nonpartisan Michigan House Fiscal Agency?!? No such thing, discount their analysis.