Half the investment on colleges means a full measure of trouble for Michigan

To grow Michigan’s economy, we need more skilled workers, an estimated 1 million two- and four-year college graduates are needed to fill the job vacancies by 2025. Employers all over our state are complaining they can’t find workers with adequate skills to meet their job openings.

The logic of increasing state support for higher education is compelling.

Yet, under both Democrats and Republicans, Michigan, for a decade or more, has pretty much led the nation in chopping higher education budgets – by $1 billion, by last count. To offset all the reductions in postsecondary funding, we’d have to defund nine of our 15 public universities! 

We sustain this disinvestment by assigning low importance to higher education. We place a higher priority on warehousing felons in our prison system than on educating our young people. In fiscal 2012, we’ll spend 76 percent more general fund dollars on prisons ($1.87 billion) than in support for public universities ($1.06 billion).

Our long history of cutting budgets for universities and community colleges is self-defeating and mystifying.

Because we have chosen to cut support for colleges, they’ve increased tuitions, which, in turn, balloons debt loads for struggling students and their families

The compound effect on our state’s young people and their families is terrible: high tuition; high student debt level; out-migration of our most talented who are dispirited by our poor economic prospects.

Every decade or so, our state summons up the energy to consider higher education policy. There was the Commission on the Future of Higher Education during the Blanchard administration, followed by Lt. Gov. John Cherry’s Commission on Higher Education and Economic Growth two decades later. I served on both. And the reports of both are today gathering dust on library shelves.

We simply cannot and must not accept this endlessly wrong-headed inability to recognize that investing in human capital is the best and maybe the only way to assure long-term prosperity.

Right now, state colleges and universities are not popular in Lansing. Lawmakers complain about arrogant universities hiding behind their constitutional autonomy. Some threaten to reduce appropriations as punishment for various “sins” such as conducting stem cell research or providing health insurance to students.

Nor is there any doubt that Michigan public universities are in political trouble with the voters. A big part of their problem comes from the rapid increase in tuition over the past few years.

Why has this happened?

For one thing, there’s the vicious circle I mentioned: Michigan’s long tradition of slashing more than $1 billion state support for colleges and universities from 2001 to 2011. Tuition increases at Michigan public universities have risen over the same period by almost exactly the same $1 billion cut in state support.

Today, four years of tuition at a state university for a Michigan student costs an average of $38,215; that’s $20,000 more than an in-state student pays at a public college in North Carolina, a state that now has almost as many people as we do.

While Michigan was cutting support for colleges, once-backward North Carolina was investing in human capital. It now spends $2.5 billion supporting roughly the same number of students and colleges on which Michigan spends $1.1 billion.
North Carolina spends roughly $11,000 per college student; Michigan, $4,597. Not surprisingly, tuition costs in North Carolina costs are nearly half those at Michigan public universities. Duh.

The difference is nothing less than a multi-million-dollar “Michigan college user tax.” There’s still time to fix this, but history will show conclusively that Michigan squandered its prosperity during the 1980s, when we decided not to invest in our human capital systems – early childhood, K-12 schools and higher education institutions.

When the Great Recession hit in the 2000s, our political and policy institutions were out of money and out of tune with each other.

It’s way past time for everybody -- universities, politicians, the business community and especially students and their families – to hit the “reset” button and get away from the adversarial Lansing culture. Sitting around a big table and talking quietly might be a good way to start.

Editor’s note: Former newspaper publisher and University of Michigan Regent Phil Power is a longtime observer of Michigan politics and economics. He is also the founder and chairman of the Center for Michigan, a nonprofit, bipartisan centrist think–and–do tank, designed to cure Michigan’s dysfunctional political culture; the Center also publishes Bridge Magazine. The opinions expressed here are Power’s own and do not represent the official views of the Center. He welcomes your comments via email.

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Wed, 05/16/2012 - 12:14am
I wonder how long Mr. Power has been complaining about not spending enough on education and if he has ever looked past the money to see if the student learning decline began before the spending decline. That probably doesn;t fit his model of what makes education work. Go for the money and blame blame blame for there not being enough, never enough. Someday it would be interesting to hear someone talk about the student's role in their learning. No that would mean work and responsibility, we surely don't want to burden anyone with that.
Tue, 05/22/2012 - 8:41am
Spot on Duane. Mr. Power places far too much emphasis on the old positive externality argument to subsidizing education for all the benefits that eventually accrue to society--educated workforce, better, smarter citizens, etc. Mr. Power needs to revisit the law of diminishing returns to better understanding why the dollars spent on college are not as impactful as those spent yesterday and 20-40 years ago. Obtaining a skilled workforce is a cat that can be skinned in a number of different ways other than the expensive and wasteful college route: company incentives for apprenticeships, emphasis on private certifications, actual learning at the K -12 levels. Mr. Power simply ends up being a shill for the higher education union.