Largely without serious public policy analysis or debate, a series of individual state budget and revenue decisions over the past decade have made states increasingly smaller shareholders in their public colleges and universities. Public colleges and universities, which enroll 77 percent of all American college students, draw more than half of their operating support from taxpayers in the 1980s; today, money from state coffers provides about 30 percent of their funding. The manifestations of this shift, tax cuts and spending caps have converged with outdated fiscal structures and budget practices to create long-term state deficits, which then lead states to shift more responsibility for funding higher education from state resources to individuals.
In this article, we will see that states should clearly understand what benefits public dollars invested in higher education are buying and, correspondingly, what benefits are foregone when such funding is reduced. Meanwhile, colleges and universities should understand that they cannot blissfully expand access without the resources to serve students effectively and ensure that they succeed.
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