Government Universities and Colleges, Where Economics Are Suspended

justin-katz-avatar-smiling

Being very familiar with the struggles of razor-margin private schools, I can attest that the rules of economics do apply, there.  Put more children in a classroom, and tuition can be lower.  Conversely, at schools for which seats are full and, therefore, competitive, the market will bear higher prices.  These are the challenges and decisions that all business owners face.

Based on the explanation of Rhode Island government colleges and universities about why they need tuition increases, it appears that the laws of economics are suspended on state campuses:

“While we are reluctant to raise tuition, the colleges and university have had tuition freezes for four of the past five years, and they need increased revenue to cover increased expenses,” said Bill Foulkes, chairman of the council. “Even with these tuition increases, our higher-ed institutions are among the most affordable in the region, coming in at or below the average cost of their regional peers.” …

In a statement, URI President David M. Dooley said, “The University of Rhode Island has been experiencing incredible growth in enrollment and in improved academic excellence over the past few years. In order to continue this positive momentum and recruit world class faculty, the university must make strategic investments to support this growth. The university takes very seriously any increase in tuition and strives to maintain affordable and accessible public education to all students.

“There are still many steps in the state budget approval process, and the university will continue to advocate for increased state funding in order to minimize any tuition increases. …”

The narrative would be clear and consistent if the higher education leaders were saying that the demand is creating an opportunity to invest, because the market will bear higher tuition rates, rather than insisting that higher enrollment somehow makes it more difficult to pay the bills.  If anything is making it more difficult to pay the bills, it isn’t increased enrollment, but the heavy hand of government:

In a video made to explain the increases to her students, faculty and staff, CCRI President Meghan Hughes said they were required in part to meet “increased mandated health care and staffing costs for the entire college.”

Gee.  To watch insiders in Rhode Island, one would think government mandates had no effect on the economy.  Imagine being a Rhode Island business that can’t simply raise prices or lobby for more money from taxpayers!

Speaking of taxpayers, Dooley may have given us the key to understanding the strange economics of government higher ed when he noted his intention to offset tuition increases with government largess.  After all, Rhode Islanders’ wallets are a bit easier to pry open if unavoidable costs are leaving no choice but to increase revenue in order to maintain services.  The whole transaction starts to take on a different feel if the argument is that students would be willing to pay more money so taxpayers should pay it instead.  Treat it as a technical term or a moral judgment, but that’s perverse.

Indeed, the statement that the colleges and university haven’t raised tuition is arguably disingenuous.  Every year, increases in taxpayer funding of higher education are explicitly sold as a means of minimizing or avoiding tuition increases.  The millions and millions of dollars in new debt that we invest in the schools should likewise decrease the pressure on us to subsidize tuition by making the product more attractive for customers.  Only in government does more spending always require more spending, without relief.

Let’s give taxpayers a break for a few years.  After all, increased costs (yes, including taxes) go right to our bottom line budgets, too, and we can’t make people give us more money under threat of losing their property or going to jail.  If the state government wants to help colleges and universities keep tuition down, then elected officials should get rid of the mandates that make life more difficult not just for government higher ed, but for all of us.

Of course, that approach would improve the economy for everybody and help families be more independent, rather than furthering the State of Rhode Island and Government Plantations.



Quantcast