Picking Statistics to Push for More Taxpayer Funding of Higher Ed

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Budget season has arrived in Rhode Island, which means it’s time for credulous journalists to pass along spin from powerful insiders preaching the need for more taxpayer funding.  Here’s Linda Borg, in the Providence Journal:

Rhode Island ranked 41st in the nation on state spending per student in public higher education during the 2015-16 school year.

Among the six New England states, only Vermont and New Hampshire spent less on their public colleges, according to a report from the Center on Budget and Policy Priorities, a nonpartisan research institute in Washington, D.C.

The latest data also show that Rhode Island’s support for higher education declined 23 percent from 2008 to 2016. By contrast, the national average dropped 15 percent.

Two factors make this line of argument highly misleading, to the point of spinning things around backwards from how we ought to look at them.  First, as I’ve written before, a business model is absolutely bizarre if an increase in customers creates a shortfall in revenue.  To the extent that each additional student’s tuition exceeds the marginal increase in costs per student, higher enrollment should mean more money.  And to the extent that the student’s tuition falls short of the marginal increase, the increased enrollment indicates room to increase tuition.

The CBPP’s “drop” in funding is calculated per student.  That means that states with big increases in enrollment will show a “drop” in funding, even if funding goes up substantially.

Second, as I’ve also written before, Rhode Island has a high percentage of out-of-state students.  Here again, success would show as failure by CBPP’s measuring stick.  Out-of-state students should be a source of additional revenue helping the public colleges and universities fulfill their primary role of providing educational opportunities for the people of the state.  Yet, the more we attract, the lower our funding will appear to be per student.

In summary, if our colleges and university are being successful, attracting more students from in state and out of state, they will appear to be losing public funding.  If it weren’t government, these arguments would be a scam.



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