Higher Education
To characterize Florida’s recent treatment of its higher education system, we borrow from the harsh old grading scale at Princeton. Six was a garden-variety F, but there was an even worse mark: a 7, for “flagrant neglect.”
Florida universities are in their current fix of turning away students, losing professors and facing more rounds of cuts because, even during the boom times early in the decade, the state neglected to increase funding by much or allow meaningful tuition increases. Our public university tuition is currently second to last among the states.
The first Tough Choices report discussed higher education issues relatively briefly. Given the LeRoy Collins Institute’s academic ties, we wondered whether a bigger emphasis would seem self-serving. The last two years have made a bad situation so much worse that we want to lay out the particulars.
After lean years in the early 1990s, Florida universities received robust appropriations growth during the prosperous late 1990s. Starting with fiscal 1995-96 through fiscal year 2000-01, general funds grewby almost 60% cumulatively. The brief recession at the start of this decade was followed by the real estate boom years, but this time university funding barely increased. (See Chart 1 – the apparent jump in 2004-2005 is mainly due to an accounting change).
An index of the stall-out is that in 2002-2003 university funding was 9.3% of the state budget. By 2004-2005, it had fallen to just 7.9% (against a national average of 10.6%).
In Florida, state and local government support of public and private higher education was $193 per capita in 2006, well below the national average of $260.
All this occurs during a period when university full-time equivalent enrollment has risen from 100,000 in 1988-89 to more than 180,000 in 2005-2006. In that same period, headcount roughly doubled to 300,000. (See Chart 2).
Between 2001 and 2006, enrollment in Florida public universities increased 25%, compared to 14% in other Southern states.
In contrast to the K-12 enrollment lull, demand for university enrollment continues to grow. Right now it is being held back by the expedient of not providing service. By some estimates, as many as 80,000 qualified students will be turned away over the next five years.
Looking at tuition, Florida remains very low compared to peer Southeastern states (See Chart 3). Between 2003 and 2006, tuition grew 24% across the country, 21% in the Southeast, but only 2% in Florida.
A version of the same gap is evident if you look at in-state tuition charges at flagship universities. (See Chart 4). Back in the day, the University of North Carolina was slightly cheaper than the University of Florida – now it is about a third higher.
The community college system has done somewhat better in state funding increases during this period, though it will likely take some of the brunt of current budget cuts. The Florida Resident Access Grant, which effectively subsidizes in-state enrollment at Florida’s private colleges, has been zeroed out in the Governor's 2008-2009 proposed budget.
A series of studies by business groups like the Florida Chamber Foundation and the Florida Council of 100 have documented the economic return on investments in higher education. The combination of strong university research capability and a workforce heavy with college and advanced degrees can foster clusters of high-wage jobs and fast development. North Carolina’s Research Triangle provides the most obvious example in the Southeast.
Though recent governors and legislative leaders give lip service to the ideal of a more diversified economy, we think the evidence is clear that the sentiment hasn’t been backed by investment lately.
The Tough Choices report, like a number of other studies, noted that the Bright Futures scholarship program and Prepaid Tuition Plan together act as a powerful brake on tuition increases.
As discussed in the recommendations section of this report, we think Bright Futures is ripe for reform both in its lax definition of academic merit and its coupling of awards with tuition. Described by former Chancellor Charles Reed as “one of the dumbest public policies ever,” Bright Futures works out to a massive subsidy for the well-to-do, for whom Florida’s paltry tuition is not much of a stretch.
We would also observe that the Prepaid Tuition Plan has ample reserves to stay solvent if tuition were aggressively increased. The main effect of big tuition increases would be to raise the price of new contracts, which would still be a bargain and a good investment vehicle.
When Reed, now president of the California State University, spoke at a Collins Institute gathering in August 2007, he said Florida’s neglect of its universities was a declaration that we’re “cheap and proud of it.”
He went on, though, to describe a better way in his adopted state, dating back to securing a multi-year commitment in the 1950s to a master plan to build a system that would combine excellence and access.
The commitment, now known as “the Compact,” gets renewed periodically and provides regular increases in base funding and defined increases for enrollment growth as well as allowing governing boards to set tuition. Governors Pete Wilson, Gray Davis and, most recently, Arnold Schwarzenegger have all agreed to honor the concept, in good fiscal years and bad.
Florida’s university presidents have proposed a five-year compact in the California vein with committed funding in exchange for delivery of agreed-upon performance goals. Tallahassee political leadership blew the idea off.
For now, Florida’s higher education policy amounts to wing it and wither.