April 7, 2017

CTBA Report Shows How State is Harming Higher Ed, Economy

By William S. Bike

BETWEEN 2000 and 2015, Illinois cut nearly $1.4 billion from General Fund appropriations to higher education—even before the ongoing budget crisis, which has cost Illinois colleges and universities over a billion additional dollars. That is one finding from Illinois’ Significant Disinvestment in Higher Education, a recent report released by the Center for Tax and Budget Accountability (CTBA).

“INVESTING IN higher education has always been important,” said Ralph Martire, executive director of CTBA. “But in today’s economy, the strong correlations between post-secondary education and economic viability make it more important than ever.”
THE STUDY details the drastic cuts to higher education in Illinois both during the current budget crisis, with General Fund appropriations falling from $1.95 billion in fiscal year (FY) 2015 to $755 million in FY2016 and $843 million in FY2017, as well as over the longer term.
“BETWEEN 2008 and 2015, Illinois cut per-student higher education funding by 54 percent—more than every state but Arizona,” said Danielle Stanley, CTBA research associate.
THE REPORT also describes how each dollar of funding cuts to institutions of Higher Education results in $2.29 lost to the State economy, as fewer students, and reduced worker wages, mean less economic activity generated by, for example, purchases at local stores.

IN SECTION One, “Supporting Higher Education Makes Economic Sense,” the report notes that the only workers in “Illinois specifically who have seen their incomes grow at a rate greater than inflation…are those with a college degree. It is no wonder, then, that between 1979 and 2012, those states that realized the greatest increases in productivity also had the largest share of adults with a college degree.”

SECTION TWO, “Illinois’ General Fund Investment in Higher Education Has Been Declining Since FY 2000,” features a chart that shows how Springfield since 2008 has under-funded the Illinois Board of Higher Education’s requests for dollars needed to support the State’s Universities and Colleges:

Chart that shows how Springfield since 2008 has under-funded the Illinois Board of Higher Education’s requests for dollars needed to support the State’s Universities and Colleges.
Chart courtesy Center for Tax and Budget Accountability.
THE REPORT notes that adjusted for inflation, FY 2015 State support for higher education was down $1.39 billion, or 41 percent, from FY 2000 levels. “That sustained disinvestment in higher education is difficult to justify from either a good government or economic policy standpoint,” the report states.

THE CUTS for higher education in FY 2016 were “truly unprecedented,” according to the report’s Section Three, “Higher Education Funding Suffers Historic Year-to-Year Cut in FY 2016.” Higher education in Illinois experienced a “cut of some $1.323 billion or 67.8 percent from FY 2015 levels,” the report states.

“PROVIDING FURTHER evidence of the State’s self-imposed race to the bottom in higher education funding, Illinois now holds the undesirable position of being one of only nine states that has cut per-student higher education funding by at least 30 percent since the start of the Great Recession,” the report added.

SECTION FOUR, “FY 2017 Funding for Higher Education Remains Significantly Below FY 2015 Levels,” shows that FY 2017 funding remains $1.24 billion, or 63 percent less, than in FY 2015. Of the State’s universities and colleges, the University of Illinois suffered the largest cut in total dollars: $298 million—a 46 percent decrease compared to FY 2015.

“ILLINOIS HAS cut per-student higher education funding by a greater percentage than any of the other 15 largest states in America, except for Arizona,” the report states.

“CONSEQUENCES OF Illinois’ Disinvestment in Higher Education,” Section Five, counts among those consequences higher tuition costs, reductions in MAP grant funding, and increased debt for State colleges and universities. Another consequence is reduced enrollment for many State universities, although UIC’s enrollment actually increased by one percent between 2015 and 2016.

“RACIAL DISPARITIES Reinforced by Higher-Education Funding Cuts,” Section Six, points out that when MAP grants are reduced, as Illinois has done, “students of color tend to get hit the hardest because they rely more heavily on MAP grants than do their more affluent and predominantly white counterparts.

“ONE WOULD hope the Governor and General Assembly in Springfield would go the extra mile to help traditionally disadvantaged young adults who want to improve their lives and afford college,” the report states. “Unfortunately, just the opposite is occurring in Illinois.”

THE LAST section, “Higher Education Cuts Hurt the Economy, talks about the economic multiplier effect. When funding for public universities and colleges holds steady or increases, those institutions hire new employees and enroll more students who “then engage in economic transactions in the local community—like renting apartments, buying clothes, or getting their car repaired, that otherwise would not occur,” the report states.

“THEN THOSE businesses that sold the clothing or fixed the car, in turn spend the money received from the student or professor in question, generating more economic activity. In this manner, one person’s spending becomes another’s income, which is in turn spent on other purchases in the local economy,” the report notes.

THE CENTER for Tax and Budget Accountability describes itself as a bipartisan, nonprofit research, and advocacy think tank that works across ideological lines to promote social and economic justice for everyone. For more information, go to www.ctbaonline.org.

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