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Guest Opinion: Funding pushes UM toward privatization

Everyone agrees that higher education must play a vital part in economic and social development, but not everyone agrees that state government must assign priority to higher education in preference to other needs when state revenues fall. With growing need and rising demand for access coupled with declining state support, can public higher education fulfill its public mission?

By GEORGE M. DENNISON
University of Montana President

During the ’60s and ’70s, when states appropriated a larger share of their revenues to support higher education, the question of who benefits from and who pays for higher education typically elicited the response that the public should pay from 70 to 80 percent of the cost.

As the late Howard Bowen argued at the time, the public should pay the majority of the cost because the public at large benefits most from an educated and engaged citizenry, a productive labor force, increased tax revenues, and the economic and cultural development stimulated by the education, training, and technology transfer provided by higher education. As a trade-off in exchange for the sacrifices they make in foregone income and the dedication of savings to pay for college expenses, those who attend college receive incidental benefits in the form of higher salaries, lifetime incomes, and a higher quality of life. This argument persuaded policy makers to make the public investments in higher education that sustained the growth during the ’50s, ’60s, and early ’70s.

Today the question of who benefits and who pays elicits a different reaction. According to the common response, the student should pay the larger portion of the cost because the student receives the major benefits in the form of a higher salary, increased lifetime income, and better quality of life. Without question, the new argument rationalizes the reality of inadequate state revenues to satisfy all needs. The pressures on state dollars have increased dramatically to attend to the rising costs of health care, the demand for an effective penal system, the escalating needs of K-12 education, and the effort to refurbish aging infrastructure such as transportation and water systems.

Because higher education has alternative funding from tuition and fees, policy makers shift the cost to the students and explain tuition as a form of user fee.

How often do we hear that a college education pays because of the return on the investment made by the graduates? But what about the public benefits? What will happen if we ignore them for an extended period? What about the return on investment by the society at large?

These developments have produced a drastic change in the finances for The University of Montana. In 1992, the university expended about $47 million to support the educational programs serving some 10,000 students, with about $3 of state appropriated funds for every $1 of tuition and fees. For 2003, the university will expend about $97 million for the educational programs serving about 12,000 students, but with $1 of state appropriations for every $2 of tuition and fees. Those who discern a trend toward privatization of public higher education have this dramatic reversal in mind. In 1992, the State provided fully 74 percent of the cost of the educational programs, but will provide only 34 percent in 2003.

Despite a doubling of the budget for the educational programs during the years from 1992 to 2003, the university will have only $1.4 million more state dollars in 2003 than in 1992, without taking account of inflation, but with 2,000 more students to educate. Fully 98 percent of the increased funding has come from tuition and fees and private support, not from the state. No other state has pushed privatization to this extreme.

Leaders in the private sector have established the Alliance for Montana’s Future to inform Montanans that public higher education represents an investment in the future, not a drain on resources. This educational effort must continue to make certain that all Montanans understand the critical role of higher education for the maintenance of economic and social well being. If people agree that public higher education has a special role to play, they will have to choose from among three alternatives:
# Continuation of the decline in state support
# Stabilization of the current level of support
# Reversal of the decline and establishment of an appropriate level of public support

Whatever the public decides, we in public higher education must control costs, stand accountable for the prudent use of available resources, and sustain the public mission in service to the people of Montana.

Copyright © The Billings Gazette, a division of Lee Enterprises.

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