Plantation Mentality Affects Higher Education Spending

South Carolina colleges and universities have been on an appropriations diet for a long time.
State funding for two-year and four-year public colleges and universities in the proposed 2014-15 budget — $458 million — is about where it was 27 years ago when lawmakers appropriated $441 million for higher education.
After 1988, funding steadily grew to a high of $781 million in 2001. For several years, it hovered around $650 million before taking a dive in recession years to a low of $410 million in 2012.
But one thing has been pretty consistent over these three decades — the percentage of General Fund revenues, or state tax dollars, that has gone to higher ed has dropped year after year, from 16.8 percent of appropriations in 1986 to 7.1 percent in 2013.
So to say that proposed funding of $458 million in 2014-15 is more than it was 27 years ago is, in reality, misleading. Why? The numbers haven’t been adjusted for inflation. If that is done, $441 million in 1988 dollars had the buying power of $881 million today. In other words, higher education has been squeezed out of about half of its General Fund appropriation over the years.
It used to be that public universities like the University of South Carolina, Clemson University or Winthrop were able to refer to themselves as “state-supported” institutions. Now with state dollars comprising less than 7 percent of what a university runs on, perhaps it’s better to call them “state-related” institutions.
What’s really damning about the state’s downward spiral of support for higher education operating budgets is the impact it has on South Carolina in several ways:
Higher Tuition Rates. Because costs at colleges are not going down, having less in state money has put pressure on schools to generate revenues in new ways. That has meant skyrocketing tuition rates, particularly for out-of-state students. South Carolina colleges on the whole have the highest tuition rates in the Southeast, according to the Southern Regional Education Board. In a 16-state region stretching from Delaware to Texas, the Palmetto State’s public four-year college tuition rate last year was $9,776. Most were under $7,000 a year.
Lack of vision. A strategy pursued for decades by North Carolina to pull people out of poverty was to invest in higher education so they could get better jobs and make more money. As reported in the March 28 issue of Statehouse Report, Clemson says a graduate will earn $872,000 in a lifetime more than someone without a degree.
Specific Neglect. After the Great Recession ended three or so years ago, the state started taking in more tax dollars and restoring budget cuts made at the end of the Sanford administration. In recent years, state coffers have had $1.4 billion in new tax revenue, according to Statehouse sources. Want to guess how much has been restored to higher education in the intervening years? Just $20 million.
So why has the General Assembly neglected higher education, recently and over a period of three decades? Here are three reasons:
Other Sources Of Money. Because higher education institutions have their own revenue — tuition — the General Assembly doesn’t take its funding responsibility too seriously. Members figure if schools need more money, they can raise it, not rely on taxpayers.
Short-Term Thinking. State lawmakers have no long-term plan on how to nurture the state. Instead of having a vision for what South Carolina can be, they head to Columbia every year with only one true mission — to get a budget for that year to meet the next year’s needs. This approach is similar to Wall Street’s focus on quarterly reports over long-term, steady growth.
Stuck In Past. South Carolina still has a plantation culture replete with bosses (legislators) who want to control workers (taxpayers). By providing more education to people, bosses lose some control. And Lord knows, bosses don’t want to lose control.
It’s time for South Carolina to get away from plantation spending on higher education and invest in a long-term strategy to prepare students for college and for them to be able to attend at affordable rates so they can have more knowledge and build more wealth. The status quo of incrementalism is unacceptable..
Andy Brack is editor and publisher of Statehouse Report. He can be reached at brack@statehousereport.com.