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National CrossTalk Summer 1999
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News From The Center

ALTHOUGH HIGHER education is enjoying prosperous times, they are not likely to last, Harold A. Hovey, president of State Policy Research, Inc., warns in a paper recently published by the National Center for Public Policy and Higher Education.

"The last five years have been about as good as it gets in state funding of higher education," Hovey writes in a report titled "State Spending for Higher Education in the Next Decade."

State appropriations have increased more than the inflation rate; tuition has been frozen in some states and reduced in others; new campuses have been built or planned and new state scholarship programs have been started.

But "the national budget projections suggest that this environment will not continue," Hovey says. Simply to maintain the current level of services, "state support needs to increase by nearly six percent a year in baseline projections."

For most states, this would mean either raising taxes substantially or favoring higher education over competing public service demands, such as elementary and secondary education, health, welfare and prisons. Hovey does not believe either of these possibilities is likely.

"If extraordinarily good times were followed by normal times, it might be possible for states to make fiscal adjustments in less than a crisis environment," Hovey writes. "However, extraordinarily good times are usually followed by corrections in the private economy called recessions. When they occur, states often are caught in a situation where their budgets are hugely out of balance."

And when that happens, higher education is vulnerable because it is the largest discretionary spending item in most state budgets.

Higher education's share of state spending has been declining in recent years, Hovey says, in part because governors and state legislatures tend to think that public colleges and universities have more fiscal flexibility than most state agencies. For instance, in most states they can raise tuition to soften the impact of budget cuts.

Sharp increases in the cost of Medicaid and state corrections systems in the late 1980s and early '90s also have cut into higher education spending. "Their gains had to come at the expense of other programs," the paper states.

"The currently relatively generous increases in state support of higher education do not reflect changes in patterns and practices of state budgeting," Hovey concludes. "They only reflect the standard response to extraordinarily strong fiscal conditions. They will disappear when those fiscal conditions disappear. Both will disappear soon."

In a second paper published this summer -- "All One System: A Second Look" -- Harold L. Hodgkinson examines the relationships between higher education and the public schools.

When Hodgkinson, who is director of the Institute for Educational Leadership's Center for Demographic Policy, first studied this issue in 1985, he found that "people in one segment of the educational system existed in almost total disregard of the efforts of all the other segments."

Fourteen years later, "things are beginning to shift slightly," Hodgkinson writes in the introduction to his "second look." There is a lot more discussion about the need for cooperation between elementary and secondary schools on the one hand and colleges and universities on the other, he finds, but few specific steps have been taken to bring about that collaboration.

The Hodgkinson paper is the first in a series of K-16 publications co-sponsored by the National Center for Public Policy and Higher Education and the Institute for Educational Leadership.
A second paper, written by P. Michael Timpane, senior advisor for educational policy at RAND and former president of Teachers College, Columbia University, will be published this fall.

The Center also recently published a report on higher education policy in the state of South Dakota, the first in a planned series of state case studies. The report was written by Mario Martinez, assistant professor in the Department of Educational Management and Development at New Mexico State University.

The Hovey paper and the Martinez report on South Dakota are available on the World Wide Web (http:/www.higher or by fax from the San Jose office of the National Center for Public Policy and Higher Education, (408) 271-2697. The Hodgkinson publication is available for $15 per copy and can be ordered by sending e-mail, fax or a letter to The Institute for Educational Leadership, 1001 Connecticut Avenue, Suite 310, Washington, DC, 20036. Telephone: (202) 822-8405; fax: (202) 872-4050; e-mail:

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