Students don’t need to be reminded that tuition costs have skyrocketed in recent years. But what many don’t know is that, in inflation-adjusted terms, the University — like many other universities — isn’t spending more money than it used to spend. Increased tuition, rather, is in large part due to decreased levels of support from the state government. The state Legislature — which once provided the majority of the University’s funding — now provides just 6 percent of the University’s annual operating budget and 22 percent of its general fund, a number down from 78 percent compared to 50 years ago. Despite having an elected Board of Regents, the University is now nominally public.
Considering this decreased funding, it’s no wonder that even with record donations, a skyrocketing endowment and painful budget cuts, the regents have raised tuition substantially and repeatedly. The lack of state support has priced higher education out of the reach of many young people from low and middle-income families, which endangers the University’s mission of providing an “uncommon education for the common man.” Legislators often point out that the drastic increase in the University’s endowment has led to increases in financial aid and that low and middle-income students can still attend college in what they refer to as a “high tuition, high aid” model.
Unfortunately, the numbers tell a different story. In the years 1997-2007, before the affirmative action ban began to further decrease enrollment among underrepresented groups, the University saw a 10-percent decrease in students from families with yearly incomes between $10,000 and $74,000 and an 8-percent increase in students from families with yearly incomes more than $200,000. Enrollment of underrepresented minorities decreased too: African-American enrollment fell from 8.4 percent to 6.7 percent.
The University’s chapter of the College Democrats has a longstanding tradition of making annual pilgrimages to Lansing to remind state legislators of their responsibility for higher education. Every time, we’re met with the familiar refrain that in hard economic times, everyone has to share in the sacrifice. A few months later, state appropriations for colleges and universities are cut. Shared sacrifice makes for compelling rhetoric, but just a little digging shows that it’s disconnected from reality.
While education and social services have been gutted, taxes have fallen precipitously and mass incarceration — on which the state spends significantly more than it does on higher education — continues unabated. If legislators were willing to modernize an outdated tax structure, there would be more than enough money to reliably fund higher education and balance the budget with taxes lower — as a percentage of gross state product — than they were a decade ago.
Back in the late 90s, the state brought in about 9.5 percent of personal income as revenue. Today, it brings in about 6.9 percent. That drastic decline means that the state collects $9 billion less in revenue than it would have done if it was collecting the same percentage of our income as it did a decade ago. The cuts aren’t only due to intentional tax cuts, but also because of an outdated tax code, which — most egregiously — rarely applies the sales tax to services. The service sector is the largest and fastest growing segment of the economy, and most other states recognize this fact. In Michigan, however, we’re trying to support government with the modern day equivalent of a tax on agricultural goods in the midst of the industrial revolution.
In the context of the state budget, $9 billion is a significant loss especially when the total real cuts to higher education spending in the last decade total just over $1 billion annually. The state is facing a gap of approximately $1.85 billion for the next fiscal year. By bringing back only a small portion of the taxes levied a decade ago, the state could fill the perpetual budget deficit and restore funding to higher education.
College Democrats, with help from Roosevelt Institution — a student policy organization — have detailed the specific revenue increases and spending cuts necessary to allow the state to reinvest in higher education. We took our report to Lansing when we met with state legislators on Tuesday. Of course, our proposal likely won’t be adopted, but the message should have been clear: We can balance the budget without doing it on the back of students. And it takes little more than a notebook, a calculator and Google to figure out how.
State legislators aren’t abandoning higher education because it’s the only choice, but because it’s the easy choice.
You can view our full proposal at http://umichdems.com.
Zachary Martin is an LSA senior. He is chair of the University’s chapter of College Democrats’s education committee.