Austerity budgets, fiscal squeezes, and territorial obligations: the end of an era?

These two graphics (both released in the last two days) capture broad-based aspects of the fiscal squeeze confronting public higher education in the United States.

Source: Moody’s (2011) Weekly Credit Outlook, 31 October, p. 43.

Source: ‘Chart: One Year of Prison Costs More Than One Year at Princeton,’ The Atlantic, 1 November 2011. A direct link to the chart by Joseph Staten (an “info-graphic researcher with Public Administration“) is available here.

While these graphics are not comprehensive in nature, and I’m positioned in one specific state (Wisconsin), a number of dynamics are arguably intersecting:

  • Progressively reduced levels of state support for public higher education (see image 1 above). Despite this, there is no correlation, whatsoever, between declining levels of state support and the desire to govern public higher education systems and institutions.
  • A public university funding burden shifting to student-derived revenue (primarily via tuition fees). Indeed we’re past the tipping point now for, as Moody’s stated this week, “[a]lthough most colleges and universities are improving operating efficiency and expense containment, a college’s ability to increase net tuition remains a critical credit risk factor for the sector;”
  • Ideologically-derived views emerging, within some ruling political circles, that frame fiscal crisis as an integral element of engendering structural change within higher education systems and institutions. A case in point is this Cato Institute report (How Much Ivory Does This Tower Need?) and associated video coverage, both released last week;
  • Given the above fiscal constraints, increased competition for state support (e.g., prisons, as patently evident above);
  • Enhanced use of the principle of ‘flexibility‘ as a vehicle to (a) increase efficiencies, (b) ameliorate a symbolic but only small portion of budget cuts, and (c) gain enhanced control over the governance of higher education systems and institutions.

One of the ironies of the situation is that public universities in the United States are actually, despite their reputations, not very market-oriented in comparison to those in countries like Australia, New Zealand, and England (at least when it comes to one revenue stream – fee paying foreign students- that could be enhanced). See, for example, this Ombuds report (26 Oct 2011) from the Australian State of Victoria which outlines a variety of serious problems with the way Australian higher education institutions handle and support (or fail to) their foreign students.

In my biased opinion (after living here for 10 years), most of the ‘US publics’ are remarkably ‘public good’ and scholarly in orientation: they have long been willing to focus on serving their respective states’ residents, while also indirectly supporting foreign students via graduate fellowships, TA- and PA-ships, and so on. Of course they are mandated to support in-state students (especially at the undergraduate level), but still, the necessary ideological/regulatory work to engender systemic change to draw in substantially more foreign students has not really occurred, to date.  This is evident in the statistics profiled in one of my recent entries (‘International student mobility highlights in the OECD’s Education at a Glance 2011′), which again shows the US with a relatively low percentage of foreign students relative to total student numbers.

Will the future see a continued fiscal squeeze put on public higher education in the US? If so, what will ‘give’ even more that it has, to date? I’m particularly curious if the public mandate to serve state residents will loosen up such that the territoriality of admissions becomes progressively, if haltingly, more and more global. This is likely to be a hot-button issue in most US states, but it is one that needs to be confronted and debated in a serious way given the structural problems that regional (ie state) politicians have helped to create via year-after-year budget decisions that generate the patterns evident in the two images above. One way or another, confronting the austerity-induced fiscal squeeze that public higher education faces in the US cannot help but be a messy affair.

Kris Olds