Friday, February 16, 2018

UI Funding Worse Than Thought

President Bruce Harreld has shared some numbers regarding financial support the UI receives from Iowans and their elected representatives – with the conclusion that therefore "the university must increase its tuition." Bruce Harreld, "UI Must Press Forward Despite Disinvestment in Higher Education," The Daily Iowan, February 13, 2018. [Photo credit: Nick Rohlman/The Daily Iowan.]

Putting aside, as the old line has it, "I followed him all but the ‘therefore'" regarding tuition increases, the numbers cried out for more analysis. That analysis suggests the Iowa Legislature’s abandonment of higher education (while simultaneously bemoaning the shortage of skilled workers and exodus of young Iowans) is much worse than even President Harreld thinks it is. Our representatives have essentially transformed what Iowans once happily supported, and proudly called SUI -- The State University of Iowa -- into just another (at least 90%) private university.

He reports that, since 1998 (20 years ago), the total state budget has increased from $4.36 billion to $7.26 billion, while the UI’s appropriation declined from $223 million to $216 million. Meanwhile, enrollment increased from 27,871 to 33,564.

To make sense of those numbers, it is helpful to consider the impact of inflation, increase in the number of students, the appropriation per student, and the UI’s percentage share of the total state budget.

What cost you $1.00 in 1998 now sells for $1.50. You can’t meaningfully compare an appropriation of $223 million in 1998 with $216 million in 2018 – as bad as a $7 million reduction may look. You must consider inflation. A $223 million appropriation 20 years ago would be $334.9 million in 2018 dollars. The shortfall has not been $7 million, it has been nearly $120 million!

As a share of the state’s total budget the UI has dropped from 5.1% to 2.97%.

Comparing the appropriation per student for both years also requires an inflation adjustment. In 1998 the state appropriation was $8001.15 per student; this year it is $6435.47. Again, this is not merely a reduction of $1565.68; after inflation, it is a reduction from $12,016.12 -- $5580.66.


For much more on this subject, and its consequences for the State of Iowa, see, Nicholas Johnson, "Iowa’s Economic Foundation? Graduate Education & Research," FromDC2Iowa, May 5, 2014.

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