Op-Ed: 'College user tax' crippling

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Phil Power

January 12, 2012

By PHIL POWER Columnist The Record Eagle Tue Jan 31, 2012, 12:37 PM EST

For more than a

decade, Michigan’s

elected officials

have imposed what

amounts to a severe

tax on the hundreds of

thousands of students

who attend our public

universities.

The consequences of

this “college user tax”

— clearly amounting to

millions of dollars per

year — include raising

the cost bar for young

Michiganders to attend

college by thousands, saddling

graduates and their

families with crushing

college debt and making

higher education impossible

for others.

Worse, it is eroding

Michigan’s ability to

resurrect our struggling

economy. According to a

study released this week

by Bridge Magazine, an

online publication of The

Center for Michigan, the

nonprofit, non-partisan

organization I founded

five years ago: “Michigan

families pay more to send

their children to state

universities than families

in almost any other

state.”

The reason?

A “decades-long decision

to skim money from

the state’s 15 public

universities.” Michigan

gives less money to its

public universities than

almost any other state. As

state support drops, more

of the cost of college is

shifted to students and

their families.

Bridge’s analysis found

that 12 of Michigan’s 15

public universities had

net student costs higher

than their peer institutions

across the country.

The University of Michigan,

for example, had a

net cost per student of

$16,888 in 2008-2009, the

most recent year available

— more than $4,000

above equivalent institutions.

Michigan State, at

$14,708 net cost, was the

15th highest of 73 schools

in its peer group. Only

Wayne State, U-M Dearborn

and U-M Flint had

prices below their peer

group averages.

Perhaps the most striking

finding concerns

Grand Valley State University

in Grand Rapids.

There, a four-year

graduate pays an average

of $23,000 more for a

diploma than they would

at an average, comparable

out-of-state university.

Grand Valley has

the sixth-highest net cost

and the third-lowest state

support in a group of 161

similar universities.

The bottom line: “Grand

Valley has essentially

been privatized,” says

Matt McLogan, vice

president for university

relations at GVSU. “It’s

publicly owned, but is no

longer publicly supported

in any way that people

would recognize.”

Michigan’s “college user

tax” is a major problem.

For example, the Bridge

study found that a fouryear

in-state graduate

from U of M will spend an

average of $33,860 more

than a “Tar Heel” native

would for a diploma from

the University of North

Carolina.

Bridge concludes that

“Michigan public universities

cost more because

they are subsidized less

by the state than public

universities at other

states.”

And the situation has

been getting worse.

Between 2005-2010,

Michigan chopped around

20 percent from state support

for four-year colleges;

only Rhode Island and

New Mexico cut more.

Last year, Gov. Rick Snyder

and the legislature

whacked another 15 percent

from higher education

for the current fiscal

year. Michigan, which

once was renowned for

public higher education,

is now among the bottom

10 states in per-capita

spending on it.

When I served on the

Board of Regents at U

of M in the 1980s, money

from the state roughly

equaled what the school

took in in tuition and

fees. Back in the 1970s,

the school got three times

as much from the state as

it took in from students.

Today, these figures are

reversed.

Former U of M President

James Duderstadt

told Bridge, “Elected

officials have decided

that Michigan will have

one of the lowest levels of

public support for higher

education in the country.

They decided that college

isn’t a public good, but a

private benefit.”

Well, an education

certainly does benefit

who receives it. A college

graduate earns an average

of $1 million more

than a high school graduate

over a lifetime. And

sharply increased tuition

doesn’t seem to have reduced

demand for university

admissions.

In the past, however,

state policy-makers reasoned

and understood

that an educated populace

was a benefit to the

state, not least because

low-cost access to college

was the single greatest

way for people to move up

the social ladder — the

promise of America.

And now more than

ever, there are economic

benefits, too. The state

“Cherry Commission” on

Higher Education and

Economic Growth found

in 2004 that states with

the highest percentage of

college graduates are the

most prosperous.

The Michigan Economic

Development Corporation

estimates that higher

education is highly cost

effective, generating $26

in revenue for every dollar

invested.

Estimates vary, but

Bridge found that just to

reach the middle of the

pack, Michigan would

have to increase funding

for higher education by 56

percent.

To get to the top 10,

we’d have double today’s

spending. That would

mean either higher taxes

or recasting priorities —

most likely, both.

Based on past state

political practice, that

seems unlikely — though

disgraceful.

Michigan has adopted

a policy of “beggar our

best.” We spend more on

warehousing felons in our

prisons than on educating

our young people in

college.

If we keep it up, we’ll all

pay a terrible price.

As a matter of fact, we

already are.

Phil Power is founder and

president of the nonprofit

Center for Michigan in Ann

Arbor. His email address is

ppower@thecenterformichigan.

net.