Sunday, May 13, 2012

The Great Risk Shift, updated

The Times' front page story today about the enormous growth in student loan debt loads is long on personal narrative, but also tells a succinct story in numbers:
From 2001 to 2011, state and local financing per student declined by 24 percent nationally. Over the same period, tuition and fees at state schools increased 72 percent, compared with 29 percent for nonprofit private institutions, according to the College Board. Many of the cuts were the result of a sluggish economy that reduced tax revenue, but the sharp drop in per-student spending also reflects a change: an increasing number of lawmakers voted to transfer more of the financial burden of college from taxpayers to students and their families. (Local funding is a small percentage of the total, and mostly goes to community colleges.)

 “To say that tuition goes up because the state doesn’t pay enough money, well, that is the taxpayers’ money,” said Ohio’s governor, John Kasich, a Republican elected in 2010 whose budget included cuts to higher education because of the end of federal stimulus money.

Sound familiar?  That's the GOP response to rising healthcare costs, too: shift ever more of the burden onto individuals.  Kasich, need we note, has signed a no new taxes pledge, as have 24 Ohio legislators. The Great Risk Shift documented by Jacob Hacker all those years ago (2006) continues apace.

It's true that the financing challenges faced by state governments are complex.  In Ohio, universities have lost revenue share over a generation to prisons, but also to Medicaid and primary education. Failure to get medical costs under control (though Medicaid controls such costs more efficiently than the private sector or Medicare) and to find effective means of education reform weigh on state budgets.  There's also doubtless a good deal of truth in Kasich and allies' claims of inefficiency in the state university system:
They suggest, for example, that state schools are bloated, antiquated and don’t do a good enough job graduating students or training them for the work force. Some complain about the salaries of football coaches and college presidents, like Mr. Gee, who has a compensation package of $2 million a year as president of Ohio State. Mr. Kasich questions why all state universities need to offer every major, like journalism or engineering, instead of parceling those programs among the schools. 

“It’s not just inefficiencies,” said the governor, an Ohio State graduate. “It’s, ‘I want to be the best in this.’ It’s duplication of resources. It’s a sweeping change that is needed across academia.”
But it's also true that the U.S. continues to eat its seed corn while the GOP pushes anti-tax orthodoxy to ever more insane heights.  Our collective will, as expressed or distorted by our current political system, starves government at all levels of the resources necessary to maintain an advanced economy.

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