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					 The Public Agenda,
   Accountability,
     and Money

Midwestern Higher Education Compact
       Paul Lingenfelter, SHEEO
            November 15, 2005
                                      1
The National Agenda for Higher Education



   In the global economy the question is:


       Can Americans Compete?

                   Geoffrey Colvin, Fortune Magazine, July 20, 2005




                                                                      2
The National Agenda for Higher Education

   Countries approaching, equaling,
   or surpassing U.S. educational attainment:

       Australia         New Zealand
       Canada            Norway
       Czech Republic    Slovak Republic
       Finland           Sweden
       Ireland           Switzerland
       Japan             United Kingdom
       Korea
                             Source: OECD Educational Statistics
                                                                   3
The National Agenda for Higher Education

   College graduates this year:
             Total College Graduates                   Engineering Graduates

                                                                 3.3 Million
  3500000                             3.1 Million

  3000000

  2500000

  2000000
            1.3 Million
  1500000

  1000000                                                                      600,000
                                                       350,000
   500000                    70,000

        0
                      U.S.                     India                      China


                                           Geoffrey Colvin, Fortune Magazine, July 20, 2005
                                                                                              4
High School Education in China
                          2004 Major Data of the Education System

                                                                          No. of                                               Gross rate
                                               No. of                                                No. of
                                                                        teaching                                                   of
                                              schools                                               students
                                                                          staff                                                enrollment

   Higher ed.                                          3,423                 970,506                   18,352,821                     19%


   High school ed.                                   31,493               1,920,894                    36,076,284                     47.6%


   Middle school ed.                                 63,757               3,500,464                    65,762,936                     94.1%


   Primary ed.                                     394,183                5,628,860                  112,462,256                  106.6%


   Pre-schooling ed.                               117,899                   656,083                   20,894,002                     40.8%


  Source: High School Education in China: Challenges and Priorities; Presentation to National Governors Association, July 16, 2005.
  By Yang Jin, Deputy Director-General, Department of Basic Education, Ministry of Education, P.R. China.                                     5
High School Education in China
             The Composition of General and Vocational Education
                 The Composition of General and Vocational Education
                            High School Level (*10,000)
                         at at High School Level (*10,000)
         1400

         1300

         1200

         1100                                                                                                                    548

                                                                                                                    510
         1000

          900                                                                                         455



          800
                                                                                         398
                                                                            412
          700                                                 473
                                   521           520
                      510
          600

          500
                                                                                                                    752
                                                                                                                                 822
          400
                                                                                                      677

                                                                                         558
          300
                                                                            473
                                                              396
          200                                    360
                                    317
                      282
          100

             0
                     1996         1997         1998          1999         2000          2001         2002         2003          2004

                                              General ed.                 Vocational ed.

  Source: High School Education in China: Challenges and Priorities; Presentation to National Governors Association, July 16, 2005.
  By Yang Jin, Deputy Director-General, Department of Basic Education, Ministry of Education, P.R. China.                              6
High School Education in China


                                            Quantitative Target

         Universalizing 15 years of education is
         one of the major targets in 2020:

          3-year preschool education;

          9-year compulsory education; and

          3-year high school level of education.

  Source: High School Education in China: Challenges and Priorities; Presentation to National Governors Association, July 16, 2005.
  By Yang Jin, Deputy Director-General, Department of Basic Education, Ministry of Education, P.R. China.
                                                                                                                                      7
The National Agenda for Higher Education



  Potential U.S. service jobs outsourced:


                 9.6 Million

   increasing our unemployment rate to 11.4%


                McKinsey estimate, Geoffrey Colvin, Fortune Magazine, July 20, 2005


                                                                                      8
The National Agenda for Higher Education


      American (and Western European)
      workers are more expensive.


      What will it take for them to be
      worth what they cost?


      They must be the best educated in
      the world.
                      Geoffrey Colvin, Fortune Magazine, July 20, 2005



                                                                         9
What does America need?



    To double the degree production

           of the 1960s with

       no compromise in quality.




                                      10
2002 High School sophomores plan:


     At least a baccalaureate degree – 80%


     A graduate or professional degree – 40%


     Some postsecondary education – 11%


     No postsecondary education – 9%



                                                11
Education and income
                                                                              Educational Attainment and Personal Income per per Capita,
                                                                       Educational Attainment and Personal IncomeCapita, by State by State
                                                                                                (MHEC States in Red)
                                                           40%
  Adult Population with a Bachelors Degree or Higher (%)




                                                                                                                                                    MA

                                                           35%                                                                       CO                            CT
                                                                                                                                               MD
                                                                                                                                                           NJ
                                                                                                            VT                    VA
                                                                                                                             MN  NH
                                                           30%                                                                NY
                                                                                                                            WA
                                                                                                           KS    HI RI       IL
                                                                                                                           CA
                                                                                           UT        NE        OR               DE
                                                                                 MT
                                                                                                                GAUS
                                                                                      ND                       PA
                                                           25%
                                                                                 NM SD
                                                                                                   METX AZ  WI
                                                                                                      MO
                                                                                                    IA NC     FL MI
                                                                                     ID           WY       OH
                                                                                      OK        SC TN     IN
                                                           20%               LA
                                                                                           KY                         NV
                                                                       MS    AR
                                                                            WV
                                                           15%
                                                             $15,000        $17,000             $19,000     $21,000        $23,000        $25,000        $27,000   $29,000
                                                                                                          Personal Income per Capita
  Source: US Census Bureau 2000, HigherEdInfo.org                                                                                                                            12
Higher Education vs. The State
             The Case Against the State

    The instruction and research of colleges
       and universities:

     Build prosperity

     Enhance the quality of life

     Are essential for a successful democracy




                                                 13
Higher Education vs. The State
            The Case Against the State

         Enrollment demand is unrelenting
                        YET
     State funding is decreasing as a percentage
               of university revenues
                        AND
            Higher education is receiving
             a decreasing percentage of
                state appropriations
                                                   14
Higher Education vs. The State
               The States Respond:

      We have funded enrollment growth
       and inflation

      Tuition and fees increases have greatly
       exceeded inflation

      The people have needs in addition to
       higher education

      Where is all the money going?

                                                 15
Higher Education vs. The State
           Higher Education Responds:

     The CPI doesn’t come close to actual cost
     increases in higher education

     Our market basket includes:
          High priced talent
          Cutting edge technology
          Etc.



                                                 16
Higher Education vs. The State
             Higher Education Responds:
     The money is going for:

        (Barely) competitive faculty salaries

        Student aid and student services

        Health care costs and retirement

        Keeping pace with technological change

        Keeping programs current

        Teaching loads to attract strong faculty

        O&M of aging facilities

                                                    17
Higher Education vs. The State
         The State Responds – What about:
        Incoherent curricula – courses on obscure topics

        Lots of mediocre research

        Wasteful competition for empty prestige

        Wasteful uses of faculty time

        Frills (athletics, amenities) for pampered students
         (Your children and mine!)

        Unjustified reductions in teaching loads

        No motivation to reduce costs in seller’s market
                                                               18
Higher Education vs. The State
          Grand Jury’s Deliberations:


      We need excellent higher
       education, and lots of it.

      We only have so much money.

      Can’t you folks figure this out?


                                          19
Higher Education vs. The State
            Grand Jury’s Verdict:


                Plaintiff

                   and

              Defendant

           – both indicted!
                                    20
What’s the Answer?




     Better accountability!




                              21
The National Commission on
    Accountability in Higher Education

        Commissioners:
              Two Governors
              Three legislators
              Three state higher education executives
              Three institutional leaders
              Two business representatives

        Research and Advisory Group:
              Joseph C. Burke
              Peter T. Ewell
              Margaret A. Miller
              Nancy Shulock
              Jane V. Wellman
                                                         22
What is “better accountability?”

      Not the status quo – Unfocused, unread,
       unused reporting exercises;

      Not measuring performance,
       rewarding performance or
       punishing the lack of performance;

      Not centralized bureaucracies, but


       A WAY TO IMPROVE PERFORMANCE

                                                 23
The National Commission on
    Accountability in Higher Education
                  Fundamental Principles
         Responsibility for performance –
          and accountability – is shared among
              Teachers and learners
              Policy makers and educators

         Effective accountability will be based on:
              Pride, not fear
              Aspirations, not minimum standards

         Effective accountability will be:
              A tool for self-discipline, not
               finger-pointing
                                                       24
The National Commission on
    Accountability in Higher Education

               Pride Not Fear




                                         25
The National Commission on
    Accountability in Higher Education
      Components of Effective Accountability
         Affirm and pursue fundamental goals
              The public agenda vs. market position

         Establish and honor a division of labor
              Top-down centralization is a dead end

         Focus on a few priorities at every level
              No focus, no progress

         Measure results, respond to evidence
              Elementary Balridge
                                                       26
State Responsibilities

        Set clear public goals for higher education
             Participation and success rates
             Research and service productivity

        Stay focused on a policy agenda,
         stay out of institutional operations

        Measure results, including student learning,
         and work collaboratively to achieve goals

        Provide necessary resources



                                                        27
Federal Responsibilities
        Focus on enhancing access to opportunity
             Financial assistance
             GEAR Up and TRIO


        Maintain, enhance research support
         and quality

        Improve data resources
             Create Student Unit Record System to track
              retention, success, net cost data
             Improve, expand NAAL
             Consumer Information


                                                           28
Institutional Responsibilities #1

        Improve teaching and learning
             Establish clear goals for general education and
              each academic program
             Assess learning achievement systematically
             Disclose results and work for improvement


        Assure access to opportunity in tuition and
         financial aid policies




                                                                29
Institutional Responsibilities #2

        Assure research quality and value
             Employ high standards for institutional support
             Recognize different kinds of scholarly work


        Improve productivity in these ways:
             Increase curricular coherence and focus
             Help improve student preparation
             Use technology to reduce cost and
              improve quality
             Streamline, outsource operations
             Reallocate toward priorities


                                                                30
What’s the Answer?




              Money!




                       31
Wrong Ideas about Money

     There is a “right” amount

     The only way to get better results is
      spend more money

     We can get the results we need
      without spending more money




                                              32
Right Questions about Money

      What do we need from higher
       education?

      What can we do better with the
       money we have?

      What do we need that justifies
       additional funds?



                                        33
State Higher Education Finance (SHEF)

     Perspective on:
          Annual, full-time-equivalent enrollment
          State and local support per FTE
          Net tuition and state student aid
          State funding for research, agriculture,
           medicine
          Differences in cost of living and enrollment mix
          Inflation
          Educational spending per FTE
                  (adjusted for cost of living and enrollment mix)

          Taxable wealth and tax effort

                                                                     34
State & local support per student, 1980-2004
                                        U.S. Public Higher Education Enrollments and State & Local Support per FTE, Fiscal 1980-2004
                                                (Constant 2004 dollars adjusted by SHEEO Higher Education Cost Adjustment)
                                  10M                                                                                                                    $7,000
                                                                                                                                       $6,874




                                                                                                                                                                  Educational Appropriations per FTE
                                                                                                         = Recession
                                  9M
   Annual Public FTE Enrollment




                                                                                                                                                         $6,500



                                  8M $6,094


                                                                                                                                                         $6,000


                                  7M

                                                                                                                                                $5,737
                                                     $5,702

                                                                                                                                                         $5,500
                                  6M




                                  5M                                                                                                                     $5,000



                                          Note:   State and local government support, excluding research, agricultural, and medical.
                                          Source: SHEEO SHEF
                                                                                                                                                                  35
Tuition and Fees, 1981-2005
                                            Public Four-Year Tuition and Fees
                                       in Current and Constant Dollars, 1991-2005
    $6,000
                     Current Dollars

                     Constant Dollars                                                                                  $5,126
    $5,000




    $4,000
                                                                                                                       $3,581


    $3,000




    $2,000

             $1,908


    $1,000


                                                                                             Constant dollars adjusted by CPI-U.
                                                                                             Data weighted by FTE.
        $0
              1991      1992     1993    1994   1995      1996   1997   1998   1999   2000   2001   2002    2003    2004     2005
  Source: College Board, Trends in College Pricing 2005                                                                             36
Alternative Inflation Adjustments
                                                  HECA, HEPI, and the CPI
   1.70
                 HECA
                 HEPI                                                                                             + 62%
   1.60          CPI-U (fiscal)



                                                                                                                  + 58%
   1.50


                                                                                                                  + 43%
   1.40




   1.30




   1.20




   1.10




   1.00




   0.90
          1991     1992      1993   1994   1995    1996   1997   1998   1999   2000   2001   2002   2003   2004    2005

  Source: SHEEO SHEF                                                                                                      37
   Rh Ma




                                         0%
                                              10%
                                                    20%
                                                                  30%
                                                                        40%
                                                                              50%
                                                                                    60%
                                                                                          70%
                                                                                                80%
                                                                                                               90%




                          -10%
       od ryla
          e I nd
              sla
                   n




                                 -0.7%
        W Illino d
           yo is
               m
          K i
       Mi an ng
          nn sa
         Mi eso s
            c ta
         Al higa
           ab n
        Ne am
            br a
               a
     Co Al ska
         nn ask
                                                                                                  MHEC State
        Ne ectic a
           w u
   Pe Mi Yor t
  Ma   nn sso k
     ss sylv uri
        ac an
           h
        De use ia
            law tts
   W
      es Oare
         tV h
             i io
         V r gi
 Ne W erm nia
   w isc on
      Ha on t
          mp sin
               sh
             Ma ire
      Te I ine
         nn ow
             es a
            Ha see
          Ge wa
               o ii
           Vi rgia
              rg
          Or inia
               eg
                   on
         C
     Ne olo US
         w rad
            J
                                                          21.8%




         Ke ers o
       O ntu ey
    Ne klah cky
        w om
           M
        Ca exi a
   No l c
       rth ifor o
                                                                                                                               Percent Change by State, Fiscal 1991-2004




           D nia
         Mo ako
  So          nt ta
     uth Ind ana
          Ca i an
              ro a
                 l
                                                                                                                       Full-Time Equivalent Enrollment in Public Higher Education,




             Te ina
           F     xa
                     s
   So A lorid
  No  uth riz a
     rth Da ona
                k
                                                                                                                                                                                     FTE Enrollment Growth, 14 years




     W Car ota
        as ol
           hi n i na
               gto
        Lo Ida n
           u h
        Ar isia o
      Mi n ka na
         ss sa
             iss s
                 ipp
                      i
          Ne Utah
               va
                   da
38
                                                                                                               86.9%
        Ma




                                        -5%
                                              0%
                                                   5%
                                                        10%
                                                                      15%
                                                                            20%
                                                                                  25%
                                                                                                        30%




                         -10%
 So D ryla
   uth ela nd
         C w
     Te aro are




                                -5.5%
        nn lin
            e a
        Mo sse
             n e
  Rh Mic tan
      od h a
   W e Isigan
       as la
          h n
       Ne ingt d
           w o
       Ne Yo n
           b
                                                                                        MHEC State
       Lo ras rk
          uis ka
          V ian
       Ca irgin a
           lif ia
         Mi orni
            ss a
          Ka our
       W ns i
      Ok yom as
  W l a in
     es h g
        t V om
            i        a
        Al rgin
           ab ia
       Ar am
          ka a
               ns
            Illi as
                n
           Ha ois
                wa
                     i
  Pe Ve Iow i
      nn rm a
         sy on
             lva t
                  nia
          O r US
               eg
      W O on
                                                              11.8%




   Ne isco hio
        w ns
           Je in
          Indrsey
      Mi ia
         nn na
              e
          Ar sota
        Co izon
            lor a
   Co I ado
 Ma n da
                                                                                                                      Percent Change by State, Fiscal 2001-2004




Ne ssa nec ho
  w ch ticu
     Ha us t
         m e
     M p tts
  No iss shir
      rth iss e
                                                                                                              Full-Time Equivalent Enrollment in Public Higher Education,




          Da ippi
                k
           Al ota
               as
 No         Ma ka
                                                                                                                                                                            FTE Enrollment Growth, 4 years




    rth           i ne
         Ca Uta
              ro h
           Flo lina
         Ge rid
               o a
   Ne Ne rgia
       w va
          Me da
                x
            T ico
  So Ke exa
     uth ntu s
          Da cky
                ko
                    ta
                                                                                                     27.5%




39
Appropriations per FTE, 14 years
                  Educational Appropriations per FTE, Percent Change by State, Fiscal 1991-2004
                  (Constant 2004 dollars adjusted by SHEEO Higher Education Cost Adjustment)

  30%                                                                                             26.7%
              MHEC State
  20%


  10%


   0%


  -10%
                                                       -11.7%

  -20%


  -30%


  -40%
     -42.2%
  -50%




                                                                                                   40
         Co




                                                                0%
                                                                     10%
                                                                                        20%




                         -40%
                                      -30%
                                             -20%
                                                         -10%
             lor
          Vir ado
                gin
                    i
                Io a




                             -35.4%
 Ma
    ss Flo wa
       ac ri
           h d
      Mi use a
          nn tts
               es
                  o
      Ok O ta
Ne        lah hio
   w Mis oma
     Ha so
         m                                                                 MHEC State
     M p uri
  Pe issi shire
      nn ssi
          sy pp
              lv i
         Ge ania
                or
              Magia
  W Mic ine
 No est V higa
    rth irg n
         C in
      W arol ia
         isc ina
               on
                   sin
        Ke Illino
            ntu is
                  c
              Ida ky
                   ho
  No K US
      rth ans
           Da as
                                                -16.7%

    Co     Indkota
        n ia
    Ne nec na
        w ticu
            Je t
                 rse
                Ut y
          O a
       Ca regoh
            l        n
        M ifo
    W ary rnia
       as l a
          hi n nd
                gt
             T on
        Ala exa
              b s
  Rh A ama
      od las
     Te e Isl ka
        nn an
              es d
          A se
  So   Ne rizo e
     uth w Y na
           D ork
        Ve akot
              r a
                                                                                                                                                                                Appropriations per FTE, 4 years




        Mo mon
       De ntan t
            l
       Ar awa a
           ka re
                                                                                                (Constant 2004 dollars adjusted by SHEEO Higher Education Cost Adjustment)
                                                                                                Educational Appropriations per FTE, Percent Change by State, Fiscal 2001-2004




       Ne ns
            b a
 So Lo ras s
    uth uis ka
         Ca iana
               ro
            H lin
       W aw a
    Ne yo aii
       w min
           Me g
          Ne xico
                va
                   da
41
                                                                                        18.1%
                                    0%
                                         20%
                                                         60%
                                                               80%




                                               40%




                -40%
                             -20%
                                                                            120%
                                                                                                 140%




                                                                     100%
     Louisiana




                    -30.4%
 South Carolina
       Georgia
   Washington
    Mississippi
  North Dakota
New Hampshire
       Arizona
     Arkansas
                                                                                   MHEC State


       Nevada
     Wisconsin
      Vermont
            Utah
  Pennsylvania
            Ohio
         Florida
       Missouri
     Oklahoma
      Colorado
 Massachusetts
       Virginia
              US
                                                 38.6%




  West Virginia
      Michigan
      Kentucky
          Idaho
     Delaware
         Alaska
        Indiana
 North Carolina
            Iowa
   New Jersey
  South Dakota
       Kansas
         Illinois
                                                                                                                                                                                      Net tuition per FTE, 14 years




     Minnesota
  Rhode Island
          Maine
   New Mexico
      Alabama
     Wyoming
     Nebraska
                                                                                                            Net Tuition Revenue per FTE, Percent Change by State, Fiscal 1991-2004




         Texas
    Tennessee
                                                                                                         (Constant 2004 dollars adjusted by SHEEO Higher Education Cost Adjustment)




     New York
   Connecticut
     California
       Oregon
      Maryland
         Hawaii
42




      Montana
                                                                                                132.5%
 Ne
    w
           Ha
              mp




                              -50%
                                              -30%
                                                     -10%
                                                            10%
                                                                          30%
                                                                                50%
                                                                                      70%
                                                                                                         90%
              G shir
           W eorg e
              yo ia
                    mi
                        n




                                     -34.9%
     So KeFlori g
       uth nt da
             Ca uck
                  rol y
                 Te ina
            Ve xa
                  rm s
      Pe               o
     Ma nns Ida nt
       ss ylv ho                                                                            MHEC State
          ac an
               hu ia
                    s
              Ar etts
                   izo
               Ala na
               H sk
           De aw a
                law aii
       Ne v   Ne are
            w ad
           Lo Jers a
               uis ey
                     ian
                          a
      So Wisc Ohi
        uth on o
               Da sin
                     k
                 Maota
                       ine
      No Ala US
         r        b
      W th D ama
                                                                  10.9%




        es ak
            t          o
        Mi Virg ta
       W is ass ini
          as sip
              hi p
           Co ngto i
          Ne lora n
               w do
                    Y
       Co Ka ork
      Rh nne a      ns
     No ode ctic s
       rth Is ut
             Ca lan
           Ar rolind
               ka a
                    n
                                                                                                                                                                                                Net tuition per FTE, 4 years




              Ind sas
            Mo ian
                  nta a
                        n
                    Iowa
          Ne Ut a
               b ah
           Mi rask
                ch a
        Te e  Or igan
                                                                                                                      Net Tuition Revenue per FTE, Percent Change by State, Fiscal 2001-2004




            nn go
                 es n
                      s
                                                                                                                   (Constant 2004 dollars adjusted by SHEEO Higher Education Cost Adjustment)




                 Illi ee
           Ma n o
         Ok ryla is
              lah nd
                    o
       Ne Vir ma
           w gin
               M ia
             Mi exic
         Mi sso o
              nn u
           Ca eso ri
                lifo ta
                      rni
                          a
43
                                                                                                           89.2%
Ne
  w     V




                          0%
                               10%
                                             20%
                                                   30%
                                                                 40%
                                                                       50%
                                                                             60%
                                                                                   70%
                                                                                                      80%
     Ha erm
          m on
        Copshi t
             l o re


                                                                                                            78.7%
  Pe Del rad
      nn aw o
          sy ar
        Ma lvan e
             r ia
  Rh O ylan
                      d
  So ode rego
     uth Isl n
           D an
        Mi ako d
            c ta
        Mo higa
               nta n
                    n
                O a
           Ind hio
        Al ian
            ab a
                 am
                Iowa
           Vi
               rg a
     Te M inia
  W nn ain
     es es e
        tV s
      Mi irgi ee
  No nn ni
      rt es a
    Coh Da ota
        nn ko
       Ne ecticta
            br u
         Mi ask t
      W sso a
         is
 Ma New con uri
    ss Je sin
       ac rs
           hu ey
                s
     Mi n Ka etts
                                                                                                                                                             Fiscal 2004




        ss sa
             iss s
                   ipp
       Ar U i
           k
       Ne ans S
            w as
                Y
                                                         35.7%




 So          Te ork
                   xa
    uth               s
         Ca Uta
               ro h
          A li
      Ok rizona
          la n
        Ke hom a
       Lo ntuc a
           uis ky
                 i
            Floana
 No
    rth Ill rida
                i
    W Car nois
       as ol
          hin ina
                g
            Al ton
          Ne ka as
                va
                                                                                                                                                                                                                  Net tuition as % of Educational Revenues




                    d
       Ca Ida a
            lifo    ho
                                                                                                                    Net Tuition as a Percentage of Public Higher Education Total Educational Revenues by State,




            Harnia
          G wa
                                                                                         MHEC State




       W eorg ii
   Ne yo ia
       w mi n
           Me g
                  xic
                      o
44
                                     12.7%
Growth in net tuition, 14 years
                Net Tuition as a Percentage of Public Higher Education Total Educational Revenues, U.S.,
                                                  Fiscal 1991-2004

  40%

                                                                                                            35.7%
  35%                                                                                               33.0%
                         30.8% 31.3%   31.2% 31.7%    31.2%   30.6% 30.1%                   30.3%
                 28.8%                                                      29.4%   29.4%
  30%

        26.1%
  25%



  20%



  15%



  10%



   5%



   0%
        1991     1992    1993   1994   1995    1996   1997    1998   1999   2000    2001    2002    2003    2004
                                                                                                                   45
Educational revenues per FTE, 14 years
                       Total Educational Revenues per FTE by Component, U.S., Fiscal 1991-2004
                     (Constant 2004 dollars adjusted by SHEEO Higher Education Cost Adjustment)

                                                                                                 $9,743
  $10,000
                            Net Tuition
            $8,799          Educational Appropriations                                                                    $8,924
   $9,000

                                                                                 2,939   2,849   2,869
   $8,000                                                                2,935                            2,882
                                                                 2,922
            2,300                                2,800   2,899                                                    2,993
                     2,480     2,639    2,727                                                                             3,187
   $7,000


   $6,000


   $5,000


   $4,000

                                                                         6,648   6,815   6,854   6,874    6,639
            6,499                                        6,258   6,451
   $3,000            6,126     5,917    5,985    6,185                                                            6,076
                                                                                                                          5,737


   $2,000


   $1,000


    $-
            1991     1992       1993     1994     1995   1996    1997    1998    1999    2000     2001    2002    2003    2004 46
Enrollment and appropriations change
                                                                         Percent Change by State in Enrollment and in Educational Appropriations per FTE,
                                                                                                         Fiscal 1991-2004
                                                                                                      (MHEC States in Red)
                                                         90%
                                                                                                                                                                    NV

                                                         80%
                                                               APPROPS CHANGE: below avg                                                                                APPROPS CHANGE: above avg
  Percent Change in Public Higher Education Enrollment




                                                               FTE CHANGE: above avg                                                                                        FTE CHANGE: above avg

                                                         70%
                                                                                                                                                                    Notes:
                                                                                                     UT
                                                                                                                                                                    1) Dollars adjusted for inflation,
                                                                                                                                                                    public system enrollment mix, and
                                                         60%                                                                                                        state cost of living.
                                                                                                                                                                    2) Funding and FTE data are for
                                                                                                                           MS                                       public non-medical students only.
                                                         50%                                                                                  AR
                                                                                                                                                             LA
                                                                                        WA                ID
                                                         40%                                                         NC     SD
                                                                                                                                         AZ
                                                                                                               FL
                                                                                                                                       TX
                                                         30%                                      SC
                                                                                                    ND
                                                                                        MT        OK IN                           CA           NM                  KY
                                                                                   CO   OR                                 US          NJ
                                                         20%                                          VA                                                                 GA
                                                                                                                HI WI TN
                                                                    VT                       IA      ME
                                                                                                                OH NH
                                                                                                               PA
                                                                                                                                               WV
                                                                                                                                              MA DE
                                                         10%   APPROPS CHANGE: below avg                          AK NY          CT                     MO              APPROPS CHANGE: above avg
                                                               FTE CHANGE: below avg
                                                                                                               MN                  MINE AL         KS
                                                                                                                                                                            FTE CHANGE: below avg

                                                                                                                                                        IL                                     WY
                                                          0%                                                               MD                                RI


                                                         -10%
                                                             -45%    -40%   -35%    -30%      -25%    -20%          -15%    -10%       -5%    0%        5%   10%        15%     20%        25%           30%
                                                                                                  Percent Change in Educational Appropriations per FTE
                                                                                                                                                                                                          47
Appropriations and tuition change
                                                            Percent Change by State in Educational Appropriations and Net Tuition Revenue per FTE,
                                                                                              Fiscal 1991 - 2004
                                                                                            (MHEC States in Red)
                                                 140%
                                                                                                                                                                    APPROPS % CHANGE: above avg
                                                 130%                             MT                                                                                 NET TUIT % CHANGE: above avg
                                                        APPROPS % CHANGE: below avg                      HI
                                                                                                                                                                 Notes:
                                                 120%   NET TUIT % CHANGE: above avg
                                                                                                                                                                 1) Dollars are adjusted for inflation,
                                                                                                                        MD                                       public system enrollment mix, and
                                                 110%                             OR
                                                                                                                                                                 state cost of living.
 Percent Change in Net Tuition Revenue per FTE




                                                                                                                                                                 2) Funding and FTE data are for public
                                                 100%                                                                                                            non-medical students only.

                                                 90%                                                                           CA
                                                                                                                             CT
                                                                                                                   NY
                                                 80%
                                                                                                                TN
                                                                                                                                 TX
                                                                                                                                NE                                                              WY
                                                 70%                                                                                     AL   NM
                                                                                               ME        MN                                                 RI
                                                 60%                                                                                             KS    IL

                                                 50%                                                                    SD          NJ
                                                                                       IA           IN    AK NC                                   DE
                                                 40%                                           ID                              MI                WV               KY
                                                                                              VA
                                                                                                                     US
                                                                                                                                              MA
                                                 30%                         CO             OK    FL                                                  MO
                                                                                                         OH
                                                 20%                                           UT    PA
                                                            VT                                                WI                                                    NV
                                                 10%                                                                                     AZ AR

                                                  0%                                           ND              NH
                                                                                                                     MS
                                                                                  WA
                                                 -10%

                                                 -20% APPROPS % CHANGE: below avg                                                                                        GA
                                                                                                                                                                     APPROPS % CHANGE: above avg
                                                        NET TUIT % CHANGE: below avg        SC                                                                        NET TUIT % CHANGE: below avg
                                                 -30%
                                                     -45%    -40%     -35%    -30%      -25%     -20%         -15%      -10%        -5%       0%       5%   10%        15%       20%        25%       30%
                                                                                            Percent Change in Educational Appropriations per FTE                                                       48
2004 tuition and state student aid
                                                           Net Tuition Revenue per FTE and State-Funded Tuition Aid per FTE by State,
                                                                                          Fiscal 2004
                                                                                     (MHEC States in Red)
                                    $1,300                 GA
                                               TUITION AID: above avg                                                                                           TUITION AID: above avg
                                    $1,200     NET TUITION: below avg                                                                                           NET TUITION: above avg

                                                                                                                                                     Notes:
                                    $1,100                                                                                                           1) Dollars are adjusted for inflation,
                                                                                                                                                     public system enrollment mix, and
                                    $1,000                                                                                                           state cost of living.
                                                                                                                                                     2) Funding and FTE data are for
                                                                                                                                                     public non-medical students only.
  Fiscal 2004 Tuition Aid per FTE




                                     $900
                                                                                 KY
                                                                                            NY
                                     $800

                                     $700

                                                                                                               NJ
                                     $600                             LA
                                                           WA                                 WV
                                                            FL
                                     $500                                  IL                                                              PA
                                                                      WY                                        CO
                                     $400     NM                                            MA                      IN
                                                                           NC                      MN OH                             MD
                                     $300                                  OK         US         VA                                                                         DE
                                              TUITION AID: below avg                                                                 MI                          TUITION AID: below avg
                                              NET TUITION: below avg        MS                                            ME                                     NET TUITION: above avg
                                     $200
                                                                                                           TN
                                                         CA ID                                   MO                            AL
                                     $100
                                                                          UT     KS
                                                                              AZNDTX                                IA
                                      $-            AK           HI    NV   SC    NE WI
                                                                                     AR                    NH
                                                                                                          MT             SDCT OR      RI                                                      VT
                                           $1,000                $2,000          $3,000               $4,000                $5,000          $6,000                 $7,000                     $8,000
                                                                                          Fiscal 2004 Net Tuition Revenue per FTE                                                               49
Net tuition per FTE: position and change
                                                                                       Net Tuition Revenue per FTE, by State:
                                                                           Percent Change and Current Standing Relative to the U.S. Average
                                                                                                (MHEC States in Red)
                                   140%
                                                                                                                                                                                         % CHANGE: above avg
                                   130%                              HI                                                 MT                                                                CURRENT: above avg

                                   120%     % CHANGE: above avg                                                                                                          Notes:
                                            CURRENT: below avg                                                                                          MD               1) Dollars are adjusted for inflation,
                                   110%                                                                                                     OR                           public system enrollment mix, and state
                                                                                                                                                                         cost of living.
                                   100%                                                                                                                                  2) Funding and FTE data are for public
                                                                                                                                                                         non-medical students only.
                                   90%                    CA                                                                          CT
  Percent Change, FY 1991 - 2004




                                                                                                            NY
                                   80%
                                                                                                                          TN
                                                                           WY                        TXNE
                                   70%          NM
                                                                                                                  MN                  ME AL             RI
                                   60%
                                                                                IL                   KS
                                   50%                                                                                    NJ         SD
                                                     AK                         NC                                             IAIN
                                                                ID                              KY                                                 MI                                            DE
                                   40%                                                               US      WV
                                                                                                            MA VA
                                   30%                           FL             OK                                MO          CO

                                   20%
                                                                                                                        OH
                                                                                     UT                                                                      PA                                                VT
                                                                            NV                         WI
                                                                                                      AR
                                   10%                                                     AZ
                                            % CHANGE: below avg                                                                                                                           % CHANGE: below avg
                                    0%      CURRENT: below avg                                   ND                           NH                                                           CURRENT: above avg
                                                                                  MS
                                                                WA
                                   -10%
                                   -20%                     GA
                                                                                          SC
                                   -30%                                    LA
                                   -40%
                                          0.3    0.4      0.5        0.6    0.7      0.8       0.9   1.0    1.1   1.2   1.3    1.4    1.5   1.6   1.7        1.8   1.9     2.0     2.1     2.2   2.3     2.4       2.5
                                                                                                           Indexed to the U.S. Average in FY 2004                                                                  50
State wealth and tax effort
                                                             Taxable Resources and Effective Tax Rate Indexed to the U.S. Average, by State, 2002
                                                                                           (MHEC States in Red)

                                            1.4
                                                    STATE WEALTH: below avg                                                                                 STATE WEALTH: above avg
                                                    EFFECTIVE TAX RATE: above avg                                                                      EFFECTIVE TAX RATE: above avg

                                            1.3                                     ME                                   NY                           Notes:
                                                                                                                                                      Shaded states were within +/- 10%
                                                                                                                                                      of the national average actual tax
                                                                                                                                                      revenues (ATR) per capita. States
                                                                                                                                                      above and to the right exceeded the
                                            1.2
  Effective Tax Rate Index (US Avg = 1.0)




                                                                                                                                                      national average ATR per capita by
                                                                                                                                                      10% or more. States below and to
                                                                                                                                                      the left lagged the average ATR per
                                                                                                HI                                                    capita by 10% or more.
                                                                                    MI     VT       WI
                                            1.1                    WV LA
                                                                                               OH              MN
                                                           MS        OK NM                                 RI CA
                                                                   AR
                                            1.0                                KY               NEUS                      MD                    CT
                                                                   MT           UT ND            PA                        WY
                                                                             ID    AZ         KS
                                                                                             IA      WAIL                                  NJ
                                                                                            IN                                       MA
                                                                                          FL GA
                                                                               SC          MO TX
                                            0.9                                          OR              CO
                                                                        AL                          NC       NV
                                                                                                                         VA     AK
                                                                                               SD
                                            0.8                                      TN                              NH



                                            0.7
                                                                                                                                                                               DE
                                                    STATE WEALTH: below avg                                                                                 STATE WEALTH: above avg
                                                    EFFECTIVE TAX RATE: below avg                                                                       EFFECTIVE TAX RATE: below avg
                                            0.6
                                                  0.6        0.7         0.8             0.9         1.0           1.1        1.2         1.3   1.4           1.5           1.6             1.7
                                                                                                Total Taxable Resources Index (US Avg = 1.0)
                                                                                                                                                                                                  51
Cost of living and enrollment mix
                                                          State Cost of Living and Relative Cost of Each State's Public Higher Education System
                                                                                  Indexed to the National Average, 2004
                                                                                           (MHEC States in Red)
                                        1.20
                                                  STATE COST OF LIVING: below avg                                                                             COST OF LIVING: above avg
                                                  PUBLIC H.E. SYSTEM ENROLLMENT MIX: above avg                                            PUBLIC H.E. SYSTEM ENROLLMENT MIX: above avg


                                                                                                       DE              VT
                                        1.15
  Enrollment Mix Index (US Avg = 1.0)




                                                                                                                                             NH
                                        1.10                                                                 IN

                                                                                                              OH
                                                                                                      IA                             RI
                                                                    NM                UT
                                                                                                        KS             MI
                                        1.05                          WY                         VA                                                                       HI
                                                                                                              PA
                                                                    ID                                          CO
                                                                   KY    AZ        GA
                                                          MS     LA                                      NE
                                                             OK MT     TN
                                                                                                 OR                    WI
                                                                      SC FL                                   ME
                                                            WV                                                 MD
                                                                                                 NV                                                                   CT
                                        1.00                    TX                                    US
                                                                                                 ND                                                                       AK
                                                                                                                                   ILMN                                   MA
                                                              AR                 NC
                                                                                                      SDMO
                                                                                                         WA
                                                                                                                                                              NJ
                                        0.95
                                                                                                                                           NY
                                                                   AL
                                                 STATE COST OF LIVING: below avg
                                                                                                                  CA                                          COST OF LIVING: above avg
                                                 PUBLIC H.E. SYSTEM ENROLLMENT MIX: below avg                                             PUBLIC H.E. SYSTEM ENROLLMENT MIX: below avg
                                        0.90
                                               0.85             0.90              0.95                1.00                  1.05                1.10               1.15              1.20
                                                                                           State Cost of Living Index (US Avg = 1.0)
                                                                                                                                                                                            52
Total revenues per FTE: position and change
                                                                           Total Educational Revenues per FTE by State:
                                                                   Percent Change and Current Standing Relative to U.S. Average
                                                                                      (MHEC States in Red)
                                    40%
                                             % CHANGE: above avg                                                                                             % CHANGE: above avg
                                             CURRENT: below avg                                                                                               CURRENT: above avg

                                                                                                                                  RI                                          WY
                                    30%
                                                                                                                             MD

                                                                                                                                                        DE
                                    20%                                                                    KY           AL
   Percent Change, FY 1991 - 2004




                                                                                          KS
                                                                                       WV
                                                                                           IL
                                                                                        NE                   NV                                       CT
                                                                                                  TX SD TN MO                  MI
                                    10%                                                                  MA
                                                                                        MT                                             NJ
                                                                                                          OR GA
                                                                                                 NM         NY
                                                                                                  MN AR                 ME
                                                                                  CA                IN
                                     0%                                                       AZ
                                                                                                US
                                                                                      VAOH                                   PA
                                                                                                         IA NC     VT
                                                                      CO                                     HI
                                                                   NH   LA                        WI
                                                   AK
                                                              FL MS                                                                          Notes:
                                    -10%                                                                                                     1) Figures are adjusted for inflation,
                                                                          UTOK    ID
                                                                                                                                             public system enrollment mix, and state
                                                                          ND                                                                 cost of living.
                                                                                                                                             2) Funding and FTE data are for public
                                                                                                                                             non-medical students only.
                                    -20%
                                                                          WA     SC
                                             % CHANGE: below avg                                                                                             % CHANGE: below avg
                                             CURRENT: below avg                                                                                               CURRENT: above avg

                                    -30%
                                           0.6          0.7         0.8          0.9             1.0         1.1         1.2           1.3            1.4             1.5              1.6
                                                                                            Indexed to the U.S. Average in FY 2004
                                                                                                                                                                                             53
Right questions about Money

      What do we need from higher
       education?

      What can we do better with the
       money we have?

      What do we need that justifies
       additional funds?



                                        54
What’s the Answer?

      Better accountability

      Money

      Rethink assumptions

      Fix working relationships



                                   55
Contact Info:

 Paul E. Lingenfelter
      President
       SHEEO


       Email:
  Paul@sheeo.org


                        56

				
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