Higher Ed … Or Just Higher Taxes?

September 11, 2008

It’s a simple equation, according to supporters of Connecticut’s government colleges and universities. More higher-education spending = better-skilled workers = a stronger economy.

Employees with a bachelor’s degree or higher earn an hourly wage here that’s nearly double that of high-school graduates, and almost triple that of high-school dropouts. With such a glaring disparity in mind, in the 1990s, Nutmeg State politicians began to shovel greater amounts of money into the coffers of post-secondary education. A college degree today, we were told, is the equivalent of a high-school diploma decades ago -- universal access to higher education was simply a must if the state hoped to be competitive in the global marketplace.

This fiscal year, about $2.7 billion will be spent by UConn and its Health Center, the four branches of the Connecticut State University System (CSUS), community-technical colleges, Charter Oak State College, and the Department of Higher Education. Throw in the hundreds of millions of dollars that cover annual debt on the multitude of capital projects launched by the “UConn 2000,” “21st Century UConn,” and “CSUS 2020” initiatives, and taxpayers are on the hook for a heckuva lot of “public investment” in higher education. The U.S. Department of Education reports that about 20 percent of Connecticut’s system of post-secondary schooling is covered by tuition and fees. (You, Joe Sixpack and Jane Diet Coke, pick up the rest.)

All those subsidies have produced what Connecticut’s politicians, educrats, and “economic development” functionaries consider an unalloyed good: more diplomas. Between 2002 and 2006, degrees conferred by UConn rose by 39 percent. The figure for the CSUS was 21 percent.

If you’re not willing to look any further than the money spent and diplomas awarded, the story ends -- quite happily -- there.

Unfortunately, residents of the state with the highest tax burden in the nation can’t be so myopic. It’s long since time that voices of fiscal responsibility weighed in on whether Connecticut’s higher-ed boom has been worth its substantial cost.

Ample evidence suggests that it has not. The tale of economic woe that is now familiar to so many informed Nutmeggers -- falling household income, tepid wage growth, stagnant job-creation in the private sector, an outrageously high cost of living, a declining population of native-born citizens -- attests to the reality that a highly educated workforce is not sufficient to generate a dynamic, growing economy.

Research by Jon Sanders of the John Locke Foundation indicates that higher education’s cheerleaders may even have the causality backwards. The economist found that a strong case can be made that it’s economic growth that produces hikes in state subsidies to colleges and universities, not the other way around.

Connecticut offers compelling corroboration of Sanders’s hypothesis. The recovery of the mid-1990s enabled the first big borrowing binge for UConn. The tech boom of the late 1990s enabled the second. Connecticut’s most recent recovery offered lawmakers and the governor cover to borrow an additional $1 billion or so for the CSUS.

Despite the unprecedented higher-ed spending undertaken, to a large degree, to keep them here, Connecticut’s young adults continue to make tracks for better economic climes. With everyday expenses -- driven by high taxes and meddlesome government -- so high here, once they have their diplomas, many embark on one-way trips to states where their education secures solid jobs, but the cost of living is substantially lower. (Facing retirement, their Baby Boomer parents might start to follow them.)

No one in state government appears willing to examine the folly of cranking out higher numbers of college grads in an environment that is hostile to working, investing, entrepreneurship, and homeownership. The wisdom of providing massive subsidies to well-educated young adults who don’t stick around to produce an economic benefit for taxpayers is lost on the powerful lobby that seeks to maintain the higher-ed status quo. Faculty and administration want to keep their well-compensated positions. Families and students want to avoid paying a larger share of the system’s cost. And politicians want to keep claiming that the state’s educated workforce compensates for runaway costs of doing business. As usual, taxpayers lack a voice in this non-debate.

Connecticut may be the best example of how a state’s increased higher-ed spending does not guarantee impressive economic growth. As a percentage of the population, it has the most college-educated adults -- and one of the nation’s worst economies.

It’s time for some credible, independent scrutiny of the costs and benefits of the state’s government-run universities and colleges. What analysts find isn’t likely to be pretty.

D. Dowd Muska is a writer, commentator and public-policy researcher. His website is www.dowdmuska.com.

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