Comparing Arkansas and Tennessee in Financing Higher Education - Report Example

Comparing Arkansas and Tennessee in Financing Higher Education Government support for higher education is an important concern. On one hand, a sectorof American society is advocating higher government financing of higher education. At the opposite extreme, however, are advocacies for privatization of education services. Meanwhile, appropriation per fulltime student was $7,961 in 2001 but declined to $6,928 in 2009 as a result of crises in the United States economy (NCSL 2010). Tuition has become 37% of total education revenue as of 2010 from its level of less than 25% in 1984 (NCSL 2010). About two-thirds of states allocate funds for education usually comprising from 10 to 12 percent of the state budget (NCSL 2010). In this work, I compared the Arkansas and Tennessee in their financing of higher education for possible lessons. Formula for state support to higher education. According to ADHE (2010, p. 3), A.C.A “establishes the process and key components for formula development for funding public institutions of higher education” that the State of Arkansas adopted. Based on ADHE (2010, p. 3), the content of the formula is the principle of providing “fair and equitable state support to all postsecondary students across the state, regardless of the state institution attended” while recognizing level requirements, equipment needs, unique missions, growth, economies of scale, and other factors. In contrast, compared to Arkansas’ equity-based formula, the formula adopted by the State of Tennessee for funding higher education is outcome and performance-based. The TSBE (2011, p. 4) pointed this out very clearly when it emphasized a “productivity and efficiency through an outcomes-based funding formula” for higher education. The TSBE (2011 p. 5) reported that the outcomes based funding was approved for implementation since AY 2011-12 while the performance funding standard was approved for implementation since AY 2010-11. Institutional winners. Based on the funding formula discussed earlier, it follows that the institutional winners for Arkansas are the institutions focusing on those with lower incomes while the institutional winners for the Tennessee will be likely those who have demonstrated the best outcomes or those who have performed well on the education criteria. Evaluating Tennessee’s progress on performance or outcome-based for higher education, however, may be too early because Tennessee has just begun their new policy. If outcomes and performance correlate with the income class of the student population, the likely winners in Tennessee will be the institutions catering to students from the rich. Conditions associated with state support for higher education. It follows from our discussion that the condition that should be associated for the state’s continuing support for higher education in Arkansas is that education should be extended especially to those disadvantaged by family income. However, there is no data available in the documents reviewed by this work suggesting that such a condition was imposed on the schools receiving state support in Arkansas. It also follows that the condition that should be associated for the state’s continuing support for higher education in Tennessee is improvement in educational performance. However, similar to Arkansas, there is no data available in the documents reviewed by this work that such a condition was imposed in the schools for higher education in Tennessee. Trend on state support for higher education in the last five years. According to the CSEP (2009c), the ten-year budget change in the appropriation of state tax funds for the operating budget of higher education in Arkansas has been a positive 54.3%; the two-year change was 9.3%; the five-year change was 28.6% although the one year change was a negative 0.4%. Given the two-year change in state spending for higher education at 9.3%, the percentage change for Arkansas State spending for community college spending rose by only 9.0% between 2007 and 2009 (CESP 2009c). Nevertheless, based on CESP (2009c) and taking into account population data, the per capita state spending for education in Arkansas was $300.66 in 2009 (CESP 2009c). In FY 2008-2009, the State of Tennessee appropriated state tax funds for education in the amount of $1.2558 billion (CSEP 2009b). According to the CESP (2009c), the ten-year budget change budget change in the appropriation of sate funds for the operating budget of higher education in Tennessee has been a positive 29.7%; the two year change in budget was as positive 0.1%; the two-year change was a positive 15.4% although the one year change was a negative 6.7%. Although the spending of the State of Tennessee for education changed by only 0.1%, Tennessee State spending for community college education changed by 0.6% between 2007 and 2009 (CESP 2009c). The Arkansas fiscal base for FY 2009-10 was $815.8 million for colleges, universities, non-formula entities, and technical centers, comprising the postsecondary education sector of Arkansas (ADHE, 2010, p. 7). In FY 2008-09, total fulltime postsecondary enrollment was 107,832 (ADHE, 2010, p. 17). On the same fiscal year or FY 2008-09, appropriation of state tax funds for higher education was $858.4 million (CSEP 2009a). The $858.4 million is 4.0% of the $21.3 billion expenditure of the State of Arkansas in 2008. This also indicates that the State of Arkansas spent an average of $7,961 per fulltime student in higher education for FY 2008-09. In contrast, based on the State of Tennessee (2006, p. xxi) forecasted budget of $25.6 billion for 2006 to 2007, the $1.2 billion allocation for higher education expenditure is actually 4.7% of the 2006 to 2007 fiscal year budget. With the population taken into account, the per capita state spending for education was $202.07 in 2009 for the State of Tennessee (CESP 2009c). In 2006-2007, the Association for Career and Technical Education, citing U.S. Department of Education “publicly available sources” placed at 15,331 the total number of enrollment at the postsecondary level (ASTE 2009). The CSEP (2009c) estimate of Tennessee State spending for higher education in 2007 was $1.2 billion, indicating that Tennessee state subsidy per student was astronomically and unbelievably high during the year at more than $81,000 per student at the postsecondary level. In contrast, a joint report for kindergarten and higher education indicates that in 2006-07, only $1,055 were spent by the State of Tennessee for each fulltime college enrollee and the amount was $815 in 2005-06, $621 in 2004-05, and $211 in 2003-04 (TSBE 2009, p. 19). Each figure refers to the average financial aid award per fulltime college enrollee (TSBE 2009, p. 19). Except for the figure for 2003-04, the Tennessee figures are above the national average of financial aid award for each fulltime enrollee although possibly lower than Arkansas: $500 for 2003-04, $562 for 2004-05, $575 for 2005-06, and $613 for 2006-07 (TSBE 2009, p. 19). With regard to state financing of higher education, the NASBO data narrate a different story. According to the NASBO (2012, p. 24): in 2011, Arkansas spent 15.9 of its expenditures for higher education while it was 13.1% for Tennessee. In 2010, Arkansas spent 15.3% of its expenditures for higher education while it was 13.1% for Tennessee (NASBO 2012, p. 24). Finally in 2009, Arkansas spent 16.8% of its expenditures for education while it was 12.8% for Tennessee (NASBO 2012, p. 24). Thus, percentage-wise, what is suggested by the NASBO (2012) data is that state support for education as a percentage of total expenditures, has been actually increasing. Sources of financing for higher education. In 2009-10, in the State of Arkansas, annual tuition and other fees was $4,698 for Arkansas residents and $9,738 for non-residents of Arkansas (ADHE, 2010, p. 21). Given this figure, we can add up the State of Arkansas expenditure of $7,961 per fulltime student in higher education for FY 2008-09 as figures for 2009-10 is not immediately available. In 2006-07, the median tuition fee in the State of Tennessee is $2,285 (THEC 2009, p. 21). In contrast, as discussed earlier, the average financial award for each fulltime enrollee in Tennessee is $613 in 2006-07. Institutional versus direct student support. Based on CSEP (2009a), the State Arkansas allocated its financial support to higher education mainly and almost entirely through the schools. In contrast, the State of Tennessee extends scholarship through lotteries among individual students and supported 1,185 students in 2008-09 at the cost of $2.9 million (THEC 2011, p. 4). In 2009-10, the cost of the scholarship by lottery extended by the State of Tennessee was $4.3 million for an undetermined number of students (THEC 2011, p. 4). Portion of state money going to institutional support. Based on several figures discussed in this report and data presented in Table 3 of CSEP (2009c), what is suggested is that almost 100% of state money goes for the operational expenses of higher education rather than directly to the needing the assistance. Based on data presented by Table 3 of CSEP (2009c), this is supposedly true for both Arkansas and Tennessee. For example, if we count the $4.3 million lottery scholarship in Tennessee that was discussed earlier, this is only a drop in bucket out of the $1.2 billion support for higher education in Tennessee. Oversight agency. According to a cross-state study conducted by the University of Texas (2012), the Arkansas Department of Higher education acts as the oversight agencies for higher education in Arkansas while the Tennessee Higher Education Commission does the same for Tennessee. Faculty pay versus cost of living. Arkansas Senate (2010) reported that in 2009, the average professor’s salary in Arkansas was $60,500. Comparable data for Tennessee professors are not immediately available for a reliable comparison. However, a webpage of ehow.com, citing an association survey, reported that in 2010, male professors of Tennessee earn a mean salary of $73,990 versus the $70,370 earned by female professors. If the ehow.com report is reliable, the information indicates that the average mean wage for professors in Tennessee is higher than Arkansas, considering that the cost of living in Arkansas is slightly higher in Tennessee (MHEC 2010, p. 3). This suggests that populist measures can work against teachers’ welfare but a reliable conclusion cannot be made based on only two sample states. In summary, the key learning point I have learned from the comparison exercise is that state support for education can be implemented in several ways and can have variable results and impact for education. References ADHE (2010). Arkansas public higher education operating recommendations, fiscal year 2010-11. Arkansas: Arkansas Department of Higher Education. Arkansas Senate (2010). State employees will not get pay raises at the beginning of fiscal year. Retrieved January 29, 2012, from http://www.arkansas.gov/senate/newsroom/index.php?do:newsDetail=1&news_id=234 ASTE (2009). Tennessee CTE state profile. Virginia: Association for Career and Technical Education. Retrieved January 29, 2012, from http://www.acteonline.org/profile_tn.aspx CSEP (2009a). State reports for fiscal year 2008-2009: Arkansas. An annual compilation of data on state fiscal support for higher education. University of Illinois: Center for the Study of Education Policy. Retrieved January 29, 2012, from http://grapevine.illinoisstate.edu/statereports/FY09/pdf/AR_09_submission.pdf CSEP (2009b). State reports for fiscal year 2008-2009: Tennessee. An annual compilation of data on state fiscal support for higher education. University of Illinois: Center for the Study of Education Policy. Retrieved January 29, 2012, from http://grapevine.illinoisstate.edu/statereports/FY09/pdf/TN_09_%20revised.pdf CSEP (2009c). National tables. Excel file. University of Illinois: Center for the Study of Education Policy. Retrieved January 29, 2012, from http://grapevine.illinoisstate.edu/.../GPV_FY09_National_Tables.xls EHOW (2011). The average salaries for professors in Tennessee. Retrieved January 29, 2012, from http://www.ehow.com/info_8290013_average-salaries-professors-tennessee.html MHEC (2010) Average faculty salaries. Minneapolis: Midwestern Higher Education Compact (MHEC). NASBO (2012). State expenditure report: Examining fiscal 2009-2011 state spending. Washington: National Association of State Budget Officers. NCSL (2010). State funding for higher education in FY 2009 and FY 2010. Washington: National Conference for State Legislatures. Retrieved January 29, 2012, from http://www.ncsl.org/documents/fiscal/HigherEdFundingFINAL.pdf Siecus (2010) Arkansas state profile. Retrieved January 29, 2012, from http://sunshinereview.org/index.php/Arkansas_state_budget_(2008-2009) State of Tennessee (2006) The budget: Fiscal year 2006-2007. Tennessee: Governors Office. TSBE (2009). Annual joint report on pre-kindergarten through higher education. Tennessee: Tennessee State Board of Education (TSBE). TSBE (2011). Annual joint report on pre-kindergarten through higher education. Tennessee: Tennessee State Board of Education (TSBE). THEC (2009). Creating partnership for a better Tennessee: 2009 Report on the implementation of the 2005-2010 master plan. Tennessee: Tennessee Higher Education Commission (THEC). THEC (2011). Tennessee education lottery scholarship program special report. Tennessee: Tennessee Higher Education Commission (THEC). University of Texas (2012). U.S. community colleges. Austin: University of Texas at Austin. Retrieved January 29, 2012, from http://wwwhost.utexas.edu/world/comcol/state/ Read More