States and Education

As Paul E. Peterson states, studying higher education as an organization is challenging because the locus of control has changed. Higher education institutions have for most of their histories been governed by a sense of internal control with authority largely falling to the faculty and administration of the single institution. These institutions represent professional bureaucracies in which faculty seek control of their work and also solicit a voice in the decisions affecting their lives. In comparison to the more common machine bureaucracy form of business and industry, these professional networks are based upon mutual respect and dedication to the community. This rare form of organizational structure and control causes particular stress to elected officials accustomed to looking to profits for measures of success.

History of Local Control

Defining autonomy as "the power to govern without outside controls" and accountability as "the requirement to demonstrate responsible actions," Robert Berdahl posits that each side should realize that a balance is ideal (p. 38). Paula Sabloff characterizes the struggle between autonomy and accountability as inevitable and as a future force in higher education concerns. She argues that the relationship between state government and the institutions has always been involved in a debate between autonomy versus accountability. Throughout the last half of the twentieth century, regulations increased that inevitably stripped away institutional rights to govern themselves. Legislative members have increased their staff numbers and devoted themselves to much more of a year-round schedule of activities. The establishment of legislative standing committees has combined with governing and coordinating boards to create a constant regulatory environment for the individual campuses. Though higher education may not get caught up in partisan politics to the extent that other areas of government have, it is constantly part of a political process.

Higher Education and the Economy

In the 1980s economic development strategies shifted from the issues of labor, land, and taxes to a focus on investments in human resources and research. Economic and social viability is increasingly linked to "what you know" as much as they are to "what you do." In a 1998 report released by the American Association of State Colleges and Universities, the national job market was predicted to grow by 18.6 million positions between 1996 and 2006. Service industries were predicted to outpace the growth of goods-producing industries as a more knowledge-based economy replaces a skill dependent system. For the early twenty-first century, the report forecasts that jobs in professional specialties, such as business and health care, will supplant manufacturing and production in driving economic growth. Because of this new focus on human capital, public and private spending on education and training must be viewed as investments rather than consumptive costs, and a premium must be placed on lifelong learning.

Social scientists, such as Manuel Justiz in 1994, have pointed out that the radical demographic shifts being faced in America are prompting change more dramatically than government policy has ever done. The importance of access to and diversity of participation in higher education is acknowledged because of the rapid developments in technology and changing workforce needs. In a report developed by the Institute for Higher Education Policy, the public and private benefits of going to college were distilled into four categories: (1) individual economic benefits; (2) public economic benefits; (3) individual social benefits; and (4) public social benefits.

State legislatures are much more specialized and informed at the beginning of the twenty-first century than they have been in the past and they continue to increase their involvement in higher education planning. Because of the myriad of benefits to be gained through a high quality higher education system, the stakes have been raised regarding cooperation between business interests, state government, and campus expertise. The public and private benefits associated with an increase in educational participation and attainment support the argument that a greater emphasis must be placed on an educated citizenry. As the global economy has put a premium on knowledge capital rather than manufacturing skills, employers and government officials are demanding a higher education of the work force than ever before.

Shift in Control

The postwar baby boom and explosion of higher education the 1960s led to the increased desire of state leaders to acquire more control of higher education matters. During that time of growth, states created many of the coordinating and governing boards that exist in the early twenty-first century. Although originally created to bring order and accountability to higher education, in some instances the boards have been allowed by the states to "become the centerpiece of top-level patronage politics and public score settling" (Graham, p. 93). Modeled primarily after the boards of trustees that have traditionally led private institutions, governing and coordinating boards have become permanent fixtures on the higher education map. Approximately 65 percent of students attend postsecondary schools that are a part of a multicampus system. As of 2000, state higher education structures basically fell into three categories: consolidated governing board systems, coordinating board systems, and planning agency systems. Under consolidated governing board systems, governance is centralized in one or two governing boards. Twenty-four states operate under this model. Coordinating board systems are also found in twenty-four states and provide for a liaison board between state government and the governing boards of individual institutions. Planning agency structures are only found in Delaware and Michigan. These agencies coordinate communication and planning with little direct authority over the institutions or their governing boards.

According to Peterson, around the mid-1970s institutions became much more aware of the growing external forces that were less controlled and much less understood by the general campus community. It was at this time that governing boards and publicly elected officials began exercising greater authority in the name of accountability. In the 1980s governors and legislators began seeking even more control over institutions through quality initiatives. Governors and legislators began expecting these higher education boards to exercise firm control of the institutions rather than working as advocates for them. As a result of giving new responsibilities and authority to the governing and coordinating boards, more opportunities for friction with the campus were created. Until this shift, faculty had a much more successful role in academic governance because local leadership largely shaped the control and mission of campuses. In order for shared governance to exist on a campus, it must be based on some level of commitment to coordination between faculty desires, campus interests and state-level concerns.

Higher education is one of many sectors of state government vying for increased funding during a time when more is expected of many areas of government. As far back as the early 1970s, higher education was predicted to fall in line with other divisions of state government in having to fight for their piece of dwindling state resources. Governing and coordinating boards grew out of state government's desire for a rational system of postsecondary education delivery. Set up to deal with the interests of the day, those interests have shifted over time, and the struggle between centralization and decentralization has grown.

Increases in demand for public services fueled the growth in state expenditures in the last quarter of the twentieth century. Charles Bonser, Eugene McGregor, and Clinton Oster stated in 1996 that some of the reasons for the increase in demands on state coffers are demographic changes, growing populations, income growth, income redistribution, and risk aversion. Michael Mills pointed to rapid pace of change faced by higher education in such areas as information technology, restricted funding, expansions in the economy, and multiple stakeholders as the driving forces behind challenges facing higher education and other public sectors.

State Finance

State governments currently fund higher education through combinations of three principal budget tools–incremental funding, formula funding, and performance funding. Incremental funding assumes that services in one year will continue to the next year and as a result a previous year's budget will be used for the following year. Currently, forty of the fifty states and the District of Columbia use incremental funding as their primary method of funding. Formula funding uses quantitative factors to determine the needs of each institution. Currently ten states use formula funding as their principle model. Incidentally, sixteen of the forty states using incremental models rely upon some version of formula funding to inform their budget decisions. Performance funding relies upon incentives to tie accountability and performance to state allocations.

During the 1980s and 1990s there was a shift nationwide in the sources of support for higher education. According to the National Center for Education Statistics, the public higher education revenue attributed to state government funds increased by 125 percent from 1980 to 1996. During this time period tuition and fees increased by 318 percent. Increasing at three times the rate of state appropriations, tuition and fees have become the primary mechanism for meeting higher education's need for improvement dollars. Between 1980 and 1996, institutions looked to private sources and endowment returns for budget balancing mechanisms. Revenue attributed to private sources increased 363 percent from 1980 to 1996, and endowment income increased by 236 percent.

The Illinois State University's Grapevine Database of state higher educational funding data stated that higher education was given nearly $61 billion by state governments in fiscal year 2000 through 2001. The state with the largest appropriation was California at just over $9 billion; the lowest was Vermont at just under $68 million. Of course adjustments must be made for population in comparing the effort of each state toward higher education expenses. On a per capita basis, Mississippi ranked first in appropriations of tax funds to higher education ($313 per capita) and New Hampshire ranked fiftieth ($81 per capita).

As mentioned earlier, states increasingly relied upon tuition and fees to provide necessary improvement dollars to universities and colleges in the 1990s. Nationally, states increased resident under-graduate tuition and required fees by 19 percent between the years of 1997 and 2001 alone, according to the Washington State Higher Education Board. States vary in terms of total required fees per resident participating in higher education. For flagship universities, New Hampshire charged the highest of any state in 2000 ($7,395) and Nevada charged the lowest ($2,220). For comprehensive colleges and universities, New Jersey led the nation ($5,328) and California charged the least ($1,859). Community colleges also vary in terms of fees as New Hampshire charged almost double that of any other state ($4,114) while California charged the least ($330).

The large increases in tuition and fees during the 1990s have been tempered with sizable commitments to state-level grant and aid programs. Annual need-and merit-based aid increased from a national average of $45 million in 1992 though 1993 to $67 million in 1998 through 1999, according to the National Association of State Student Grant and Aid Programs. Nationally, aid dollars per resident aged 18 to 24 stood at $118 and aid per undergraduate full-time equivalency (FTE) stood at $397.

Governance Issues

As noted earlier, higher education governance has undergone a dynamic shift in its locus of control since the mid-twentieth century. Once governed locally by faculty and ceremonially by governing boards, many campuses now find themselves subject to heightened scrutiny at the state-level and in many cases under direct control by state government bodies. Governing and coordinating boards are now found in all fifty states, as governments have found it necessary to establish professional bodies to direct and shape the growing systems of higher education. The relationships between these boards and the institutions have been further strained by the increasing involvement of elected officials in daily activities of the campuses. Elected officials have looked to the boards as a vehicle for delegated powers with intervention always an option if lawmakers deem it necessary. The pressure has then fallen to the campuses as presidents feel torn between the business perspective of board members and the established faculty culture, and the educational planning process is continually influenced by partisan politics.

An Association of Governing Boards study revealed in 1999 that most political leaders wanted strong and effective boards, but felt that intervention was needed. Most governing board members take their responsibilities seriously, but too many political obstacles stand in their way. Among legislative leaders there is strong support for governance by lay board members, but concerns abound for the current performance of these groups. Key findings noted by the Association of Governing Boards were placed into three categories: serving public interest, negotiation of the political environment, and increasing board responsiveness. In another study of governance developments, Frank Bowen and colleagues found that state boards that are both part of higher education and part of state government are more successful at balancing public interests and institutional concerns than solely institutional governing boards.

Aims McGuinness spoke further in 1997 of this critical role between postsecondary structures and overall governmental and economic system demands. He cited instability of state leadership, ambiguous missions, and growing political controls as the factors hindering optimum effectiveness. With massive turnover in federal and state government elections in 1994, the instability of leadership in state government had a great impact on the turnover of commission members and trustees in the late 1990s. Sabloff also discussed the political transformation that state governments have gone through since the 1980s. She pointed to year-round activities, increased staff, career politicians, increasing education levels of officials, and standing committees as evidence of a changing system of governance over all state programs and services. State government is experiencing what has been called at the federal level a professionalization of the legislative body. Higher education officials and scholars have been forced to adjust to the increasing activities and involvement. As noted in Lawrence Marcus's 1997 study of higher education governance restructuring, when relationships between government and higher education systems become more strained, the likelihood of government becoming more involved increases.

A proliferation of state-level advisory commissions established to study the issue of higher education governance and policy reform has occurred in the last decade. Since 1990 an estimated twenty-one states have established state-level governmental advisory groups with similar charges of improving higher education. Whether as a sensible policy development tool or as the latest fad in government, these commissions–drawn primarily from elected leaders, top higher education officials, and politically-connected citizens–shaped much of the public policy debate surrounding higher education in the 1990s.

Though executive advisory councils or "blue-ribbon commissions" are nothing new to state higher education policymaking, the 1990s saw an unusually high number of such bodies. In his descriptive study of the activities of twenty-one states, Mills defines these higher education policy entities as "specially constituted groups with a majority of its members from outside the higher education system and a broad charge allowing them to take a comprehensive look at the structure and operation of all public higher education in the state" (p. 3). Though these entities are not the only planning mechanisms in higher education, they do "claim an atmosphere where independent citizens can work along with higher education and government representatives to deal with problems and policy issues"(p. 3).

Mills found concerns about higher education's role in the state economy and desires for more accountability to be the dominant problems addressed in the reports of twenty-one states' executive advisory commissions. It is no surprise to find that the concerns revolve around structural and economic recommendations, since competitiveness, efficiency, and specialization are dominant themes of the corporate and rational models of planning used by most elected officials and business leaders. In nearly every report Mills found recommendations concerning overhaul or strengthening of coordination and governance of higher education systems.

McGuinness charged that the most perplexing issue facing lawmakers is how to position the higher education system to take on the changes brought by a more market-driven economy. Wrestling with concerns for issues such as mission clarity, technology infrastructure, and increasing political control is becoming commonplace in state-level higher education planning across the country. In their seminal piece on the campus and state policy environment, Malcolm Moos and Francis Rourke stated in 1959 that properly positioning the public higher education system within the overall system of government has always been a problem. Roger Benjamin and Stephen Carroll conducted a survey in 1996 that found that governance structures commonly were not able to tie resource allocation to the mission. Instead of being able to focus scarce resources to areas of weakness or strengths, funding was spread uniformly to all disciplines, programs, and institutions within a system.

In the last quarter of the twentieth century, nearly every state reevaluated its higher education system in terms of quality, accountability, and efficiency. Conflicting desires surface as elected officials expect governing boards to meet public interests and set direction for higher education while the institutions desire the governing boards to be advocates for funding and keep the politics at a minimum.