Higher Education: Public Good, Private Investment, or Synergism for Both!

The Flinn-Brown Civic Leadership Academy March 26, 2011 Arizona Center for Civic Leadership Presentation by: David Longanecker President, Western Interstate Commission for Higher Education (WICHE)

The Arizona Story A Perfect Situation

Higher Education: Public Good, Private Investment, or Synergism for Both!

The Flinn-Brown Civic Leadership Academy March 26, 2011 Arizona Center for Civic Leadership Presentation by: David Longanecker President, Western Interstate Commission for Higher Education (WICHE)

The Arizona Story A Perfect Situation Perfect Storm or Perfect Opportunity

The Perfect Storm: Three Converging Waves

Wave One: Arizona’s Economic Competitiveness Wave Two: Who You Are – Can Arizona Be Competitive Wave Three: What Arizona Has in Resources to Commit to This Venture

The Liberal Borrowings

Knocking on the College Door (WICHE) Beyond Social Justice (WICHE) National Center for Higher Education Management Systems (NCHEMS) : www.higheredinfo.org. State Higher Education Executive Officers (SHEEO), SHEF Report, March 2011.

The Converging Waves

Wave One: Arizona’s Economic Competitiveness Wave Two: Who We Are – Can Arizona Be Competitive Wave Three: What Arizona Has in Resources

Relationship Between Educational Attainment, Personal Income, and Economic Strength

AL

AZ

AR

CA

CO

CT

DE IL

IN

IA

KY

LA

MD MA

MS

NJ

NY

ND OK

OR

SC

SD UT

VA

WA MN NH

TN TX

WV

WI

WY

$15,000

$20,000

$25,000

$30,000

15% 20% 25% 30% 35% 40%

Pers

onal

Inc

ome

Per

Cap

ita,

2000

Percent of Adults Age 25-64 with a Bachelor’s Degree or Higher

MT

HI

AK

GA

KS

ME NE

NV

NC

OH PA VT

ID

MI

MO

NM

RI FL US

Low Income, High Educational Attainment Low Income, Low Educational Attainment

High Income, High Educational Attainment High Income, Low Educational Attainment

State New Economy Index (2002) Top Tier Middle Tier Low Tier

Differences in College Attainment (Associate and Higher) Between Younger and Older Adults - U.S. and OECD Countries, 2005

Source: Organisation for Economic Co-operation and Development (OECD), Education at a Glance 2007

Differences in College Attainment (Associate and Higher) Between Younger and Older Adults - U.S., 2005

Source: U.S. Census Bureau, 2005 ACS

The White Caps on the First Wave

The Good News: Arizona considered a new economy state The Rest of the Story: Arizona is Slip Sliding Away

On Education Levels -- Behind and More Behind On Per Capita Income

The Public Policy Response: Thinking Here & Elsewhere

National/Federal

The Completion Agenda: The President’s Goal – Lead Again by 2020 Gates and Lumina Complete College America, NGA’s Complete to Compete, Completion by Design

The Productivity Agenda Lumina and Gates Evidence Based Practice – Data Base Development The Education/Workforce Linkage Performance Funding – Arizona – Leading Edge

The Public Policy Response: Thinking Here & Elsewhere

National/Federal The Quality Agenda

Lumina, Carnegie, and Hewlett Education for What Tuning and Degree Qualifications Quality Assurance -- Accreditation

The Public Policy Response: Thinking Here & Elsewhere

Regions & Their States East: Status Quo, more or less Mid-West: A Mixed Bag

Rhetoric trumps action South: Investing in Education

But still disconnects The Rest of the West

Mostly Broke and feeling sorry Trailing national reform

Arizona Investing in Performance

Lumina Productivity/Performance Funding Smart Growth

Still disjointed

The Converging Waves

Wave One:Arizona’s Economic Competitiveness Wave Two: Who You Are – Can Arizona Be Competitive Wave Three: What Arizona Has in Resources

Arizona Public High School Graduates 1991-92 to 2004-05 (Actual), 2005-06 to 2021-22 (Projected)

0

20,000

40,000

60,000

80,000

100,000

120,000

Hispanic White, non-Hispanic Public Total Source: WICHE, Knocking at the College Door: Projections of High School Graduates by State and Race/Ethnicity 1992-2022. 2008.

WICHE Projections of High School Grads

Source: WICHE, Knocking at the College Door: Projections of High School Graduates by State and Race/Ethnicity 1992-2022. 2008.

WICHE Projections of High School Grads

Source: WICHE, Knocking at the College Door: Projections of High School Graduates by State and Race/Ethnicity 1992-2022. 2008.

Arizona – Difference in Education Attainment between Whites and Hispanics (2009, Percent)

6.1

22.0

29.0

9.9

21.8

11.3

34.9

27.7

20.7

6.0 7.8

2.9

0

5

10

15

20

25

30

35

40

Less Than High School High School Graduate or GED

Some College, No Degree

Associate's Degree Bachelor's Degree Graduate or Professional Degree

White Hispanic

Source: U.S. Census Bureau, 2009 American Community Survey (ACS) Public Use Microdata Sample (PUMS) File.

Difference Between Whites and Next Largest Race/ Ethnic Group in Percentage of Adults Age 25-34 with an Associate Degree or Higher, 2000

Source: U.S. Census Bureau, PUMS (based on 2000 Census), Via NCHEMS

The White Caps on the Second Wave

Those with whom you have succeeded are declining Those with whom you have not succeeded are increasing “Average” won’t sustain you, and may not even be achievable

Will require 7.7% increase, year over year

The Public Policy Response: Here and Elsewhere

The Good News National Consensus Efforts Emerging focus on Equity – Arizona, Nevada, Wisconsin An emerging “Change” agenda – ASU/the Lower Cost Model, Metro state/NCAT Low hanging fruit – adults with some college

28 % of adult population

The Other News – Same Old, same old Mission creep—Not so in Arizona Focus on highest achieving (financial aid & enrolment protections)—Not so in Arizona Challenges to diversity & diverse populations Rearranging the Deck Chairs -- Governance

The Converging Waves

Wave One:Arizona’s Economic Competitiveness Wave Two: Who You Are – Can Arizona Be Competitive Wave Three: What Arizona Has in Resources

Life could have been worse Public FTE Enrollment, Educational Appropriations,

and Total Educational Revenue per FTE, U.S., Fiscal 1985-2010

Publ

ic F

TE E

nrol

lmen

t (m

illio

ns)

$12,000

Dollars per FTE

Educational Appropriations per FTE (constant $) Net Tuition Revenue per FTE (constant $) Public FTE Enrollment (millions)

Note: Net tuition revenue used for capital debt service is included in the above figures. All figures are adjusted by SHEEO Higher Education Cost Adjustment (HECA). Source: SHEEO SHEF 2010.

$10,000

$8,000

$6,000

$4,000

$2,000

$0

12.0

10.0

8.0

6.0

4.0

2.0

0

$7,47

9

$7,85

5

$6,91

2

$6,99

4

$7,22

7

$7,31

1

$7,54

7

$7,77

0

$7,21

1

$6,74

0

$6,66

2

$6,98

6

$7,19

5

$7,32

5

$6,95

1

$6,45

4

$2,24

5

$2,34

1

$2,40

3

$2,46

9

$2,51

8

$2,57

5

$2,65

7

$2,86

6

$3,04

3

$3,14

6

$3,23

0

$3,34

3

$3,37

5

$3,38

7

$3,38

4

$3,29

3

$3,27

8

$3,28

8

$3,36

0

$3,52

4

$3,71

8

$3,89

1

$3,98

2

$4,02

7

$4,10

8

$7,99

3

$7,98

8

$7,86

9

$7,82

5

$7,60

7

$7,17

1

$7,96

1

$8,03

5

$7,97

9

$7,68

2

$2,27

4

$2,37

1

$2,43

4

$2,50

1

$2,55

0

$2,60

8

$2,69

1

$3,27

1

$3,38

7

$3,41

9

$3,43

1

$3,42

8

$3,33

7

$3,35

6

$3,43

1

$3,61

1

$3,76

0

$4,06

8

$4,11

6

$4,17

8

$4,32

1

$2,90

3

$3,08

2

$3,18

6 $3,34

8

$14,000 14.0

$3,14

6

And the story is the same for Arizona $7

,242

$7,91

8

$7,53

0

$7,66

3

$7,56

2

$7,12

4

$7,00

9

$6,75

3

$6,73

5

$6,76

0

$6,98

1

$7,12

7

$7,29

4

$7,26

3

$7,37

1

$7,60

2

$7,49

3

$7,55

6

$6,89

7

$6,65

5

$6,63

0

$7,05

7

$7,53

5

$7,97

1

$7,69

0

$6,65

3

$2,32

3 $2,46

8

$2,66

0

$2,69

2

$2,73

5

$2,79

3

$2,89

7

$2,85

3

$2,85

3

$3,08

2

$3,12

3

$2,87

2

$3,24

5

$3,20

5

$3,17

1

$3,16

3

$3,37

1

$3,27

0

$3,13

7

$3,50

6

$3,69

4

$3,98

6

$4,23

0

$4,36

9

$4,64

8

$4,98

6

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

0

50

100

150

200

250

300

Note: Constant 2009 dollars adjusted by SHEEO Higher Education Cost Adjustment. 2009 Educational Appropriations include ARRA funds. (HECA) Source: SSDB

Public FTE Enrollment, Educational Appropriations and Total Educational Revenue per FTE, Arizona, Fiscal 1985-2010

Dollars per FTE

Educational Appropriations per FTE (constant $) Net Tuition Revenue per FTE (constant $) Public FTE Enrollment (millions)

Publ

ic F

TE E

nrol

lmen

t (th

ousa

nds)

Note: All dollars are adjusted by HECA, Cost of Living Adjustment, and Enrollment Mix.

Source: SHEEO SHEF

Educational Appropriations per FTE State Differences from U.S. Average Over 25 Years and in 2010 (Constant 2010 Dollars)

Note: All dollars are adjusted by HECA, Cost of Living Adjustment, and Enrollment Mix. Total educational revenuedoes not include net tuition revenue used for debt service.

Source: SHEEO SHEF

Total Educational Revenue per FTE State Differences from U.S. Average Over 25 Years and in 2010 (Constant 2010 Dollars)

Revenues Per Student from Net Tuition, State, & Local Appropriations Public Research

Sources: NCES, IPEDS 2006-07 Finance Files; f0607_f1a and f0607_f2 Final Release Data Files. NCES, IPEDS 2007-08 Institutional Characteristics File; hd2007 Final Release Data File. NCES, IPEDS 2006-07 Enrollment Files; ef2006a, effy2007, and efia2007 Final Release Data Files. Via NCHEMS

Revenues Per Student from Net Tuition, State, & Local Appropriations Public 2-Year

Sources: NCES, IPEDS 2006-07 Finance Files; f0607_f1a and f0607_f2 Final Release Data Files. NCES, IPEDS 2007-08 Institutional Characteristics File; hd2007 Final Release Data File. NCES, IPEDS 2006-07 Enrollment Files; ef2006a, effy2007, and efia2007 Final Release Data Files. Via NCHEMS

Projected State and Local Budget Surplus (Gap) as a Percent of Revenues, 2016

Source: NCHEMS; Don Boyd (Rockefeller Institute of Government), 2009 Via NCHEMS

The White Caps on the Third Wave

Prospects look bleak for much more in the short term New Normal suggests a very different future than past. Triage often sacrifices the most vulnerable

The Public Policy Response: Here and Elsewhere

A stimulus package that discouraged

innovation and change A funding structure that inadequately supports

equity oriented institutions– Less so in Arizona Mission creep, which reduces teaching

productivity– Less so in Arizona unless CCs Tax cuts over tax investments

The Arizona story – Three Huge Converging Waves

Demographics present a challenge, all else being equal

The finances are perilous

You are already starting from behind And simply catching up won’t be good enough

Nationally; others aren’t waiting for you Internationally; others are aggressively

The Arizona Story – Three Real Opportunities Opportunity One: Your Economic

Competitiveness Opportunity Two: Your Changing

Demographics

Opportunity Three: Your Revenue Base

The Arizona Story – Three Real Opportunities Opportunity One: Your Economic

Competitiveness

Arizona is a New Economy State

You have a base upon which to build You a part of the wealthiest country in the World. We

have “the financial capacity”

The Arizona Story – Three Real Opportunities Opportunity Two: Your Changing

Demographics Improvements in serving Hispanic students will reap huge benefits Low hanging fruit – adults with some college

The Arizona Story – Three Real Opportunities Opportunity Two: Our Changing

Demographics Positive Policy Trends

Pay for Outcomes Evidence based Elements focused on reducing the Gaps

Less is More in the Curriculum Reinvention of Remediation (NCAT)

The Arizona Story – Three Real Opportunities Opportunity Three: Your revenue base Arizona starts with a reasonable base You have room for productivity

improvement

Productivity: Total Funding per Degree/Certificate (Weighted*, 2006-2007)

29,0

75

30,6

19

33,2

73

33,7

56

34,3

30

34,5

94

36,4

98

37,8

23

38,3

64

38,3

65

39,5

16

39,5

16

39,9

18

42,1

77

42,1

98

42,4

08

42,6

93

42,8

47

42,8

73

42,9

48

43,8

20

44,2

72

44,3

71

45,8

33

45,9

04

46,5

22

46,8

80

47,4

53

47,6

72

47,7

49

48,6

11

49,8

94

52,4

91

52,5

72

52,8

88

53,5

35

54,5

53

56,0

90

56,2

80

56,8

88

56,9

60

59,4

20

59,4

65

63,8

22

64,9

34

65,9

75

66,6

23

72,8

46

75,7

44

79,7

94

86,0

09

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

FloridaColoradoW

ashingtonUtahNorth DakotaOklahom

aW

est VirginiaM

ontanaSouth DakotaKansasGeorgiaLouisianaW

isconsinIdahoNew Ham

pshireIllinoisM

ississippiArizonaArkansasM

innesotaOregonKentuckyIowaVirginiaM

issouriNationOhioIndianaNebraskaTexasSouth CarolinaNorth CarolinaM

ichiganTennesseeNew M

exicoCaliforniaM

ainePennsylvaniaAlabam

aNew YorkNevadaM

arylandVerm

ontNew JerseyM

assachusettsHawaiiConnecticutRhode IslandDelawareW

yoming

Alaska

Tuition and FeesState and Local

*Adjusted for value of degrees in the state employment market (median earnings by degree type and level)

Sources: SHEEO State Higher Education Finance Survey 2008; NCES, IPEDS Completions Survey; U.S. Census Bureau, American Community Survey (Public Use Microdata Samples)

The Arizona Story – Three Real Opportunities Opportunity Three: Your revenue base Arizona starts with a reasonable base You have room for productivity

improvement You have modest additional tax capacity

State Tax Capacity & Effort Indexed to U.S. Average

Source: State Higher Education Executive Officers (SHEEO)

AL

AK

AZ

AR

CA CO

CT

DE

GA HI

IL

IN IA KS

KY LA

ME

MD

MA

MS

MT

NE

NV

NJ

NY

NC

ND

OH

OK

PA

RI

SC

SD

UT

VT

VA

WA

FL

ID

MI

MN

MO

NH

NM

TN TX

WV

WI

WY

0.6

0.7

0.8

0.9

1.0

1.1

1.2

1.3

1.4

1.5

1.6

1.7

0.6 0.8 1.0 1.2 1.4

State Tax C

apacity (Total Taxable Resources Per C

apita)

State Tax Effort (Effective Tax Rate)

US

OR

The Arizona Story – Three Real Opportunities Opportunity Three: Your revenue base Arizona starts with a reasonable base You have room for productivity

improvement You have a smart proposed approach to

funding (except financial aid) investments likely to reap results

You have strong smart leadership (if they can find a way to work together)

The Arizona Story –

Perfect Storm

The Arizona Story –

Perfect Storm, or Perfect Opportunity Your Choice