Another Conversation About Money

By Watson Scott Swail, President and CEO, Educational Policy Institute

Someday I want to be rich. Some people get so rich they lose all respect for humanity. That’s how rich I want to be.

Rita Rudner – a non-education expert from Harrah’s, Las Vegas, NV

Ah yes, money makes the world go ‘round. We all want it, we all work for it, and we all spend it. And it is the same in education. We all want more, and it is the one commodity that gets harder and harder to come by.

Of course, there is an argument of how much “more” we need to improve education, regardless of which level one speaks. Proponents suggest that unless we have more money, we can’t reform nor improve the education system, and can’t improve college access and success. Critics say that money isn’t the answer, and point to places like the DC Public School System, where money doesn’t appear to have done, well, anything good (don’t bother with the emails; you’re wrong). So, who is right? Both, of course.

We’ve discussed this issue before in the WIR, and I won’t totally bore you with a recap. But the issue came to mind again when I read the article posted below on the State Higher Education Picture 2007 by good-guy Doug Lederman at InsideHigherEd.com. Boulder-based SHEEO (State Higher Education Executive Officers) just released their FY2007 fiscal outlook which paints a mixed picture; mixed in the sense that overall, there was more money for higher education than in the previous year (3.3 percent after inflation and enrollment growth), but that the next few years look kind of ugly.

This is no surprise. When the economy turns, education takes an enormous financial hit. Education funding is not an entitlement, although many think programs like Pell are, they aren’t. Education programming at the federal and state levels are discretionary, and thus are perfect for the plucking when the economy goes south.

I fully understand tightening belts and trying to get more out of less, but I was surprised when I looked at the five-year changes in state spending per full-time student. Seven (7) states posted budget reductions of 20+ percent: Alabama (20 percent), Colorado (26 percent), Illinois (20 percent), Kansas (21 percent), Michigan (25 percent), Minnesota (26 percent), and New Jersey (21 percent). In total 36 states reduced their spending, after inflation is considered, over the last five years. On average, state appropriations for higher education sank 7.7 percent since FY2002.

Some could argue that our economy was in decline after the unsinkable 1990s economy (obviously, it was named “Titanic”), but the worst news is that the economy is now getting, well, worse! Regardless of yesterday’s report that the economy grew this spring, things are not very rosy. Just today, the Labor Department said that 51,000 jobs were lost in July alone, and unemployment is up to 5.7 percent. Not a bell ringer figure, but it is the seventh straight month of significant job losses (good for higher ed enrollments, actually).

Thus, expect belt tightening to continue. Last week the OMB said that this year’s federal deficit will be a record $482 billion. And this figure does not count $70 billion for the war, nor another $50+ expected for a second stimulus package, and several other items that nicely don’t get counted. So we are really facing a $700 billion deficit. On behalf of citizens and permanent residents of the United States: good luck to the next US President–you are going to need it. Read my lips–There will be blood–major cuts are necessary to bring our budget back into some semblance of balance. Don’t anticipate near future Pell increases…

Bottom line is that something is going to have to give, which is very difficult in (a) a Democracy and (b) a capitalist society. Somehow we have to get the political nerve to redefine the role of government and how money is spent. And it won’t be easy. We need some new leaders to show us how government can be done, where politics, at least Republican and Democrat politics, can be sidestepped so we can focus on improving America rather than trampling it. Unfortunately, I don’t see those leaders anywhere in sight. I don’t see it in Obama and I certainly don’t see it in McCain. The one person who had the skill set and track record to do so, former Virginia Governor Mark Warner, didn’t run for president and isn’t running for Vice President (he would have been a shoe-in for the latter and a good bet on the former). He will win his Senate seat this fall, but that makes him 1 in a 100.

As educators, traditionally left-wingers, we all have to resolve to fight to do things differently. Not just in Washington, DC, as is easy to blame (hey, you voted the reps there, not people living in Washington, DC!), but in the state capitols and city councils and school boards, which are becoming increasingly political all the time. We have to stop the movement for politics at all costs and move toward a more neutral, central ideology of what government is and what it is not. Clearly, we can’t have everything from government. As those on the right side of the aisle might say, government shouldn’t do everything and we should leave it up to the market. But that isn’t a totally healthy and realistic argument, either. Because government needs to take care of things that are in the best interest for society, and there are areas where the market clearly doesn’t do it right.

Yes, another uplifting blog by me. But this is our collective issues, and if we don’t do something about it, nobody will. And we have only ourselves to blame. Get involved.

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