Understanding State Higher Education Politics: The Case of Tuition Policy

1. Understanding State Higher Education Politics: The Case of Tuition Policy Tara R. Warne University of Missouri Institutional Research & Planning warnetr@umsystem.edu

2. Purpose • Describe the context surrounding state level tuition policy making • Describe trends in tuition policy across the states since 2000 • Explore the causes of state level tuition policy change

3. Overview • General higher education context • Why study tuition policy • Components of tuition policy • Trends in tuition and tuition policy • Theoretical Framework and Methods • A closer look—Florida and Texas • Questions & Comments

4. Higher Education Context • At a dangerous juncture in state/public relationships • Accountability, academic freedom • The academic ratchet • Decline in state appropriations • Direct approp: 54% of revenue to 31.9% of revenue between 1997-2001 • Tuition and fees: 12.9 % of revenue to 18.1%

5. Prior Research • Emphasizes state support in terms of tax effort • Or, affordability and accessibility • Little work on policy making processes

6. Table 1: Relative Shares of Educational Expenditures Between Families, Taxpayers, and Philanthropy FY 1970 to FY 1996

7. Why tuition policy? • Untapped area of research • As tuition becomes a primary funding source we need to more about the rules of the “tuition game” • Policy fragmentation • Difference in language of policy analysts and political science

8. Components of Tuition Policy • Structural aspects • Mission-based • Tuition philosophy • Distributed authority • Indexing to external indicators • Cost differentials

9. Components Cont.’ • Tuition budgetary policy—policy responses to increasing tuition • Tuition policy—policies establishing actual rates or conditions under which they will be set

10. Types of Tuition Policies • Exemptions • Residency • Miscellaneous • Authority

11. Table 2: State Tuition Policy Activity 2000 to 2006

12. Table 3: States Changing Policy

13. Table 4: Philosophy and Tuition Policy

14. Tables 5 & 6: Tuition Philosophy, Tuition Rates, Tuition Change

15. Tables 7 & 8: State Tax Effort and Tuition Philosophy

16. Institutional Analysis & Development Framework • Definition: rules, norms of behavior, strategies, and their enforcement mechanisms pattern human interaction (North, 1990; Ostrom, 1999; Dill, 2003) • Three tiers of decision making: constitutional, collective choice, operational • Action arenas include action situations and actors

17. IAD (cont.) • Relevant variables: set of participants, their socio-political position, outcomes of actions, level of participant control, available information, costs/benefits assigned to potential outcomes • Actors are intendedly rational, but are fallible learners

18. IAD and Tuition Policy • College prices can be considered a collective action problem characterized by the following information asymmetries • Students/families lack information about quality and net price • Policy makers lack information about quality and cost • Institutions lack information about quality, cost, and policy maker preferences

19. Methods • This study examines the collective choice tier of decision making—how are tuition policies addressing tuition setting authority made? • Case Study Approach (Yin, 2003) • Pilot case selection: states were selected on the basis of having very active tuition politics • States: Florida and Texas • Data includes materials from state legislature, Governors’ offices, news reports, state agencies, institutions, and interest groups

20. Population (2004): 17,019,068 10 public 4-year institutions enrolling 199,535 students Average 2004 tuition for 4-year publics $2553 Tuition increased 33.6% from 2000 to 2004 Political Climate: Conservative Activist legislature Proportion of state expenditures going to H.E. declined from 9.5% to 8.4% between 2000 and 2004 Florida Demographics

21. Florida Tuition Policy • 2005: Tension among universities, Board of Governors, and legislature over tuition authority • 2002: constitutional amendment gave newly formed BoG sole tuition authority, which they ceded to the legislature in 2003 • HB 1001gave the legislature control over tuition (signed) • SB 2264 allows Boards of Trustees greater latitude in setting tuition and fees (vetoed) • HB 7087 Gives the legislature tuition authority for undergraduates

22. Florida Tuition Policy Cont.’ • Great deal of legislative and voter activity around the issue of university governance since 2000 • Perception of pork barrel politics driving H.E. policy • Council of 100 (business leaders) support higher tuition • Weak Board of Governors-began to assert itself in 2004 • Educators and attorneys filed suit against Governor and legislator to block increased leglislative control

23. Population (2004): 22,118,509 42 public 4-year institutions enrolling 353,826 students Average 2004 tuition for 4-year publics $3596 Tuition increased 58% from 2000 to 2004 Political Climate: Conservative Moderate legislature Proportion of state expenditures going to H.E. increased from 13.6% to 15% between 2000 and 2004 Texas Demographics

24. Texas Tuition Policy • 2003: HB 3015 Decentralized tuition authority to university boards ( in response to state budget crisis) • 2004: tuition increased prompt lawmakers to order an audit at UT and TAMU • 2005: dispute between UT and state auditor over calculation of financial need (UT prioritizes lower income students) • 2005/2006: state-wide discussions about flat-rate tuition

25. Texas Tuition Policy Cont.’ • Deregulation supported by UT and TAMU and business leaders • Less support from smaller institutions • UT Watch organized strong resistance to tuition increases • Disputes budget crisis rationale • Regent positions are seen as patronage appointments • Business leaders advocate corporate approach to running university finances

26. Discussion • Declining state budgets are not the only reason for tuition increases, institutional politics is also important. • IAD is a promising framework—allows for systematic comparison of tuition policy making across states

27. Future Research • Part of larger project comparing the explanatory power of three theories of the policy process • 50 state regression study of tuition and state expenditures • Case study comparison of tuition policy in 4-5 states

28. Questions & Comments • Contact Information Tara R. Warne Associate Research Analyst UM Institutional Research & Planning warnetr@umsystem.edu THANK YOU!