Study Links State Higher-Education Spending to Demographics and Economy

A new analysis of state spending on higher education finds that states with a diverse economy, low unemployment, and a history of support for higher education are likely to maintain public spending on colleges. Conversely, states that do not have those characteristics have a hard time overcoming fiscal challenges to create a robust system of higher education.

The study, described in a report titled “College Funding in Context: Understanding the Difference in Higher Education Appropriations Across the States,” was conducted by researchers at the University of Minnesota-Twin Cities’ department of organizational leadership, policy, and development. It found that states that are leaders in higher-education spending tend to stay at the top of that category, creating a kind of “virtuous cycle.” The study was published by Demos, a nonpartisan organization that studies and advocates for government spending to promote economic equality.

Specifically, the study found that a one-percentage-point increase in unemployment correlates with a seven-percentage-point decline in state appropriations per full-time-equivalent student, or “FTE.”

An older population also corresponds with less state spending on higher education, the researchers found. “For every 10-percentage-point increase in the proportion of a state’s population that is 65 or older,” they write, “there is an almost 7-percent reduction in FTE state appropriations for higher education.”

Higher voter participation in presidential elections, they found, also correlates to less spending on higher education. That finding, the authors write, suggests that widespread economic struggles over the four-year election cycles “may relate to voter participation in national elections and negatively impact state higher-education budgets.”

Using case studies from Colorado, Louisiana, Minnesota, and Pennsylvania, the researchers also tied strong gubernatorial leadership (though not partisan affiliation) and ties between legislators and colleges to higher levels of state support for higher education.

“Historically, both Minnesota and Pennsylvania developed a robust system of public and private higher education in relationship to sustaining a diversified economy with demand for highly skilled labor,” the report concludes. “Louisiana and Colorado, in contrast, illustrate that states rich in natural resources may have difficulty creating an appetite for higher education among elected officials and the public at large.”

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