The following editorial appeared in the June 2012 print edition of Carolina Journal:
It has become an annual ritual. University of North Carolina system officials come to Raleigh, hats in hand, begging the General Assembly to increase funding so they don't have to raise tuition to unconscionable levels. Lawmakers typically give in, even as parents chafe from their higher out-of-pocket costs and taxpayers wonder where the money is going.
North Carolina's public higher education system is a source of pride, and justifiably so. But we need better ways to assess the finances of higher ed, because too much of the roughly $9 billion in annual spending seem impossible to track. Money for higher ed comes from myriad sources -- direct appropriations from the legislature, tuition, fees, scholarships, research grants, donations, endowments, and more.
Fortunately, House Majority Leader Paul "Skip" Stam, R-Wake, has cut through some of the clutter. He asked the General Assembly's Fiscal Research Division to isolate direct legislative (taxpayer) spending on in-state, higher-ed students from the 2003-04 fiscal year through 2010-11. He also requested a calculation for spending on full-time equivalent resident students at UNC campuses and community colleges, and to adjust the figures for inflation.
The calculations did not include tuition or capital spending and also excluded specific types of non-student spending that are "administratively housed at UNC" -- such as UNC Hospitals, UNC-TV, and the North Carolina School of Science and Math.
Nor do they count spending on out-of-state students, whose higher tuitions are expected to cover the full marginal cost of their education.
In other words, these figures approximate how much state taxpayers are spending on North Carolina resident students at community colleges and four-year institutions.
Several conclusions leap off the page:
* UNC students are not cheap. In 2010-11, per-student spending at the UNC system was $13,442. By contrast, per-student community college spending was about 30 percent of that: $4,041.
* UNC took a modest -- not crippling -- hit during the recession. In inflation-adjusted terms, overall spending on UNC increased by 35 percent from 2003-04 through 2007-08. Then it fell, by 8 percent, from $2.08 billion in 2003-04 to $1.91 billion in 2010-11. But enrollment grew by 7 percent during the recession, leading to a 14-percent drop in per-student spending in 2010-11.
* Community colleges, by contrast, were hammered by the downturn. Community college spending peaked in 2007-08 at $844 million (2003 dollars). After two lean years, spending rebounded in 2010-11, leaving it $8 million below the peak. But enrollment had surged by 23 percent over that time. Per-student spending was 36 percent lower than it had been before the recession began.
Clearly, the taxpayers of North Carolina could get a lot more bang for the buck if state officials could encourage more first- and second-year students -- especially those who need remedial help -- to get associate degrees at community colleges.
And elected officials should push for even greater transparency in higher-ed spending, so that officials at these institutions can be held accountable for how they manage a valuable resource for all North Carolinians.