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Wisconsin Higher Ed Funding Shift Inflated State Support

May 26, 2016 at 2:15 PM

States provide more than half of the funds available to public two- and four-year higher education institutions, and the vast majority of states still provide less funding to them than they did before the Great Recession, as we note in our recent paper.  But in many states, localities also provide substantial support for higher education, largely for community and technical colleges.  In 2015, localities gave schools more than $9 billion (while states gave nearly $79 billion).

A recent change in Wisconsin’s higher ed funding structure — shifting responsibility from localities to the state — could make it seem like schools there are faring better than they really are.  In 2014, Wisconsin state lawmakers assumed greater responsibility for funding the Wisconsin Technical College System, which was previously supported largely through local property tax revenue.  At the same time, they required local governments to cut property taxes by an equal amount — just above $400 million — and drastically reduce their support of these schools.  Effectively, they swapped local dollars for state dollars with no real increase in funding.

Our report focused on state support due to the outsized role it plays in higher education funding.  But in Wisconsin, looking only at state support led us to calculate that per-student funding for colleges and universities rose 3.3 percent since 2008.  In fact, if you exclude the shifted funding responsibility for the technical college system — which appears as additional state support — state funding for Wisconsin’s public two- and four-year institutions has fallen by roughly 25 percent per student since 2008.  This includes large-scale higher education cuts from Wisconsin lawmakers in 2015, including a $250 million cut to the University of Wisconsin system that caused harmful ripple effects on many of the system’s campuses.