Comment: 'College user tax' burdens
Michigan students more than others

For more than a decade, Michigan’s elected officials have imposed what amounts to a severe tax on the hundreds of thousands of students who attend our public universities.

The consequences of this “college user tax” – clearly amounting to millions of dollars per year – include raising the cost bar for young Michiganders to attend college by thousands, saddling graduates and their families with crushing college debt and making higher education impossible for others.

Worse, it is eroding Michigan’s ability to resurrect our struggling economy. According to a study released this week by Bridge Magazine, an online publication of The Center for Michigan, the non-profit, non-partisan organization I founded five years ago: “Michigan families pay more to send their children to state universities than families in almost any other state.”

The reason? A “decades-long decision to skim money from the state’s 15 public universities.” Michigan gives less money to its public universities than almost any other state. As state support drops, more of the cost of college is shifted to students and their families.

Bridge’s analysis found that 12 of Michigan’s 15 public universities had net student costs higher than their peer institutions across the country. The University of Michigan, for example, had a net cost per student of $16,888 in 2008-2009, the most recent year available -- more than $4,000 above equivalent institutions.

Michigan State, at $14,708 net cost, was the 15th highest of 73 schools in its peer group. Only Wayne State, the U-M Dearborn and U-M Flint had prices below their peer group averages.

Perhaps the most striking finding concerns Grand Valley State University in Grand Rapids. There, a four-year graduate pays an average of $23,000 more for a diploma than they would at an average, comparable out-of-state university. Grand Valley has the sixth-highest net cost and the third-lowest state support in a group of 161 similar universities. The bottom line: “Grand Valley has essentially been privatized,” says Matt McLogan, vice president for university relations at GVSU. “It’s publicly owned, but is no longer publicly supported in any way that people would recognize.”

Michigan’s “college user tax” is a  major problem. For example, the Bridge study found that a four-year in-state graduate from the U of M will spend an average of $33,860 more than a “Tar Heel” native would for a diploma from the University of North Carolina.

Bridge concludes that “Michigan public universities cost more because they are subsidized less by the state than public universities at other states.”

And the situation has been getting worse. Between 2005-2010, Michigan chopped around 20 percent from state support for four-year colleges; only Rhode Island and New Mexico cut more.

Last year, Gov. Rick Snyder and the legislature whacked another 15 percent from higher education for the current fiscal year. Michigan, which once was renowned for public higher education, is now among the bottom 10 states in per-capita spending on it.

When I served on the Board of Regents at the U of M in the 1980’s, money from the state roughly equaled what the school took in in tuition and fees. Back in the 1970’s, the school got three times as much from the state as it took in from students.
 
Today, these figures are reversed.

Former U of M President James Duderstadt told Bridge, “Elected officials have decided that Michigan will have one of the lowest levels of public support for higher education in the country. They decided that college isn’t a public good, but a private benefit.”

Well, an education certainly does benefit who receives it. A college graduate earns an average of $1 million more than a high school graduate over a lifetime. And sharply increased tuition doesn’t seem to have reduced demand for university admissions.

In the past, however, state policy-makers reasoned and understood that an educated populace was a benefit to the state, not least because low-cost access to college was the single greatest way for people to move up the social ladder – the promise of America.

And now more than ever, there are economic benefits, too. The state “Cherry Commission” on Higher Education and Economic Growth found in 2004 that states with the highest percentage of college graduates are the most prosperous. The Michigan Economic Development Corporation estimates that higher education is highly cost effective, generating $26 in revenue for every dollar invested.

Estimates vary, but Bridge found that just to reach the middle of the pack, Michigan would have to increase funding for higher education by 56 percent. To get to the top 10, we’d have double today’s spending. That would means either higher taxes or recasting priorities -- most likely, both.

Based on past state political practice, that seems unlikely … though disgraceful. Michigan has adopted a policy of “beggar our best.” We spend more on warehousing felons in our prisons than on educating our young people in college.

If we keep it up, we’ll all pay a terrible price.

Matter of fact, we already are.

Former newspaper publisher and University of Michigan Regent Phil Power is founder and president of the Center for Michigan, a nonprofit, bipartisan think-and-do tank. The opinions expressed here are Power’s own and do not represent the official views of the Center. He welcomes your comments via email. 

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