My recent posts on government waste and fraud, and the total fucking idiots who believe that our state’s $5 billion budget gap could be closed merely by eliminating it, have sparked an energetic debate in the comment threads, so I thought it might be worthwhile to drill down on the subject even further, by examining one of the more talked about chunks of the state budget: higher education.
Let’s start with a basic assumption that, just like in most private sector organizations, a governmental agency’s single largest expense tends to come in the form of employee compensation. Indeed, this is particularly true of state and local governments, which generally provide commodity services performed by highly trained professionals, for example: doctors, nurses, attorneys, social workers, police officers, firefighters and, of course educators. (This truism, by the way, also helps explain why the cost of providing state and local government services tends to inflate faster than the Consumer Price Index, as such professional services do not lend themselves toward automation or outsourcing, and thus do not offer the same opportunity for productivity gains as the economy at large… but that is a subject for a different post.)
So if much of the cost of running state government comes in the form of employee compensation, then higher education is the perfect segment of the budget in which to look for waste and fraud, as it currently consumes 48,200 full-time equivalent (FTE) positions, roughly 44 percent of the 109,970 FTE staff years in the 2009-10 state budget as a whole. (Note, while K-12 spending consumes a much larger chunk of our state’s general fund, K-12 staff are not state employees.)
That’s a lot of FTEs devoted toward higher education—over 21,000 at the University of Washington alone! So, how wasteful is all this higher ed spending? According to the comparative metrics I can dig up… not so much.
- UFWS Blog
The first question to ask is whether Washington simply picks up too much of the cost of higher education compared to other states, especially at this time of fiscal crisis, and the answer is an emphatic “No!” For example, while Californian’s lament that under Gov. Jerry Brown’s proposed austerity budget, tuition payments would for the first time exceed the state’s contribution to their university system’s general fund, Bill Lyne points out at the United Faculty of Washington State’s blog that Washington already crossed that line two years ago.
Under Governor Gregoire’s proposed budget, student tuition would account for 70% of our budgets and state support would drop to 30%.
Under Governor Brown’s proposed budget, state funding for universities would fall to 1998 levels. Here in Washington, we are already at 1991 funding levels. Governor Brown’s proposed budget would reduce UC per student state funding to $7210. Governor Gregoire’s proposed budget would reduce per student state funding at Western Washington University to $2900.
That’s right, California—incredibly budgetarily fucked up California—is still proposing to fund its university students at two and half times the rate Gov. Gregoire proposes to fund students at Western. If Gov. Gregoire’s proposed cuts go through, it will amount to a 50 percent cut in state higher education spending over two bienniums, while slashing the state contribution to half the national average.
- UFWS Blog
- Note: on this chart, FTE means “full-time enrollment”
Okay. So proportionally, our taxpayers are investing less in higher education than those in California or most other states, steadily shifting the funding burden onto the backs of students. But what are we getting for our money? Again, according to Lyne:
The cost of a university education has not been spiraling out of control—it costs about as much now as it did in 1991. Tuition has been going steadily up because state support has been going dramatically down.
… Now, everybody, follow the bouncing ball: Washington’s universities are among the worst funded in the country and yet among the most highly rated, with the best graduation rates per 100 students enrolled of any state in the country.
That’s right, Washington’s public universities rank first in the nation in undergraduate degrees awarded per 100 enrolled students, and second in graduate degrees… yet our taxpayers spend less per student than in most other states. I’m not sure exactly how to measure productivity in higher education spending, but I’m guessing that’s as good a metric as any.
Unfortunately, the flip side to our relative lack of investment in public education is that Washington also sports one of the lowest rates of bachelors degrees produced per 1000 population aged 20 to 34, thanks largely to the paucity of available slots at our four-year universities.
Oh sure, we keep hearing politicians and pro-business think tanks demanding more efficiency and greater accountability from our public universities and community colleges, and there’s nothing wrong with striving for efficiency and accountability. But in terms of degrees produced per tax dollar spent, we’re already tops in the nation.
So tell me… where’s all that waste and fraud we keep hearing about? How is it possible to attribute 16 percent of our state budget to waste, when the segment that consumes 44 percent of state FTEs arguably boasts the highest return on investment in the nation?
Or, do the anti-tax/anti-government advocates actually believe that higher education and other core budget drivers are inherently wasteful in themselves, however efficient, being outside what they view to be the proper scope of government? If that’s the case, I wish they’d just be honest and say so, so that we can get on to a productive debate over budget priorities, and stop wasting our time on overblown fantasies of rampant government waste, fraud and abuse.
A lot of those “employees” are working on federal and private grants. The state acts as a pass-thru.
“Removing” them would not “save” money.
A few people I have talked to look at moving government employees from defined benefit pensions to defined contribution plans as the #1 way to cut waste. Some of them make some compelling arguements.
Just cut every state employees pay ten percent. Everyone. No exceptions. They can riot and sue and cry and stomp their feet.
So it surprises you that people who lack a grasp of grade-school arithmetic are the same people who fail to see the value in public education?
Vince @3,
You could cut every state employee’s pay by ten percent, and still not close this shortfall. And, since the sales tax revenue on which we rely for over half our budget grows slower than the economy, and thus slower than growth in demand services, we’ll be right back where we started in another five to ten years.
So… do we just cut state employees pay by ten percent every ten years? Do market forces cease to operate, permitting the state to draw highly qualified workers at a fraction of the pay they’d earn in the private sector?
Vince, then they can get jobs in the private sector. Which is what they’ll do. Treating government employees badly is a sure-fire way to get incompetent, corrupt government employees.
Croak!
Well, I can assure you that my pittance of a UW salary is definitely wasteful and fraudulent. I don’t do dick here. I just hope nobody finds out that I’ve trained all these fish to take care of themselves or I’m out of a poverty-level sinecure.
Well if enrollments are uniquely low and graduations uniquely high, that tells me little about the quality of the institution, but it does say that we’re denying admission to some marginal students because of that dearth of slots.
Martin @8,
Like I said, I don’t know exactly how to measure productivity in higher education, and the correlation you make is certainly reasonable. But the question is, do we want to deny these “marginal” students an opportunity to obtain a four year degree?
That certainly doesn’t seem to be the policy objective of the legislature, which at the same time it is cutting higher ed funding, is also instructing the universities to generate more degrees.
@7 shhh. If they find out about the mutated fish and the self-controlling lasers, they’ll start expecting the biochem experiments to run themselves …
I made a whole $4000 per quarter teaching a class of 100 as a grad student at UW in the 90’s. I was not a TA, nor did I have any TAs. I was the sole instructor. That’s $40 per student for an entire quarter.
Had they cut any more “waste” from my salary, I would have qualified for food stamps.
Rarely is the question asked: Is our children learning?
@5 That’s better than facing pay increases we cannot afford.
Soon, the only young people we’ll be educating properly will be rich Chinese. There must be consequences for voting for Eyman insanity. The public must face the stark reality.
Yeah, 44% of state FTEs in higher education definitely seems inherently wasteful. We’ve got 44% of salaried state employees serving middle and upper class young adults? That sounds like a complete waste to me.
@13 I don’t see that being a good example to demonstrate to the public its own stupidity. How about cutting infrastructure projects (viaduct replacement anyone)? Far more visible and public employees are derided too often anyway. Most of the rank and file don’t make gobs.
@15 Everybody in the private sector can be fired. Everybody in the private sector takes pay cuts when forced to look for work. In fact, few people in the private sector have health insurance or vacation. They survive, barely. When you are untouchable, you hold all the cards. There is something wrong with that.
Vince, wouldn’t it be better to work for improvements in the condition of private sector employees, rather than working to make the conditions of public sector employees worse? Spite is a poor argument.
You also haven’t explained who is to do the teaching if the already low pay of most academics is cut even further, nor have you explained how the government is to justify breaking its contracts with academic employees. If the government, even, will not honor the contracts it makes, then who in the private sector will?
I’m not sure how true this is, but the chairman of my department here at UW said yesterday that every dollar the state spends on higher education brings $44 back to the economy. It’s a no brainer to protect the higher education budget as much as possible. Spending on higher education isn’t wasteful, it’s a good investment no matter how the economy is doing.
Vince @3, 16:
If you think education is expensive, try ignorance. Oh, wait.
The UW’s burden can be eased by properly funding the Community College system and by reinstituting the long-standing rule that the UW MUST accept anyone with a WA CC Associates degree. The Leg overturned this rule several years ago and they should bring it back.
It should be recognized that the UW is a major research institution in a lot of areas and that a lot of this research results in licensing fees to the UW. This research feeds the Med school, the Engineering school, and a lot of other programs. By easing the UW’s duty to teach freshman and sophomores, the Profs can concentrate on their upper-division and graduate students and on research in their chosen field.
The UW’s burden can be eased by properly funding the Community College system and by reinstituting the long-standing rule that the UW MUST accept anyone with a WA CC Associates degree. The Leg overturned this rule several years ago and they should bring it back.
It should be recognized that the UW is a major research institution in a lot of areas and that a lot of this research results in licensing fees to the UW. This research feeds the Med school, the Engineering school, and a lot of other programs. By easing the UW’s duty to teach freshman and sophomores, the Profs can concentrate on their upper-division and graduate students and on research in their chosen field.
If you look at a list of the State’s highest paid employees most of them are professors at the Medical School. However, they are not paid by WA state taxpayers, they provide their own salaries with huge grants that they obtain for the University. Those grants not only pay their salaries but those of RA’s, lab technicians and custodial help. They do bring a lot of money to the state that will be spent and on which sales taxes will be paid for purchases made out of salaries down the line.
Accounting for costs and benefits of the U is extremely complicated and inexact and will never be clear to most of the public.
I suspect that Yes is the answer to your final question, “do the anti-tax/anti-government advocates actually believe that higher education and other core budget drivers are inherently wasteful in themselves?”
“Everybody in the private sector can be fired. Everybody in the private sector takes pay cuts when forced to look for work.”
Except you forget those that don’t get fired: the ultra-rich that should be paying more to make up for the shortfall, not public employees. If there was a department that was a “trouble department” then, yeah, fire them.
Also, layoffs DO happen in state and municipal governments too. It’s just an absolute fiction that all are “untouchable.”
@2 – since we’re discussing higher education here: The retirement plan for faculty and professional staff employees at the UW and other state universities already is a 403(b) defined-contribution plan, almost exactly like a private-sector 401(k).
“Everybody in the private sector can be fired. Everybody in the private sector takes pay cuts when forced to look for work.”
When you see Frank Blethen standing in line at the local unemployment office, give me a call.
@23 – Yeah, the over 8,000 state employees who got laid off this last biennium might take issue with the ignorant garbage spewed by the guy who thinks government workers never get laid off.
@16 – And another thing. There’s not a single comparably-sized employer who doesn’t offer benefits comparable to what the state offers. And study after study shows that even with their slightly better bennies, the majority of government workers make less than their private sector counterparts. This is somewhat less true at the very bottom of the ladder, but the gap between public and private pay grows as you go up the ladder. As a result, professionals are routinely paid anywhere between 5% and 15% less than their private sector counterparts, and executives are paid far, far less than their counterparts.
So, yeah, it’s a spiffy idea to cut the already non-competitive pay that public sector professionals are getting, so that the folks who oversee the construction of your roads and who teach your kids are people who are at the bottom of their respective professional barrels.
Two words: income tax. We Washingtonians blew it this last referendum. This state needs to drop its regressive tax system and ask those who benefit the most in our economy to pay for the infrastructure that allowed them to be successful. We could make up a lot of the shortfall (not all, to be sure) by creating a structure that allows (and compels) the wealthiest to contribute to that infrastructure, including higher education.
I am a professor at a state-funded college. I love paying taxes, since they fund a democratically elected body that helps decide where to spend them, and everyone benefits from those taxes in one way or another. Taxophobes have helped create this crisis.
I think we need to call this “waste and fraud” argument out for what it really is: a rationalization that allows otherwise good people to make selfish and short-sighted decisions.
I can’t tell you how many voters I’ve talked to that, in their hearts, believe in a better world for their children and essential community services like public education. They also then want lower taxes, because it sucks to pay taxes, and the rich need them to want lower taxes. So how to reconcile what’s right with what’s easy? Pretend what’s easy is also right.
Therein we get the “government waste and fraud” argument, really.
Let’s not forget that UW grads are fueling our economy. I didn’t go to UW, but I’ve worked in a number of high tech companies including Amazon and have noticed that UW grads are everwhere. Cutting funding to higher education feels very much like killing the goose that lays golden eggs because you got hungry one day.
Kids that are in higher ed are typically taking huge loans to finish their education and every bit helps. These are the same kids that are likely the top of their classes and will eventually become our tax payers.
If we’re going to stay competitive in a global economy we need to make sure to keep our education system stays healthy. We need to remember that this is an investment and not just another cost.
What @22 said. Try finding a surgeon for $105k in the private sector.