Beneficial Budget Cuts?

State legislatures across the country, facing economic problems and declining tax revenues, are slashing funding for state universities: $400 million down in North Carolina, more than $1 billion cut in California. Universities, understandably are concerned about this and plead that less money will make it more difficult to educate students. Not so fast, writes Jay Schalin of the Pope Center for Higher Education Policy: budget cuts can promote efficiency and higher quality. Well they can, but they surely won’t.

As Schalin explains:

Yet the budget cuts could be one of the best things to happen to public higher education in a long time. By making cuts strategically, schools can rid themselves of superfluous programs and become more focused and rigorous.

After all, private firms routinely take advantage of lean times to make themselves stronger through innovation, management efficiencies, such as consolidation, and the sale or closure of underperforming units. That same sort of tactical discipline should work equally as well in an academic environment that has seen almost nothing but growth since World War II.

Schalin recommends cutting administrative bloat, capping enrollment, “concentrating their focus,” and increasing the teaching loads of faculty. While I’m not sure that all the things he suggests are necessarily good ideas, there’s little need to worry. They won’t do this. It’s very interesting to think that colleges will operate like “private firms… [and] take advantage of lean times” but colleges are not private firms.

What they will do, faced with less state money, is jack up tuition and fees. They will consolidate or eliminate unpopular academic programs, despite their quality. This will not actually promote efficiency, but it will make the programs crappier. The schools will also not be likely to cut high-paying administrative positions. (Administration accounts for about 20 percent of college costs.) Administrators, indeed, make decisions about where to cut budgets. Would you eliminate your own job? No, they will likely lay off low-level staff and reduce the benefits of the faulty.

The trouble with this “less money will promote efficiency” line of thinking is that it’s basically from the mythical fantasy land of college administration. It’s just not how colleges operate. State colleges have been getting less money from states for decades. That hasn’t made the colleges more efficient; it’s just made them more expensive for students.

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer