Explaining trends in interstate higher education finance: 1977 to 1996

Public resources in the form of legislative tax appropriations have evolved into the primary financial source of state support for public colleges and universities. The continued use of state tax support for higher education is tied to a state's fiscal capacity to provide such support in relation to funding other state priorities, and also is related to the effectiveness and affordability of postsecondary education. This trend analysis study identified, analyzed, and compared various trends in interstate higher education appropriations related to five specific issues within a 20-year period from 1977 to 1996. These issues included: (a) trends in individual state per capita appropriations; (b) trends in per capita appropriations relative to per capita personal income; (c) trends in appropriations relative to FTE student enrollment; (d) differences in per capita appropriation percent change among the four predominant groups of higher education governance structures; and (e) differences in per capita appropriation percent change among the six types of public school equity litigation group decisions.;The study revealed the following results. Regarding trends in per capita higher education appropriations, it was found that 48 states (96%) experienced linear (20 states or 40%) or cubic distributions (28 states or 56%) over time. This finding supports the contention that annual state higher education appropriations are the result of incremental budgetary increases that keep pace with inflation. Regarding trends involving per capita higher education appropriations relative to per capita personal income, only six states (12%) were found to have positive slope trend lines over time. This finding indicates the alarming decline in effort by a majority of states to fund higher education although most had experienced increased state revenues relative to per capita personal income. Regarding trends involving higher education appropriations relative to FTE student enrollment, it was found that 49 states (98%) had positive slope distributions over time regarding trends relative to the ratio of appropriations to FTE student enrollment. This finding supports a contention in the literature that indicates that higher education appropriations will increase if enrollments increase. Regarding trends involving differences in per capita appropriation percent change among the four predominant types ofhigher education governance structures, a finding in the study indicated that Group 3 RCBs experienced the most notable positive difference in percent change over time. This finding indicates that these structures maybe more effective in integrating the desirable aspects of institutional and/or system autonomy while successfully communicating their needs to state government. Regarding trends related to differences in percent change in per capita appropriations among six types of K-12 litigation decisions, the study revealed that states whose plaintiffs were victorious in school finance court decisions experienced a 16.9% greater immediate (two year post-decision) increase in per capita higher education appropriations than did states whose plaintiffs lost. This result helps to disprove the contention that successful K-12 plaintiff litigation will subsequently reduce higher education funding, and affirms an earlier finding that litigation plaintiff victories can positively impact the entire state educational budget.