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In the Hoosier State, A Cause for Continuous Optimism


Jo Ann M. Gora


Whenever I attend a meeting or conference, the conversation inevitably turns to public funding of higher education, with colleagues exchanging facts, figures, and updates from their respective home states. Making these kinds of comparisons is entirely natural. But it can lead to generalizations and insufficient context. The fact is that nearly every state counts its fiscal support of colleges and universities differently; some include capital improvements and some do not, for example. In short, what appears to be a simple comparison is actually full of detail and nuance, and every small detail can have a big impact on the different universities in a state.

During these discussions, I find that my colleagues generally believe those of us leading Indiana’s colleges and universities are in a better position than those in other states. That is understandable. The headlines from 2009- 10, in particular, tell of massive higher education budget cuts in other states—36 percent in Nevada, 34 percent in Colorado, 24 percent in Louisiana, 19 percent in Ohio, and so on. Certainly, Indiana’s 1 percent cut the same year pales in comparison.

In fact, Indiana is one of the few states to show a surplus during the current recession, and the state’s leaders have excelled at stewardship of public funds over many years. The result is that colleges and universities here have not experienced the boom–and–bust cycles so common to higher education in other states over the last decade, but rather a slow and steady funding model. The national average for appropriations to higher education from 2004 to 2006 went from a 2.4 percent cut to an increase of 11.5 percent, according to Grapevine a compilation of state higher education tax appropriations prepared by the Center for the Study of Education Policy. Meanwhile, in Indiana, the same time frame shows a 3 percent increase declining to a 1 percent increase.

This same model holds true for the last three years. Nationally, higher education appropriations were cut 3.2 percent in 2009 and 4.5 percent in 2010, before rebounding with a 1.8 percent increase in 2011. In Indiana, 2009 brought a 3 percent increase, 2010 a 1 percent cut, and 2011 afforded no change in appropriations. In fact, since 2000, the highest percentage increase in state appropriations to higher education by the Indiana General Assembly has been 4.9 percent in 2007-08. By contrast, the national average of state support for education topped that figure four times.

It is true that this slow and steady model has allowed all of us who lead Indiana universities to thoughtfully plan our budgets and hold tuition increases to reasonable levels. However, it is also true that Indiana ranks 46th in the nation in public higher education funding per student, according to a 2010 report by State Higher Education Executive Officers. so we start from a much lower baseline than other states. A reasonable argument can be made that many of the universities in states that rank much higher on the list of public higher education funding still are better off today in terms of state support than Indiana’s colleges and universities, despite the deeper cuts they are experiencing in the current “bust” cycle. In fact, as of 2010, 26 states could cut their higher education funding by 30 percent and still have a higher per-student funding level than Indiana.

In addition, several specific items about Indiana’s funding of higher education prove the old adage, “the devil is in the details.” For many years here, the state has provided significant financial aid to students who attend private colleges. In the 2010 fiscal year, that financial aid totaled more than $71 million, which obviously skews the numbers reported here as state support of higher education, compared to what many other states report.

Another nuance in these comparisons is that, in every state, general figures tell the story only of the broad higher education sector, not the specific stories about how colleges and universities are being supported within that sector. Significantly, due to funding models here in Indiana, state appropriations are essentially being reallocated from four-year universities to the state’s two-year colleges. Given the fact that an increasing number of jobs in the next decade will need to be filled by graduates holding bachelor’s degrees from four-year institutions, this appears to be an unexpected result of the formula.

In fact, from fiscal year 2002 to the present, overall operating funding for Indiana’s public postsecondary institutions grew by 11.3 percent. However, within that overall number, Ivy Tech Community College, the state’s primary two-year institution, has seen funding increases of 79.3 percent over that time, while Indiana’s four-year residential campuses, including Ball State, have seen only a 0.4 percent increase during the same time frame. Thus, while the general statistics may appear positive, just beneath the surface lurk serious questions about whether the distribution of state support is appropriate and of long-term benefit to Indiana’s citizens.

The trend toward increasing public scrutiny of higher education and the emphasis on accountability for colleges and universities is detailed elsewhere in this issue. As with our colleagues in other states, we at Indiana’s colleges and universities are being asked to be more productive, more efficient, and more affordable. Members of the general assembly and the Indiana Commission on Higher Education have consistently and publicly recognized the importance of higher education. They demand that the state’s universities provide an educated workforce to lead Indiana as it transitions from manufacturing and agriculture to a more knowledge-based economy, and that those universities stimulate economic development to facilitate that transition.

In my fall convocation address to the faculty, I detailed why these challenges should be embraced, and we are doing so at Ball State. But I am also painfully aware that not all universities in the state have been rewarded equally for those efforts. The state’s most direct budgetary expression of this accountability is a relatively new performance-based funding model. Here again, the devil is in the details.

We have always taken pride in the fact that Ball State is a very lean university compared with others in the state and around the country, but the current formula fails to recognize efficiency in such areas as staffing, health care, and utilities. Even more problematic, is the fact that the formula fails to reward universities that feature stable enrollments over long periods, instead rewarding institutions for short-term enrollment growth. Because of these and other idiosyncrasies in the formula, Ball State has seen its state operating appropriations drop by 16.8 percent per student from 2008-09 to today, even as it has earned numerous national recognitions, including the sixth-largest percentage increase in six-year graduation rates among all U.S. public research universities. Because we are already lean, those cuts are even more painful.

One encouraging outcome from the budget discussions of last spring is that in its final budget bill, the general assembly required that the state’s commission on higher education collaborate with Indiana’s public universities to refine this performance funding formula, which has been so troubling to many of us. My fellow presidents and I are hopeful that this requirement will engender productive dialog among all stakeholders and will produce a formula that will more accurately reflect each university’s performance and reward the state’s highest achieving institutions.

While comparing public support of higher education from state to state is natural, it also can be misleading and short on context. Because of the various ways states assess fiscal support of their colleges and universities, an apples-to-apples comparison is nearly impossible. State support of higher education is full of nuance, and different universities are affected in different ways.

The slow and steady model that has characterized Indiana’s support of higher education does provide benefits for this state’s colleges and universities. We can make reasonable plans for the future without worrying about draconian cuts from the state. But that doesn’t change the fact that state support has been very low relative to most other states for quite some time. The ultimate outcome, as I tell my colleagues at those conferences and meetings, is that Indiana university presidents are no different than they are. We all must be innovative and aggressive in seeking financial sources to make up the difference as public support shrinks, especially through private fundraising, grant support, commercialization and technology transfer, and a host of other entrepreneurial activities.

Jo Ann M. Gora is president of Ball State University.