- Report Published -
|Studying the Funding of the Commonwealth's Public Institutions of Higher Education|
|State Council of Higher Education for Virginia|
|HJR 519 (Regular Session, 1995)|
|House Joint Resolution NO. 519, proposed by the House Committee on Rules and patroned by the Honorable Kenneth R. Plum, directed the State Council of Higher Education to study the funding of the Commonwealth's public institutions of higher education. In conducting its study, the Council was asked to consider, among other things, current funding levels and practices for comprehensive and two-year institutions in the Commonwealth and in other states; the individual missions of Virginia's institutions; recent institutional restructuring plans; and any related issues.|
The major findings of the study are:
- From 1990 to 1994, state general fund support decreased and total funding increases for Virginia's public colleges and universities came almost exclusively from tuition and fee increases. In 1994, with increased general fund support, tuition and fee increases moderated to about 3 percent annually.
- In 1994-95, Virginia ranked 30th amount the states in total spending per student from both the state general fund and tuition and fees. When adjusted for inflation, the total expenditure per full time equivalent (FTE) student is almost exactly the same in 1995-96 as it was in 1989-90.
- Virginia's public system of higher education is not funded adequately to perform its mission for the remainder of the 1990's, and this is particularly true for some institutions. To address this, the Council recommended that funding for college and university educational and general programs be increased by $197 million for 1996-98, with $140 million of the total to be provided from the state general fund.
- Funding levels, and funding levels per student, should vary among institutions according to their different missions, characteristics, and programs.
- Seventy-seven (77) percent of the money colleges and universities will spend in 1996-96 is for faculty and staff. In other words, about three-fourths of any variation in spending among institutions is accounted for by variations in the number of people they employ and what they pay them. Personal service expenditures per student strongly correlate to staffing ratios and average salaries.
Institutions with large numbers of students enrolled in more faculty-intensive disciplines such as engineering, sciences, and foreign languages require more faculty and staff than institutions with greater enrollment in business, education, and letters. Institutions with large numbers of students enrolled in graduate programs also require more faculty and support staff.
Faculty salaries vary according to each institution's faculty salary peer group. Peer groups are used to reflect each institution's market for faculty. As a result, faculty are paid, on average, more at some institutions than at others.
Nonpersonal service expenditures account for 23 percent of institutions' expenditures. There is great variation in the nonpersonal service expenditures per student among institutions. Some institutions are funded significantly below the average for all institutions of a similar type. But except for equipment, there are currently no good measures to determine whether an institution has adequate nonpersonal service funding to do its particular job.
The two principle sources of revenue for educational and general expenditures are tuition and fees and the state general fund. Like total spending, variations in the percentage of general fund support among institutions are appropriate. In large part, these variations are dependent on the number of students from in and out of the state. According to formulas used until 1990, the more in-state students an institution had, the more support it received from the state general fund.
Virginia students at senior institutions pay 37 percent of the cost of their education, with Virginia students at some institutions paying as much as 44 percent of total cost. The same percentage was 25 percent at senior institutions in 1989-90. This change creates inequities in the amount of general fund support institutions receive. It also creates inequities from the student's perspective. Virginia students at some institutions pay a higher proportion of the cost of their education than do students at other institutions. The percentage of the cost of their education paid by community college students has also significantly increased since 1989-90.
The Council of Higher Education's 1997-98 budget recommendations addresses the issues identified in this study. The Council recommends that faculty salaries be increased in 1996-98 as the first two years of a four-year goal of funding every institution at the 60th percentile of its individual peer group. The Council recommends that all institutions increase their staffing productivity, that some institutions be funded for more staff based on an analysis of staffing at like institutions in other states, and that some institutions be funded to employ more staff for enrollment growth that exceeds 2 percent a year. The Council also recommends that funding be increased to begin to address inadequate funding for nonpersonal services.
Finally, the Council recommends that the state general fund contribute the major portion of the total cost of its recommendations, thereby lowering the proportion of the total cost borne by student tuition and fees.