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Posts tagged higher education

Too far for a tax-cutter

Posted June 13th, 2018 to Blog

Editor’s Note: This piece ran in the Wednesday, June 13, 2018, Cedar Rapids Gazette as a guest opinion from IPP’s David Osterberg.

The attack on higher education funding by the governor and legislative leadership has gone too far for at least one longtime tax-cutter.

Former state Sen. Larry McKibben, a member of the Iowa Board of Regents, expressed his concern about state support of universities. The regents voted Thursday to raise university tuition rates at Iowa, Iowa State and Northern Iowa universities, following $40 million in state funding cuts.

McKibben was forthright in blaming the legislative session for an increase in tuition at the three state universities and the loss of professors to better positions after years of low salary increases. From The Gazette’s story on the regents’ meeting:

“We have lost great folks, and now we are going to have to raise tuition,” McKibben said, noting that will persist “as long as we continue what I believe is, in my time on the board, the worst state government attack on our three public universities that I can ever remember.”

In fairness, the groundwork has been laid for this latest attack over many years. An Iowa Fiscal Partnership report in 2012 showed how spending on the UI, ISU and UNI dropped from fiscal year 2000 through fiscal year 2012.

An Iowa Policy Project analysis by Brandon Borkovec showed that adjusting for inflation, state funding for Iowa public universities has declined since fiscal year 2001 by 40 percent at UI, 42 percent at ISU, and 28 percent at UNI.

As a percentage of university budgets, the state share dropped by almost half from fiscal years 2001 to 2016.

Some of this happened on McKibben’s watch as one of the Legislature’s most powerful lawmakers on tax policy — one who often looked for ways to cut taxes, as he did in 2003 with a proposed flat tax that would have cost more than $500 million.

He did not intervene to rein in the Research Activities Credit, which sends more than $40 million a year to profitable corporations that pay no income taxes to the state.

He turned the other way as corporations raided Iowa’s treasury through tax loopholes at a cost of $60 million to $100 million a year.

As Regent McKibben, his new concern is understandable and his advocacy for college students laudable. He wants Iowa voters to pay attention and ask what candidates will do about severe underfunding that he says will assure more tuition increases. From the story in The Gazette: “I look forward to hearing the candidates say that,” McKibben said. “What are you going to do about higher education and our three great universities?” And what are you going to do to bring them back to level?”

These same trends were happening when McKibben was a legislator. Now, it seems, the governor and state legislative leaders have gone too far, even for him.

David Osterberg is founder and former executive director of Iowa Policy Project in Iowa City. Comments: dosterberg@iowapolicyproject.org

Tuition rising — anyone surprised?

Posted April 3rd, 2018 to Blog

Today’s announcement of plans to raise tuition at Iowa universities should not surprise anyone. When the Legislature cuts back, the regents need to fill in the gaps. And that creates new gaps, in family budgets immediately, and beyond, with — student debt.

A recent feature in The Des Moines Register has delved into the issue of rising student debt. The Register story features testimonies from soon to be graduates as well as recently graduated students, who talk about how they will handle their student debt. Register reporter Kathy Bolton cites “worrisome signs that future students will be forced to borrow even more to get their degrees.”[1] An excerpt:

State legislatures are decreasing funding to public universities and community colleges. In Iowa, for instance, state funding to the three public universities is now less than in the 2015 fiscal year. Mid-year budget cuts are expected this spring and there’s uncertainty about next year’s state funding.”

The full picture is considerably more stark. Adjusting for inflation, state funding for public universities has declined since fiscal year 2001, by 40 percent at the University of Iowa, 42 percent at Iowa State University, and 28 percent at the University of Northern Iowa.[2]

And these calculations do not include the recent current-year budget cuts for FY2018 ordered by the Legislature and signed by the Governor that took a disproportionate share from the regent institutions — $11 million or about one-third of the total.

To fill the financial needs of the institutions, the regents have turned to increasing the annual tuition paid by students. Between fiscal year 2001 and 2016, tuition at the regent universities has increased between 72 percent and 75 percent. [3]

In fact, there has been a shift in the primary source of funding, from state appropriations to tuition and fees. In fiscal year 2001 the University of Iowa received 63 percent of its budget from the state. In fiscal year 2016 it had dropped to 34 percent. For the other universities the drop was: 68 percent to 35 percent at ISU, and 70 percent to 56 percent at UNI.[4]

As noted in the Register article:

“Lower-middle-class and working families don’t have big chunks of money sitting around to pay for their kids’ college education,” said (Chase) Lampe, a Pleasantville High School social studies teacher. “As costs go up, students are going to take out more loans — or not go to college at all.”

While university tuition and fees rise, wages of Iowans have not kept pace. As part of the Iowa College Student Aid Commission’s annual report for fiscal year 2016,[5] director Karen Misjak stated that “one very simple number tells the story:”

Of the 175,500 Iowans who filed a FAFSA for the 2014-15 academic year, more than 60,000 were found to have an Expected Family Contribution of zero. That means one in three families could not provide any financial support for a student in college.”

How much harder has it become to pay for a college education in Iowa? In fiscal year 2001 individuals working at the median wage in Iowa could pay for the average tuition at the regent universities by working for 36 days. That number had increased to 60 days in fiscal year 2016 — a two-thirds increase. For low-income individuals, those working at the 20th percentile of wages, the challenge is even greater: days of work required increased from 53 to 92 — a 75 percent increase.[6]

There is a price to families when the Legislature chooses not to fund higher education.

[1] Kathy A. Bolton, “Degrees of Debt,” The Des Moines Register. 2018, https://features.desmoinesregister.com/news/student-loan-debt-poised-increase/

[2] Adjusted for inflation using the Higher Education Price Index, 2016 dollars.

[3] Iowa Board of Regents data; adjusted for inflation using the Higher Education Price Index, 2016 dollars, tuition and fees rose by 72 percent from 2001-16 at ISU, 74 percent at UNI and 75 percent at UI.

[4] Iowa Board of Regents data.

[5] Iowa College Aid Commission Annual Report for FY2016, “A letter from the executive director,” https://www.iowacollegeaid.gov/content/executive-director

[6] Author’s calculation of work days needed to pay tuition and fees is the NCES average tuition and fees (adjusted) divided by Economic Policy Institute analysis of Current Population survey data of Iowa median and 20th percentile wages, divided by 8 (hours).

Brandon Borkovec is a Masters of Social Work student at St. Ambrose University, working this school year as an intern at the Iowa Policy Project on public policy analysis. 

IFP News: Statement on Governor’s Address

Iowans cannot afford new raids on the General Fund when many public services have not been restored to pre-recession levels.

PDF (1 page)

IOWA CITY, Iowa (Jan. 14, 2014) — The Iowa Fiscal Partnership released the following statement today about Governor Branstad’s Condition of the State address in Des Moines:

Two high points stand out from Governor Branstad’s address today.

First, the Governor does not appear to be supporting new initiatives for general reductions in Iowa corporate or individual income taxes. These taxes already are low and quite competitive in the nation and region, as Iowa Fiscal Partnership analysis has demonstrated. Iowans cannot afford new raids on the General Fund when many public services have not been restored to pre-recession levels.

Second is a commitment to higher education, with the second year of a tuition freeze that will help undergraduate students at the state’s Regents universities. The Governor is right in targeting student debt as a challenge to an Iowa Dream of opportunity and prosperity.

The Governor did not close the door on — but also did not address — several other issues important to moderate- and middle-income Iowans.

Among those: improving the minimum wage, now starting a seventh year at $7.25; combating wage theft; boosting child-care assistance to make it easier for low-wage workers to take a job or seek new education or training. These issues have existed since before the Governor took office, and such moves to improve economic prospects for families and reduce poverty, would be a good followup to arguably the most important legislation he signed last year: doubling the Earned Income Tax Credit.

Despite recently strong revenues, Iowa faces critical fiscal challenges now and in the coming years due in part to the bipartisan property-tax cuts passed last year. While the Governor characterized this as “relief” for “middle-class families,” it is important to note that the property-tax package was almost exclusively geared to business — including large retailers that did not need the breaks. As IFP has noted,[1] these breaks and others pose many challenges for critical public services in the years to come.

The Iowa Fiscal Partnership is a joint public policy analysis initiative of two nonpartisan, nonprofit Iowa organizations, IPP in Iowa City and the Child & Family Policy Center in Des Moines. Reports are available at www.iowafiscal.org.


[1] “Iowa Budget Dilemma for 2014,” Iowa Fiscal Partnership, Jan. 13, 2014. http://www.iowafiscal.org/iowa-budget-dilemma-for-2014/