At a recent Kentucky Business Summit hosted by the state Chamber of Commerce, Dave Adkisson, president of the chamber, shared information about Kentucky's declining financial commitment to education.
The share of the state budget going to education has been shrinking, while the share of the budget devoted to all other elements of state spending has been going up (largely for Medicaid, corrections and employee benefit obligations).
Adkisson made the powerful comment that Kentucky has been approaching its task of allocating state spending "bass-ackwards."
His observation was that we should start with meeting the critical needs of our education systems first, and then distribute what remains to the rest of state government.
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Having previously served in a state legislature, and as a state budget director, I know how complicated state budgeting is and how difficult it is to attempt to balance all of the competing needs. I also appreciate that in the past six years, the state and the nation have been through more economic challenges than at any time since the Great Depression. Through it all, there have been serious efforts to limit the impact of cuts on the education sector.
But the fact remains that the funding choices that have been made have diminished the capacity of our K-12 and collegiate educators to meet the needs of our students, and, just as importantly, the long-term needs of our citizens and our employers.
The share of the state budget appropriated to higher education has declined from 15 percent to 12 percent, which actually understates the problems facing our universities. Those numbers fail to take into account enrollment growth and inflation. If higher education today received the same number of dollars per full-time student available in the year 2008, an additional $400 million dollars would be allocated to our universities.
Many believe that declining state support has been replaced by tuition. But the data demonstrate that belief is wrong. Tuition revenue has only filled about half the financial hole created by the reduction in state support.
To make up the difference, our campus leaders are driving greater efficiencies through reallocating staff, restructuring degree programs, expanding use of technology, consolidating departments and processes, devising new ways to deliver health and pharmaceutical benefits, and greatly expanding energy conservation efforts.
As state support dwindles, campus leaders also are finding new ways to generate revenue by building philanthropic support, increasing out-of-state student enrollment since these students pay more than in-state students, and expanding research activities.
Some have observed that not everyone needs to go to college. While it is certainly true that not everyone needs a bachelor's degree, it is increasingly the case that nearly everyone will need some additional education beyond high school.
Providing the facilities, faculty and resources to assure we can meet these needs is critical to our students and to our state's capacity to grow economically.
Others have argued the campuses haven't had to lay many people off, some employees have gotten raises, and some presidents are paid too much. But those arguments ignore the realities of the higher-education marketplace.
Universities compete for talent internationally. They hire highly skilled and highly educated faculty. Even with modest raises, Kentucky faculty salaries rank in the lower middle of the pack compared to our neighboring southeastern states.
Beyond faculty, they are equipping science and computer labs with expensive and sophisticated equipment. And like any organization, attracting and retaining talented, inspiring leaders is vital.
The needs in K-12 are just as important as we improve our capacity to get more of our young people to graduate, ready for the workplace or to do postsecondary level work. While Kentucky's SEEK formula (basic funding that supports the K-12 system) has been kept intact in terms of constant dollars, it has not kept up with enrollment or inflation. And funding that used to be forthcoming to K-12 outside of the base formula has largely been eliminated.
Adkisson's urging is an expression of concern, not for the next election cycle, but for the long-term future of our commonwealth.
It will be entirely dependent on the quality of our work force, measured by how innovative and adaptable we will be, our capacity to solve complex problems, and how competitive our people will be with workers across the globe.
The edge we will need can only come from a robust, high quality education system, not one that gets attended to only after everything else is taken care of.