The Crisis in Higher Education: State Budgetary Health and Spending on Higher Education.

This paper addressees several questions about what the states spend on higher education, looking at the actual amounts spent in FY 03-04, the change in state budgets for the one, two and five years before FY 03-04, and the amount spent per capita in each state on higher education. The methodology compares the states graphically and in a multiple regression context, with standard state variables being used to explain the distribution of expenditures. In the case of the amount spent on higher education in FY 03-04, the study finds that expenditures closely accord with state populations, although states with highly professionalized (full-time) legislatures tend to spend an average of $200 million less than what their populations alone would predict. In the case of the change in state budgets over the last few years, the paper focuses on the two year change, from FY 2001-02 to FY 2003-04, finding per capita income and the percent growth in the 18-24 year old population seem to have no effect on the budget changes, but that the estimated deficit in the state is significantly related to the budget changes. The several political variables tested seem to have no effect on changes in the state budgets. In the case of per capita higher education expenses, the hypotheses were that these would relate to per capita incomes in the state and the percent increase in the 18-24 year old population; neither of these hypotheses receives any support. One of the several political variables is significant, but only barely so. In our next analyses we will be refining these models and examining other measures to help explain the conundrum of state spending on higher education. [ABSTRACT FROM AUTHOR]