RALEIGH – The recession has taken big bite out of the hides of lots of North Carolina institutions – banks, manufacturers, government agencies, and charities just for starters. Many thousands of North Carolinians remain out of work. Many more have lost income, or face daunting debts. But perhaps the most telling sign of economic distress has been the near-panic evident in North Carolina higher education.
In recent weeks, there have been several stories chronicling the effects of the downturn on the state’s university and community college systems. News of declining university endowments, a steep drop in annual giving, and operating losses at UNC-Chapel Hill, N.C. State, and UNC-Wilmington have officials looking for ways to economize. Some departments at Chapel Hill are consolidating their business operations. In the community college system, managers are in effect turning away some of the unprecedented number of students arriving on their campuses, because the schools lack the instructors, materials, and space to accommodate them.
Anyone who has followed North Carolina politics for any length of time has heard a lot of poor-mouthing from university leaders and their allies in politics, business, and the media. It is often said that the UNC system is the most important driver of the state’s economy, and that without additional tax dollars students will fail to graduate and businesses will fail to acquire the human and scientific capital necessary to prosper.
In reality, there’s never been much in the way of empirical data to support such assertions. But that doesn’t mean they haven’t, for the most part, persuaded their intended audiences. North Carolina continues to be one of the most generous state funders of higher education in the United States. Even after recent tuition hikes, students at North Carolina’s state colleges and universities fund very little of the cost of their own educations – less than a fourth in most cases, and less than a fifth in many.
What’s telling, then, is that in the midst of this Great Recession, the usual defenses of UNC largesse seem to be falling on deaf ears. The fiscal situation continues to be far too dire for too many people to sustain the argument that UNC deserves to be treated differently from other over-extended public and private institutions – particularly when the system’s problems tend to revolve more around enrollment increases, reflecting the fact that the price is still being held artificially low, rather than the declines in consumer demand other industries are experiencing.
To some extent, I think this reflects a different and welcome approach to the issue by UNC President Erskine Bowles. I also think it reflects an increasing level of maturity and skepticism on the part of policymakers and business leaders, an increasing percentage of whom have lived and worked in other states where state universities derive far higher percentages of their operating dollars from students and other direct beneficiaries rather than from taxpayers – and where smart people still flock, start businesses, build careers, and create economic value.
None of which is intended to minimize the difficulties that many UNC officials are experiencing, and the dislocations and disappointments that may result. It’s tough out there. It’s tough on everyone. What’s different is that higher education isn’t being treated differently this time.
Hood is president of the John Locke Foundation