February 2005
General Assembly should help state universities help Indiana
Jeff Smulyan, CEO, Emmis Communications
Indiana's state universities find themselves in a delicate position during this legislative session. Higher education is being asked to fulfill its traditional educational mission while playing a larger role in Indiana's economic development efforts, but nevertheless faces a flatline state budget proposal and legislative debate over tuition caps.
As the governor and the General Assembly look for honest solutions to the lingering state budget crunch, they must demand a "do-more-with-less" attitude from every outpost of the public sector. But limiting resources for higher ed would create a ripple effect that touches workforce development, technical assistance programs for Indiana business, cutting-edge research in technology and the life sciences, support for entrepreneurial companies — all vital to Indiana's economic future.
Indiana's universities educate a wide spectrum of Hoosiers, preparing young people to begin their professional lives as well as supporting non-traditional students seeking new skills and career choices.
But now more than ever, we also depend on higher education as an adjunct to the state's economic development apparatus. Purdue University and Indiana University both sponsor growing business incubators. In fact, the Purdue Research Park, home to more than 130 Indiana companies, was ranked the No. 1 university research park in the country this fall by the Association of University Research Parks. It also is home to the state's largest concentration of high-tech companies.
The research being conducted on our college campuses also provides the intellectual fuel for sectors like the life sciences and advanced manufacturing. Innovations that emerge from academic labs can be licensed to private companies or provide the spark for new businesses. At Purdue, many of the 40+ startup companies housed at the Purdue Research Park are based on intellectual property developed at Purdue. Nine companies have already been formed to commercialize research from the university's multi-disciplinary Discovery Park complex, which is still being completed.
It would be foolish not to support a higher education system that delivers so many benefits to the state, especially when accelerating our economic recovery is at the top of the public agenda.
The governor's budget proposal at least does not propose cuts to state universities. Indeed, with more than 30 states — including Indiana — facing significant budget deficits, our state universities haven't done badly in recent years: from 2001 through 2004, Indiana's public universities saw operating budget increases of 3 percent, compared to an average 4 percent cut nationally.
This is a positive trend, although Indiana still has a long way to go to match other states' total investment in higher education.
But there's also a hidden budget cut for state universities under consideration at the Statehouse — limiting universities' authority to set tuition rates for students, including an outright cap on tuition. Considering that state appropriations and tuition are the two primary sources of funding for public universities, the budget and tuition cap proposals together have the potential to adversely affect the educational and economic work of higher education.
The intentions behind the tuition proposal are good, but a tuition cap may be a rigid solution to an overstated problem.
According to recent studies by the National Association of State Universities and Land-Grant Colleges, the rate of tuition increase at U.S. public universities has slowed in recent years, with Indiana schools charging slightly less than the national average for tuition and fees. At the same time, since 1998, there has been an amazing 80 percent jump in financial aid targeted to families earning $40,000 to $100,000 per year. Looking at what the average student actually pays for college rather than the published tuition cost, this aid increase has reduced the cost of public university tuition by nearly one-third over the last seven years. In Indiana, costs are similarly contained; at Purdue, for example, the average net cost per year per student is $10,322 — actually down from $10,408 (in 2004 dollars) 10 years ago.
In the race for economic development, limiting resources to our universities is like tying a cinderblock to the ankle of our best runner. Let's hope that the governor and the General Assembly maintain our universities' flexibility on tuition and find ways to invest more in higher education operating budgets as well as key economic programs, like Purdue's Advanced Manufacturing Initiative and IU's research and technology transfer efforts. Indiana will be a better place for it.
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