State Financing of Higher Education: The Annual SHEEO Survey

Fundamental Questions What is the state’s participation rate in higher ed? What is each state’s relative capacity for supporting higher education through tax revenues? What is the comparative extent of state support ? And how is it distributed ? What do families contribute ? What is the total per student funding for the instructional function in each state?

Sheeo’s Plan Preserving and expanding trend capability of Halstead’s survey Complete data collection from FY99-present New analysis from greater data collection Clear presentation of results Eliminate confusing and inconsistent terminology Graphical analysis of state, national & historical trends Currently receiving completed surveys Publish this fall

Interstate Comparisons Halstead’s survey used an indexing system, called the System Support Index, to allow for interstate comparisons. The System Support Index adjusted for differences in the cost of living and mix of institutional types. SHEEO is revisiting ways of indexing state data by looking at various ways to adjust for: cost of living comparisons institutional mix comparisons

Cost of Living Comparisons Statewide cost of living Metropolitan average & rural average Counties with higher education institutions

Institutional Mix Comparisons Carnegie 2000 Classifications as is Carnegie segmented by size Factor/Cluster Analysis alone

Raw Data P opulation State population from U.S. Census Bureau H igh School Graduates Collected from the SHEFOs F irst Time Freshman Collected from IPEDS F TE Enrollment Collected from the SHEFOs S tate and Local Government Appropriations Collected from the SHEFOs T uition Revenues Collected from the SHEFOs M edian Income State median income of households from the U.S. Census Bureau

Raw Data C ollected Tax Revenue State and local government tax collections from the Governments Division, U.S. Census Bureau Adjustment: Projected using previous data and projection rate (ex: 96 x ( ((95/94) + (96/95))/2)) = 98) T axable Resources Potential taxable sources: TTR = taxable portions of the Gross State Product plus income from out-of-state sources income from out-of-state state residents select federal $ net realized capital gains From the Office of Economic Policy, U.S. Department of Treasury Adjustment: State TTR x US collected tax revenue per capita x State Pop = Tax Capacity or Total Taxable Revenues (Halstead)

Formulas Productivity FTE Enroll HS Grad State Total Taxable Resources Tax Res Pop System Relative Size HS Grad Pop FTE Enroll HS Grad x = FTE Pop Student Source HS Grad Pop State Tax Effort Tax Coll Taxbl Rev State Tax Wealth Tax Res Pop Tax Coll Taxbl Rev x = Tax Coll Pop Wealth Rel. to Enroll Tax Coll Pop FTE Pop = Tax Coll FTE State Payment Priority State + Local – RAM Approp Tax Coll State Appropriations Tax Coll Pop x SL-R App Tax Coll FTE Pop = SL-R App FTE Family Share of Funding Tuit SL-R App + Tuit Tuition Revenues SL-R App FTE x Tuit SL-R App + Tuit = Tuit FTE Tuit SL-R App + Tuit 1– Family Effort Tuit FTE x Med. Inc. Total Funding SL-R App + Tuit FTE Tax Res Rel. to Enroll Taxbl Rev Pop FTE Pop = Tabl Rev FTE Overall Funding Effort Tax Coll Taxbl Rev x SL-R App Tax Coll = SL-R App + Tuit Taxbl Rev Tuit SL-R App + Tuit 1– SL-R App Taxbl Rev Tuit SL-R App + Tuit 1– =