Last week at a State Council of Higher Education for Virginia (SCHEV) board meeting, board member Heywood Fralin launched into an impromptu digression on a topic of great frustration to him: the claim that for every dollar the General Assembly has cut in state support to higher education, state colleges and universities have increased tuition by two dollars.
“Reports about tuition increases lack perspective,” said Fralin, a successful businessman and former head of the University of Virginia Board of Visitors. The two-for-one claim might reflect reality if you pick 1996 as a starting date, he said, but if you select 2001 as the starting date, you would see a one-for-one match between state cuts and tuition increases.
Fralin was correct in pointing out that it matters which start and end dates are used in making a statistical analysis. But was the year 2001 any more reflective of reality when analyzing the impact of state budget cuts on tuition than the year 1996?
The two-for-one claim likely originated in a presentation by fiscal analyst Tony Maggio at a House Appropriations Committee retreat in November 2016. At that event, Maggio shared the following chart:
By Maggio’s calculation, state support per in-state student (nobody is terribly concerned about out-of-state students) shrank by $1,634 inflation-adjusted dollars between 1996 and 2015. Over the same period, average inflation-adjusted tuition & fees increased by $3,186, almost twice as much.
Legislators picked up this factoid during the 2017 General Assembly session. During a press conference highlighting several bills designed to reign in runaway tuition increase, Sen. Bill DeSteph, R-Virginia Beach, declared, “For every dollar we cut, they raise tuition two dollars.” The claim was repeated in newspaper ads paid for by Partners 4 Affordable Education (a Bacon’s Rebellion sponsor). I’ve repeated the number myself on this blog.
A March editorial in the Virginian-Pilot, cited by Fralin, took exception to the two-to-one meme.
When an advocacy group recently placed newspaper ads and op-eds asserting that Virginia colleges raise tuition $2 for every $1 dollar of state funding cuts, it was the wrong thing to do. It was misleading to the point of being false.
Over the 15-year period since 2001, there has been roughly a 1:1 correlation between state funding cuts and tuition hikes.
How do you get a figure of $2 in tuition increases per $1? By including cuts made between 1996 and 2001.
It could have been far more useful to evaluate the 15 years between 2001-2015. That would include the last two recessions, along with corresponding budget cuts and tuition increases.
It is interesting to see the Virginian-Pilot accuse the newspaper ad of being “misleading to the point of being false” for picking a start date that fit its narrative while the editorial writer did precisely the same thing! The table below (also prepared by Tony Maggio) shows how a starting date of 2001, when state support was highest, would include the cuts in state support that followed and exclude the increases that preceded it, thus biasing the findings in a totally different direction.
The Pilot editorial writer did raise one interesting point: Perhaps comparisons should take into account the fiscal impact of the business cycle. In the writer’s view, it was important to “include the last two recessions, along with corresponding budget cuts and tuition increases.” Continue reading