Thursday, September 22, 2016

Tax Cuts Deliver Higher College Tuition, Fail to Grow the Overall Economy | janresseger

Tax Cuts Deliver Higher College Tuition, Fail to Grow the Overall Economy | janresseger:

Tax Cuts Deliver Higher College Tuition, Fail to Grow the Overall Economy

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I suppose you have noticed that substantive discussion of our nation’s problems has fallen by the way in this year’s election season. At best candidates are selling reform proposals without explaining exactly how such plans could be realized and precisely how they would address very real problems. Everybody seems to believe in free tuition at public colleges and universities, for example, but there are few clear answers about why college costs have skyrocketed in recent years and where the money to underwrite free tuition would come from.
Despite that historically our society has affirmed the role of public institutions paid for by taxes for ensuring essential services and protecting the good of the wider community, and despite that we have traditionally believed that the tax code should be progressive with the heaviest burden on those with the greatest financial means, an anti-tax climate now dominates our politics. Funding for essential state services—social services for the poor, public K-12 education, and in recent years state colleges and universities—has fallen by the way.  Doug Webber, an economist at Temple University, one of Pennsylvania’s public universities, explains: “It’s tempting to blame Temple’s shiny buildings and new administrators for the big increase in tuition. But there’s another, much more important reason for the rising costs.” Since 2000, “Pennsylvania’s state government (has) cut its per-student appropriations by $6,000 in inflation-adjusted dollars. The rapid increase in the cost of college in recent decades—and the associated explosion in student debt, which now totals nearly $1.3 trillion nationally—is all too familiar to many Americans. But few understand what has caused the tuition boom, particularly at the public institutions that enroll roughly two-thirds of all students at four-year colleges. Many commenters, particularly in the popular press, focus on ballooning administrative budgets and extravagant student amenities…. but by far the biggest driver of rising tuitions for public colleges has been declining state funding for higher education.”
Webber examines the facts: “At most, about a quarter of the increase in college tuition since 2000 can be attributed to rising faculty salaries, improved amenities and administrative bloat.  By comparison, the decline in state support accounts for about three-quarters of the rising cost of college… (I)f Pennsylvania restored funding for higher education to its 2000 levels, Pennsylvania’s public research institutions could reduce tuition by nearly $4,000 per year without altering their budgets.  For students, the impact could be even greater once loan fees and interest were taken into account… If funding had held steady, universities could have Tax Cuts Deliver Higher College Tuition, Fail to Grow the Overall Economy | janresseger:
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