Governor Walker released his budget proposal yesterday, which includes about $138.5 million for the University of Wisconsin System (UWS) over the next two years.

This $138.5 is broken down into four main buckets:

• $50 million from a lapse (i.e., funds promised but never delivered last biennium)
• $42.5 million for a new performance-based funding program
• $35 million to reduce tuition sticker-price by 5%
• $11 million for employee compensation

There are several other items worth following, including opting out of allocable student fees, faculty workload monitoring, mandating internships, having 60% of academic programs offer 3-year bachelor’s degrees by 2020, and providing financial aid for Flex Option students.

But for now, let’s focus on these bullet points and situate this budget proposal in the broader context of historical General Purpose Revenue (GPR) funding for UWS.

A quick detour/primer on GPR:  The state of Wisconsin generates most of its GPR via individual income and sales tax (85% of total GPR), but it also supplements with corporate tax (7%), excise tax (5%), and other sources of revenue (4%). When the legislature and governor finalize the budget, GPR funds are then appropriated to help UWS cover the costs of delivering higher education, namely by covering the salaries, wages, and benefits for faculty and staff while also subsidizing campus operations/maintenance and debt service expenses.

When the UWS was created in 1973, nearly 120,000 full-time equivalent students (FTE) enrolled across all campuses. Enrollments grew until the mid 1980s, flattened and dipped until the early 2000s when it steadily rose until after the Great Recession. Since 2010, enrollments have been slowly declining and the most recent data shows about 150,000 FTE are enrolled across the system. The dotted line is simply a flat line from the most recent enrollment level, as we should not expect much enrollment growth for the foreseeable future.

Figure 1: FTE enrollment in UWS

Source: UW System Accountability Dashboard

Despite this long-term enrollment growth, GPR revenue has steadily declined over time, shown in Figure 2.

Figure 2: GPR funding levels for UWS (2016 dollars, mil.)

Source: Wisconsin Legislative Fiscal Bureau , LFB Informational Paper #32, and Governor’s budget.

The small dotted line at the end represents Governor Walker’s recent budget proposal, which would appropriate $1.057 billion and $1.076 billion in fiscal years 2017 and 2018, respectively. This budget proposal would bring Wisconsin back to 2010 levels and about $170 million behind pre-recession levels. About 32,000 more FTE students enroll in the UWS today compared to 1973, yet GPR funds are about $500 million lower than that year.

This means state investment is not keeping pace with enrollment growth, as shown in Figure 3. In the 1970s and 1980s, the state invested between $10,000 and $12,000 per FTE, but this changed around 2000 when per-FTE investment has steadily eroded.

Figure 3: GPR appropriations per FTE (2016 dollars)

Source: UW System Accountability Dashboard and LFB (see Figures 1 and 2 sources)

Unlike some other public services, colleges and universities are able to generate revenue via user-fees (tuition and fees). So, as state funding erodes, these user-fees have risen and students are now investing more in the UWS than the state of Wisconsin.

Below are two figures illustrating this point. Figure 4 shows all funds for the UWS, which sums to over $6 billion. State GPR covers about 17% of the total budget, whereas students cover about 25%. These funds (tuition and GPR) cover the core instructional costs for undergraduate education and it is what academic and non-academic units on campus use to deliver high-quality education. The other funds listed below are neither fungible nor targeted solely for undergraduate education: federal research grants, financial aid, and gifts/trust income are restricted for specific uses; auxiliaries are self-sustaining enterprises and cost recovery/operational receipts are project and program specific.

Tuition and GPR are the most important resources UWS campuses have available for ensuring classes are available, faculty and staff can deliver high quality services, and that students are well prepared for life after college. And research consistently shows state investment pays off by improving access, degree completion, shortening time-to-degree, so there is good evidence to support this investment. Tuition increases can discourage students from enrolling, but this can be counteracted by investing in student financial aid programs (particularly need-based aid).

Figure 4: UWS All-Fund Operating Budget (2016-17)

Source: Wisconsin Legislative Fiscal Bureau (2017). Informational Paper #32.

Figure 4 shows that student’s tuition revenue ($1.54 billion) now exceeds state investment ($1.05 billion). But when did this tipping point happen for the UWS? Have students always carried a larger share than the state? Due to data unavailability, the chart below only shows tuition and GPR from 2004 forward.

Figure 5: Total UWS revenue from tuition and GPR (2016 dollars, mil.)

Source: LFB Informational Paper #32, Table 11.

I am in the process of documenting years prior to 2004, but this shows clearly that the tipping point occurred in 2010, when students first began carrying a larger share of the UWS budget than Wisconsin. And this gap has grown over time, where students now pay about $1.50 for each $1.00 Wisconsin invests in the UWS.

The dotted lines in Figure 5 represent projections based on Governor Walker’s budget. It includes the $21.25 million of performance-based funding for 2017 and 2018, respectively. It also includes the $50 million funding lapse and the anticipated $11 million (for employee compensation) based on the Governor’s estimated cost savings from self-insurance. It also accounts for the 5% decrease in sticker-price tuition, which would occur in 2018.

It is hard to estimate what the $35 million (5% reduction) in tuition would look like in practice since sticker-price tuition is not a good proxy for net tuition revenue. A student could be charged a lower sticker price, yet still end up paying more tuition if financial aid does not fill unmet financial needs. To bring the evidence base to bear on this budget proposal, two recommendations emerge:

• The $35 million in tuition reductions would be better targeted to need-based financial aid (via HEAB’s Wisconsin Grant program) which has lost its purchasing power over the years. This type of aid has also been shown to increase degree completion, so it would be an effective and efficient way to target resources to the most price-sensitive students.
• The $92.5 million from the prior budget lapse and the new performance funding model would likely go further if it was targeted to capacity-constrained campuses that have been most affected by recent budgetary cuts. Making these colleges whole (or working to that end) would make more courses available for students while helping campuses provide high-quality academic and student support services to ensure timely (and more affordable) degree completion. Targeting resources into these “shovel-ready” projects will generate large private and social returns for the state of Wisconsin.

Data (see figures above for sources)

Year	GPR (2016 $, mil)	Tuition (2016 $, mil)	FTE	GPR per FTE	Tuition per FTE
1973	1533		118787	12908
1974	1478		120551	12261
1975	1396		124389	11221
1976	1442		123559	11673
1977	1455		125361	11608
1978	1455		125134	11628
1979	1414		127094	11126
1980	1346		131630	10226
1981	1290		134652	9578
1982	1270		135591	9369
1983	1317		137675	9564
1984	1312		138042	9508
1985	1335		139472	9569
1986	1326		139371	9516
1987	1344		136722	9829
1988	1342		137222	9780
1989	1369		135116	10129
1990	1374		134908	10187
1991	1339		134511	9953
1992	1362		131640	10346
1993	1367		129566	10553
1994	1388		127494	10885
1995	1339		125754	10649
1996	1292		126007	10254
1997	1316		127649	10306
1998	1341		130898	10243
1999	1385		133235	10394
2000	1443		135205	10670
2001	1447		137730	10507
2002	1442		140000	10299
2003	1308		141500	9245
2004	1262	1025	142209	8871	7211
2005	1219	1057	144298	8445	7326
2006	1244	1083	144814	8592	7477
2007	1306	1088	147956	8829	7351
2008	1327	1094	149493	8875	7317
2009	1275	1176	153193	8323	7678
2010	1298	1224	156039	8318	7842
2011	1069	1290	155163	6888	8315
2012	1187	1335	154843	7664	8624
2013	1186	1359	153252	7741	8867
2014	1195	1368	152773	7820	8954
2015	1043	1410	150832	6914	9348
2016	1049	1430	150000	6991
2017 (est)	1057	1430	150000	7046
2018 (est)	1076	1395	150000	7170

In the politics of education course I teach this semester, I was looking for a nice overview of trends in party control for Congress and state legislatures. Just a simple chart showing trends in which party holds the majority in the House and Senate and whether similar trends occur in state legislatures. We often just focus on one or the other, but I want to see Congress and states on the same graph.

But I couldn’t quite find what I was looking for. So in its absence (and in losing patience digging around), I compiled data from the Senate and House history pages along with the National Conference of State Legislatures partisan composition page.

A few notes about what’s being measured here. For the states, NCSL tells us whether both chambers are controlled by a given party. If Democrats hold both chambers, then the state is coded as “Democrat.” States are coded as “Split” if Democrats carry one chamber and Republicans the other. Nebraska is omitted because it has a non-partisan unicameral legislature, but I put them in the “Split plus NE” category just so we have all 50 states. And all data are as of January of the given year, except 2016, which uses December to reflect the outcomes of the most recent election:

In this time frame, Democrats held party control in state legislatures until the early 1990s. At that time, states were becoming more split and slowly more Republican-controlled until Democrats gained a short-lived advantage around 2006. This results in an inverse portrait where 31 states were controlled by Democrats in 1978 and, fast-forwarding to the post-2016 election, 32 states are now controlled by Republicans.

Shifting gears to Congress, the chart shows the percentage of members from each of the two parties:

In the Senate during this period, Democrats went from a high of 58 of seats in 1978 down to 46 in the current (115th) Congress. In the House, we see similar trends where Democrats held 64% of seats in 1978 and this has slowly dropped to about 45% today (194 D to 241 R).

But these three charts are hard to put the full picture together, so the following combines them into a single visualization that I think tells the story a little clearer:

This chart shows three lines: the two light blue lines show the percent of Senate and House seats held by Democrats, the dark blue is the share of state with Democratic party control. Same goes for Republicans:

For a brief period in the early 1980s, Democrats held majorities in the House and Senate while also having party control of the majority of state legislatures. This is now the situation for Republicans, who have picked up state legislative party control and have gained majorities in Congress since 2010-2012.

These trends aren’t really surprising since we know Republicans have control of legislative chambers both in the states and in Congress. But how this has changed over time, the magnitude of growth, and overlaying these trends onto the same graph is something new to me. This helps me frame our class discussions around the broader political, social, demographic, and economic mechanisms driving these changes. I am no political scientist, so I can’t get too deep in the weeds, but this can help me frame some of our discussions around the broader partisan context in which higher education policy is being made.

Sources: Senate: https://www.senate.gov/history/partydiv.htm, House: http://history.house.gov/Institution/Party-Divisions/74-Present/, NCSL: http://www.ncsl.org/research/about-state-legislatures/partisan-composition.aspx

Data:

	Senate			House			State Legislatures
	Dem	Rep	Oth	Dem	Rep	Oth	Dem	Rep	Split+NE
1978	58	41	1	277	158	0	31	11	8
1980	46	53	1	242	192	1	28	15	7
1982	46	54	0	269	166	0	34	10	6
1984	47	53	0	253	182	0	28	10	12
1986	55	45	0	258	177	0	27	9	14
1988	55	45	0	260	175	0	29	8	13
1990	56	44	0	267	167	1	29	6	15
1992	57	43	0	258	176	1	26	7	17
1994	48	52	0	204	230	1	22	15	13
1996	45	55	0	207	226	2	20	17	13
1998	45	55	0	211	223	1	20	17	13
2000	50	50	0	212	221	2	16	18	16
2002	48	51	1	205	229	1	16	21	13
2004	44	55	1	202	231	2	19	20	11
2006	49	49	2	233	198	4	23	16	11
2008	57	41	2	256	178	1	27	14	9
2010	51	47	2	193	242	0	27	14	9
2012	54	45	1	201	234	0	15	27	8
2014	44	54	2	188	246	1	19	26	5
2016	46	52	2	194	241	0	14	32	4