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Manhattan Institute

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Pensions Are Killing Higher Education

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Pensions Are Killing Higher Education

U.S. News and World Report June 2, 2017
Public SectorPension Reform
EducationHigher Ed

States are opting to fund pensions and other obligations over education.

Higher education funding cuts have received a great deal of attention in recent years – and for good reason. Last year, 46 states spent less money per student than they did in 2008. Widespread cuts have raised concerns over rising tuition, faculty job security, and the quality of the student experience.

It is easier – and more politically expedient – to cut higher education than it is to cut other areas.

The common assumption is that higher education cuts are just another consequence of states tightening belts in the wake of the Great Recession. But a closer look at the health of state finances tells a different story. State government tax revenues now exceed pre-recession levels and spending in almost every budget category has grown since 2008. Unfortunately, higher education is not following the same pattern. America's public colleges and universities enjoy the dubious distinction of being the only major budget category in which states are cutting back.

In a new report, we show just how far higher education has dropped down states' priority lists. Spending on hospitals, policing and public welfare are all up by at least 10 percent. The most notable increases are on public employee pensions, which grew the fastest in terms of total liabilities and expenditures. In short, pensions are crowding out higher education.

To pay for rising pension costs and obligations in other areas, states deem higher education to be expendable. How did we get to this point? Because it is easier – and more politically expedient – to cut higher education than it is to cut other areas.

First, states have strong incentives to....

Read the entire piece here at U.S. News & World Report

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Daniel DiSalvo is a senior fellow at the Manhattan Institute and associate professor of political science at the City College Of New York (CUNY). 

Jeffrey Kucik is an assistant professor of political science at the Colin Powell School of the City College of New York (CUNY).

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