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 DataPopulation

State population from U.S. Census Bureau

High School GraduatesCollected from the SHEFOs

First Time FreshmanCollected from IPEDS

FTE EnrollmentCollected from the SHEFOs

State and Local Government AppropriationsCollected from the SHEFOs

Tuition Revenues Collected from the SHEFOs

Median IncomeState median income of households from the

U.S. Census Bureau

Raw DataCollected 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)

Taxable ResourcesPotential 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 Gradx =

FTE

Pop

Student Source

HS Grad

PopState Tax Effort

Tax Coll

Taxbl Rev

State Tax Wealth

Tax Res

Pop

Tax Coll

Taxbl Revx =

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

Popx

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

FTEx

Tuit

SL-R App + Tuit=

Tuit

FTETuit

SL-R App + Tuit1–

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 Revx

SL-R App

Tax Coll=

SL-R App + Tuit

Taxbl RevTuit

SL-R App + Tuit1–

SL-R App

Taxbl Rev

Tuit

SL-R App + Tuit1–

=