URI Funding Benchmarks: 2012 Update

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This personal Web page is not an official University of Rhode Island Web page. See disclaimer

This page updates "Research Benchmarks: Funding University Research Operations and Infrastructure," (RI Economic Policy Council, 2001) (last update, 2008). Data are appended as excel spread sheets or charts; sources are indicated on the page, on "larger image" pages, or on the excel charts. Direct inquiries to mayfly@uri.edu.

CPI to adjust for inflation uses Bureau of Labor Statistics; see first excel table. The state budget data was copied by hand from many volumes at the URI library; more recent budgets and the 2012 Governor's recommendation Budget are online.

I. URI Budgets Since 1950

The first three charts look at State general revenue expendituresas reported in the annual State Budget. At the time of this posting, the 2012 budget was an on-line recommendation from the governor; it is not the final budget that will be enacted. The 2011 budget is as enacted, but the fiscal year is not complete and there will be recisions and adjustments within the year. Normally, the budget is audited and expenditures corrected for the previous three years, so that an accurate tracking of actual expenditures isn't available for about 3 years. That is, in the published 2011 RI State Budget (online) we have final figures for 2009, preliminary audited expenditures for 2010, and an enacted 2011 budget.

1) RI's budget grows; URI's budget shrinks.

  • The State's inflation-adjusted general revenue budget peaked in 2008, before the national recession.
  • From 1971 to 2011, the State's inflation-adjusted general revenue budget increased by 87%. URIís general revenue budget decreased by 41%.
  • Adjusted for inflation, URI's 2011 general revenue budget about equals budgets of 1966-67.
  • Enrollment at URI was 14,031 in 1970 and is projected to be 14,643 in 2012.
  • The 2012 governor's request for URI general revenue (i.e.,state-only funding for URI) would increase 4.5% from 2011.
  • For 2012, the governor's budget has a General Revenue Total (i.e., the whole state budget without federal funds) increase of 5.66%.

2) URI gets a declining % of RI's budget.

  • In 1971, URI received 7.66% of RIís General Revenue Budget; In 2011, URI received 2.41%.
  • This portion is less than in the 1950s, when URI was the State College, with a third of its present students and faculty.
  • The Governor's recommendation for 2012 was 2.38%

3) RI funds a declining percentage of URI's budget.

  • From 1950 to 1971, URIís total budget was often >50% from RI general revenues.
  • As recently as 2004, URI received 20.2% of its budget from RI general revenues.
  • In FY2011, 10.5% of URIís budget was general revenue.
  • State support was halved between 2004 and 2011; on this trajectory, URI would be fully privatized (zero state support) by 2019, making RI unique in the US for having no public state university.
  • The Governor's recommendation for 2012 was 10.9%.

II. Benchmark State Support for Higher Education Operating

These three charts place RI's current support for higher education on a national comparison, adjusting for size of the state's population and personal income. Data for charts 4 & 5 are from a national, on-going survey maintained by Grapevine, a project of the Center for the Study of Education Policy, Illinois State University. Chart 6 is based on US Census Bureau and Bureau of Economic Analysis.

Sources:

4) RI Per Capita Support for Higher Education Operations is below the national average.

  • For FY2012, state-only funds for higher education operating nationally average $233.08 per capita.
  • RI FY2012 state-only funds for higher education operating were $155.55 per capita, 66.7% of the national average (rank: 43rd among 50 states).

5) RI Support for Higher Education Operations as $dollars / $1000 personal income is below the national average.

  • For FY2012, state-only funds for higher education operating nationally average $5.62 per $1000 of personal income.
  • RI FY2012 state-only funds for higher education operating were $3.53 per $1K P.I., 62.7% of the national average (rank: 44th among 50 states).

Sources:

Sources:

6)Rhode Island personal income is above the US average.

  • For FY2012, average per capita income in the United States was estimated to be $41,594.
  • Rhode Island per capita income at this time was estimated to be $44,117 (rank: 14th among 50 states).

III. Support for Public Higher Education and the Distribution of Private Wealth

In the spirit of the teachable moment that is Occupy Wall Street, the next four charts ask whether there is a connection between the transfer of wealth in the US (and RI) to the super rich and the decline of public support for higher education.

7) Lower income groups pay a higher percentage of income in state and local taxes.

  • State and local taxes, the source of state funds for higher education, come from sales and excise taxes, property taxes, and income taxes.
  • In 2007, on average in the US, the lowest 20% income group paid 10.9% of income in state and local taxes.
  • In 2007, on average in the US, the top 1% paid 5.2% of income for state and local taxes.
  • In 2007, in RI the poorest 20% paid 11.9% of income in state and local taxes; the top 1% paid 5.6%.
  • The national average ratio of taxes paid as % of income was 2.1:1 for the bottom 20% versus the top 1%; RI's ratio was slightly above this.

Sources:

8) After-tax US income disparity has been growing for 30 years.

  • Average real after-tax household income of the 1% with the highest income grew by 275% between 1979 and 2007.
  • For the rest of the top 20% (81-99%), average after-tax household income grew by 65%.
  • For the in middle 60% (21-80%), growth in average income was just under 40%.
  • For the bottom 20%, after-tax household income grew ~18%.

9) Rhode Island income disparity is growing faster than the national average.

  • The richest 20% in RI have average incomes 7.5 times as large as the poorest 20%; The gap in RI is 12th largest in the US. This ratio was 5 in the late 1980s.
  • RI's late-1980s to 2005 rate of growth in income inequality was the 2nd largest in the US.
  • The top 5% in RI have average incomes 13 times as large as the poorest 20%.
  • The incomes of the richest 20% of RI families are 2.5 times as large as the middle 20%. This gap is 24th in the US.

Sources:

Source:

10) The public misperceives the degree of wealth concentration in the US.

  • High-income earners are able to accumulate wealth, becoming the "wealthy."
  • The top 20% of income earners in the United States hold nearly 84% of national wealth. The wealth of the 4th (20-40%) quintile (0.2%) and the bottom (0-20%) quintile (0.1%) are too low to show on the bar diagram.
  • The top 400 families in the US are reported to hold as much wealth as the bottom 50% of the population, some 155,000,000 Americans.
  • When asked to estimate how much wealth was held by the top 20% of income earners, a large sampling of Americans estimated the figure to be 59%.
  • When asked to set an ideal distribution to the wealth of the upper 20%, the sample population chose 32%, with much larger percentages going to the lower 60%.
  • The three bands in this figure reflect actual US wealth distribution among quintiles based on income, the estimated wealth distribution, and a mean "ideal."

IV. Transferring Higher Education Costs to Graduates

"Just as the housing bubble created a mortgage debt ďoverhangĒ that absorbs the income of consumers and renders them unable to afford to engage in the consumer spending that sustains a growing economy, so too are student loans beginning to have the same effect, which will be a drag on the economy for the foreseeable future."

The Student Loan "Debt Bomb": America's Next Mortgage-Style Economic Crisis? (pdf), National Association of Consumer Bankruptcy Attorneys (NACBA), Feb. 7, 2012.

11) RI College Graduates are "High Debt"

  • 2/3rds of US college seniors who graduated in 2010 had student loan debt, with a national average of $25,250, up 5% from 2009.
  • It is estimated that RI 2010 graduates had an average debt of $26,340; this was 9th highest in the US.
  • 67% of RI graduates had student loan debt; this was also 9th highest in the US.

Source:

Source:

12) College Costs Are Rising Faster Than Other Costs

  • "College tuition and fees today are 559 percent of their cost in 1985. In other words, they have nearly sextupled (while consumer prices have roughly doubled)."
  • "But at least at public colleges and universities ó which enroll three out of every four American college students ó the main cause of tuition growth has been huge state funding cuts."

Why Tuition Has Skyrocketed at State Schools, Catherine Rampell, NYTimes, March 2, 2012.

9) Should URI be a "top 100" research university? The "top 100" research universities are ranked on NSF's science and engineering expenditure data. URI and Brown were both "top 100's" in the early 1980s; In 1985, Brown ranked 99 and URI 100. In 2006, Brown ranked 100 and URI 145. To have tied Brown's 100th ranking in 2006, URI would have needed over $87 million in research expenditures (2.22 times URI's actual expenditures). (See ProJo from June 10, 2006)

Source: National Science Foundation—WebCaspar (webcaspar.nsf.gov)

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Source: National Science Foundation—WebCaspar (webcaspar.nsf.gov)

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10) RI was 49th in State Support for University Research in 2006. The mean $'s per capita of state funds (state agency funds to both public and private institutions for contracted research plus state university (i.e. "public") institutional funds) for 2006 was $19.15 in Rhode Island, 47% of the national average of $40.88, placing Rhode Island next to last in the nation. With recent cuts in state support to URI, RI can not avoid returning to last place.

11) Rhode Island is 45th in supporting Higher Education Operations. Rhode Island's per capita 2008 state allocation for higher education operations was $172, 59% of the national average (down from 79% and 44th ranked in 2006).

Source: Illinois State University College of Education Center for Higher Education and Educational Finance (Grapevine) (http://www.coe.ilstu.edu/grapevine)

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Source: U.S. Department of Commerce, Bureau of Economic Analysis (News Release, March 26, 2008)

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12) RI Personal Income is above the U.S. average. Rhode Island mean personal income in 2006 was $37,523 (102% of U.S. average), ranking RI 17th. In part, this is related to high incomes in Connecticut ($50,762 — #1) and Massachusetts ($46,299 — #3); approximately 1 in 7 residents of Rhode Island work in these two states.

13) RI's Research % of Higher Ed is below average.

Research expenditures (2006, figure 10) can not be strictly compared to higher education operational expenses (2008, figure 11), but their ratio does provide a reasonable approximation of the relative importance of research within the higher education budget of each state. RI's ratio of 2006 research operations as a percentage of 2008 higher education operations, ~11%, is 77% of the national average, up considerably (33rd) from RI's last place 3 years ago: will this continue under projected URI budget cuts?

Source: See figures 10 and 11

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Source: See figures 10 and 12.

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14) We Spend Little Personal Income on Research. Although relatively well off individually, collectively we spend little of our 17th place per capital personal income on university research. Our ratio of $.51 spent on university research per $1000 of personal income was 43% of the national average ($1.19), earning RI a 46th place ranking for 2006; again, is even this poor showing sustainable given projected cuts to URI?