“Free” Higher Education in Wisconsin: Obstacles, and Possibilities pt 1 of 3

(This is Part 1 of 3, focusing on budgetary issues regarding “free” tuition at public institutions.  Part 2 will focus on other issues not directly fiscal that affect this proposal and Part 3 will conclude with solutions to our current problematic state.  I welcome comments throughout the series but please keep in mind that I may be addressing sometime in a future post.)

Everyone loves to get something for free.  Especially if it is something that we would normally pay for.  A brand new  Ford Mustang is something that many people, if they are financially able, would purchase because, well, it’s pretty damn sweet; but what if you could get that Mustang for free?   Everyone seems to be really excited to win that brand new car or RV or trip to Timbuktu or what-have-you, but no one seems very excited to win that “brand new ottoman(!)” that they bid on in the opening competition.  Why is that?  Well, clearly the value of that Mustang is much greater than the value of that ottoman (although I’m sure it is a very nice ottoman).

Well, what if the geniuses over in Detroit decide, “Gee, the Mustang is so popular on the Price is Right, let’s make it free and then everyone can have one!”.  Well, in order to be feasible, several alternate series of events would occur.  First, Ford could continue to produce the same quality Mustang and simply lower the price tag, making the production cost vastly superior to the income it generates.  This is an unsustainable path and more funds are needed, but from what source?  They could try to sell more stock, or simply jack up prices on other cars but with a free Mustang, that wouldn’t work very well.  So then we have option two; Ford could lower the quality of the Mustang by replacing chrome and steel with plastics, the V8 engine with a V6 one, the leather interior with cloth, and the fancy gadgets with an AM/FM radio and manual windows.   Sure, it’s still technically a Ford Mustang, but it has been diluted to a point where it is not recognizable as such.

So, now that I’ve introduced this, why is it pertinent to students here at the University of Wisconsin at Madison?

Well, the answer is simple.  We are that Mustang and the State of Wisconsin is Ford Motor Corporation (without actually having to be in Detroit ;).  We are that incredibly valuable thing that people will continually pay money for because the value is universally known and respected, and of course, everyone would love to have that value for free, if they could.   However, that is unsustainable for the two reasons illustrated above: lack of funding or the lowering of quality.

To address the first reason and why it would not work, we look at our own budget and compare it to a similar one in Minnesota.  Advocates of higher education (and I am certainly one) often argue that the state puts too much funding into the Corrections system while not enough into Higher Ed and point towards Minnesota where the Corrections system is funded substantially less, with far less prisoners in the state system, and still managing to achieve virtually identical crime statistics.  But the state budget only tells part of the funding tale; what about local property taxes or county taxes?  These certainly play a substantial role in policy areas.

Here’s the secret and the downfall of the argument that Minnesota spends less on corrections and more on education: Clever Accounting. In Minnesota, the counties foot the corrections bill while the state foots education.  It’s a mix in Wisconsin.  In Minnesota, inmates with under a year on their sentence serve time in the county jails, OUTSIDE of the state system, and outside of the state’s funding, leaving the counties to tax on their own.  Wisconsin doesn’t really utilize the county jail system, instead using the state one substantially giving the illusion of higher gross state spending.

Let’s look at education; Minnesota under Jesse Venture eliminated local funding for K12 education, intending to create a new funding stream through the legislature, a new funding stream that was never passed.  This left the state high and dry footing the entire K12 education bill for the entire state.  Wisconsin still has a dual funded system where the state kicks in a good amount and the local property taxes fund the rest.  This provides districts the choice to build new facilities, etc by holding a referendum.  My hometown, which has an average income only slightly above the poverty line, voted about seven years ago to rebuild our aging high school through an increase in property taxes.  This increase in funding would not be shown at the state level but it clearly exists.

So, how does this all tie together?  Well, basically, pulling money out of corrections leaves a substantial shortfall in facilities, jobs, and would also require the repeal of Wisconsin’s Truth in Sentencing Law.  We can skim Corrections, but fleecing it would be very difficult (there is a prison in just about everyone’s district…who is going to vote to cut jobs in their own district?  Thought so…)  Additionally, it is much easier to argue that if any more money should go to education, it needs to go to K12.  UW-Madison already receives $2.4 Billion every year (granted some of that is tuition), while the entire University of Minnesota (and their Minnesota State system) receives $2.8 Billion…a pretty shocking comparison.

So in short, when we come to legislators asking for more money for the UW system (Madison in particular), to them it sounds like we are asking for more water for Lake Michigan.  While it’s no Lake Superior, it’s still pretty damn big and could probably work just fine on the water that it currently has.

-Adam

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6 Comments on ““Free” Higher Education in Wisconsin: Obstacles, and Possibilities pt 1 of 3”

  1. Brandon W. says:

    I’m looking forward to where you are going with this. Good points so far.

  2. tomtempleton says:

    Interesting points. I’m looking forward to part 2 & 3. I was actually just talking with some other student leaders who are involved with the Center for First Year Experience and they thought the idea of “free” tuition at UW was ridiculous. They went on to state how UW Madison is constantly ranked one the best values for an education and has a relatively low level of tuition. I also think you addressed this point but an interesting question came up during our conversation. The state budget is essentially composed of tax payer dollars, then a tuition free education would be entirely paid for by tax payers? Also would Wisconsin residents want to pay taxes for students from out of state or out of the country to attend UW Madison?

  3. car gadgets says:

    Your post is very interesting. Education is a sensible topic to discuss these days.

  4. TJ Madsen says:

    It would be interesting if you compared this idea to places where Higher Ed is completely free like Denmark, Norway, and Sweden… or places where it’s basically free (due to low/zero interest loans) like Finland and The Netherlands.

    Denmark pays 100% tuition, a student housing stipend, and a ~$1000 living stipend. They find that the investment pays off because of the economic opportunities an educated populous can create. The cost is payed for by taxes, but the citizens generally agree that it is a good investment for the future of the country.

    Additionally, you discuss the number of jobs that might be lost from cutting corrections funding – but don’t discuss the number of jobs that might be created by investing in higher education.

  5. Cale Plamann says:

    I’m actually completely with TJ here. I’d like to see some analysis of how the European system would work here.

    Obviously we would have to abrogate the American dream a little and triage students (if you get below a 22 on the ACT and a 3.2 GPA you get free trade school rather than free college), but at the same time student loans are out of control. As a professional student I’m spending a LOT of money (about 26k a year) in loans to pay for an education that will land me in a fairly poor job market. Of course, this 26k a year is considered one of the best deals in the country too, but I cringe a little when I see my potential 100k in debt upon graduation due to a combination of undergrad and professional loans.

    I just don’t think it’s fair to saddle students with all but insurmountable loans in exchange for letting them take a gamble at changing their position in life a little. I know students who are going to graduate law school up to 300,000 in debt (which of course can’t be discharged via bankruptcy).

    P.S. you should try looking at the transportation budget in Wisconsin too, I seem to recall DoT taking a large piece of the pie.

  6. CampusCaucus says:

    I will hold off on discussing specifics about your comments because SOME may be addressed in one of the other parts (although, I had not planned to do a Euro comparison directly, but I may have to do a Part 4 of 3 discussing that. I’m in Europe now so I can get some people’s perspectives)

    Also, @TJ, I discussed the lost jobs because no legislator will be willing to cut jobs in their district. Those new jobs will be going to other people than the ones who lost theirs so it will still be an unpopular move and that’s why I discussed it.


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