HIGHER EDUCATION PARTNERSHIP
IN THE NEWS
The Higher Education Partnership presents:
NEWS - Press Releases, Talking Points, etc.
April 13, 2001 - A Response to the 6 Issues Being Used to Misrepresent
the Universities
THE FOLLOWING ARE POINTS ON SIX
ISSUES THAT ARE BEING USED TO MISLEAD THE PUBLIC ABOUT THE UNIVERSITIES?
THE HIGHER EDUCATION PARTNERSHIP IS ENCOURAGING ALL ALABAMIANS
TO STAY TRUE TO THE MESSAGE OF EQUAL TREATMENT FOR HIGHER EDUCATION
AND K-12.
Question 1- Why University Fund Balances
are not sufficient to cover the cost of proration?
Question 2 - Why per student appropriation
comparisons are misleading?
Question 3 - Why would the teachers' union
(AEA) use $1,488,333,157 of endowments to criticize the universities?
Question 4 - Why does the teachers' union
(AEA) attack rather than explain? What about mandated salaries
and "PEEHIP?"
Question 5 - What is the truth about the
number of public universities in Alabama?
Question 6 - How can the teachers' union
(AEA) criticize the universities for having less students than
K-12?
Question 1- Why University Fund Balances are not sufficient to cover the cost of proration?
- Restricted funds cannot be used to pay operating expenses.
- While most institutions have reserves, they are not extravagant. Most could operate less than a month on reserves.
- The National Association of College and University Business Officers recommends that sound business practices be applied to the management of institutions. They further suggest that operating reserves are a characteristic of good management. National accreditation agencies also recognize the importance of reserves in best management practices. Loss of accreditation results in the loss of faculty positions, inability to attract new faculty, decreased value of diplomas. Lost accreditation puts student loans in jeopardy. Loans account for more than half of the students enrolled.
- The items characterized as fund balances include many non-liquid assets. Among the assets counted in fund balances are textbooks in libraries and fuel for fleet cars.
- The dollars that are encumbered for expenses already incurred are not available for expenditure.
- Fund balances include receivables and prepays, which are not available for operating expenses.
- The university fund balances that were reported are not
the only fund balances that exist. K-12 has school systems that
have reserves. In 2000, the City of Eufaula had $3.9 million,
Lee County had $11.4, Birmingham City had $41.9 million, Lawrence
County had $3.9 million, etc.
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Question 2 - Why per student appropriation comparisons are misleading?
- The dollars appropriated to universities and to K-12 are utilized in a predetermined manner to deliver a different set of outcomes? It costs more to educate a college student than a second grader. The costs of educating a chemist or engineer are much greater than the cost of teaching a second grader about multiplication.
- Calculations, which include restricted funds such as endowments and federal grants, cannot be used in per student appropriation comparisons because these dollars are not available to cover operating expenses.
- Research projects, which are great examples of restricted funds, are used to develop the state's economy. Without the scientific research surrounding the space station what would life be like in Huntsville? Where would the Wiregrass Region be without the developments in peanut research?
- Teaching doctors to practice medicine is the responsibility of two public institutions in Alabama. This is due to the fact that no private medical school exists in state. With a greater level of demand for public medical education comes a greater requirement for state appropriations. To compare dollars invested in professional training with dollars invested in a K-12 classroom is inequitable. Making this comparison will skew the numbers.
- The correct manner for comparing per student appropriations at K-12 schools and the universities was developed by the Southern Regional Education Board (SREB) and uses general-purpose operation appropriations.
o Erroneous Comparison
§ Universities have $22,000 in appropriations per Full Time Equivalent (FTE) Student. This figure is taken from a spreadsheet total that includes non-state funds such as restricted endowments, grants and contracts.
o Appropriate Comparison
§ The SREB reports that universities receive $4871 per FTE student that ranks Alabama 14 out of 16 southeastern states in student appropriations. The SREB figure includes all general-purpose state funds. The funds available for instruction. The SREB calculation utilizes a methodology that is generally accepted by institutional research officers across the nation. These are the appropriations that can be linked directly to instruction.
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Question 3 - Why would the teachers'
union (AEA) use $1,488,333,157 of endowments to criticize the
universities?
The Alabama Education Association is wrong to highlight endowment dollars as spendable income. $1,488,333,157 represents dollars that have been donated for restricted purposes. The dollars that are available in endowments are designated for special circumstances like research or scholarships. Yes, Alabama's universities have endowments and so do the other universities in the southeast. Endowment income is necessary for institutions to compete with their peers.
Could it be that AEA is trying to hide some facts? A recent report (2000) from the Public Affairs Research Council of Alabama showed that since the inception of the Foundation Program (K-12 funding) in 1996 that $566 million of growth has been generated, yet only 1 percent or $6 million has been used for instructional support and textbooks. Teacher unit salaries and fringe benefits have accounted for 76 percent or $465 million of this growth. Other current expenses have accounted for 15 percent or $85 million. Only, 1 percent has gone directly to the school children!
The shame of this statistic is that when the teachers' union
(AEA) worked to pass this legislation in 1995 they claimed that
the reason for the bill was to make sure the children of the
state received an adequate and equitable education. The reality
is that the Foundation Program has been used to provide more
benefits for K-12 employees, not more support for the young people.
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Question 4 - Why does the teachers' union (AEA) attack rather than explain? What about mandated salaries and "PEEHIP?"
It is the health insurance secret. Alabama's K-12 employees are the beneficiaries of the nation's best health insurance plan. In the 2002 education budget, it may seem that all of education is cut by 6.2 percent with 70 percent of the new money given to K-12 and 30 percent higher education. However, that is not the whole story. No, the truth is that the K-12 employee health insurance, known as Public Education Employee Health Insurance Plan (PEEHIP), is receiving close to $70 million dollars even in a year when there is proration. Everything else gets cut, not this benefit. The state is paying $414 per month for K-12 health insurance and the employee is paying $2 per month. What average citizen would not accept a health insurance payment of $2, $10 or even $50 per month. Health insurance should be provided for all of the state's education employees. However, the teachers' union (AEA) has structured an unreasonable health insurance plan that must be revisited. The teachers' union is asking Alabama citizens to pay for a benefit for K-12 employees that the people of Alabama cannot afford for themselves.
PEEHIP is the Alabama Education Association's major concern, not the children of the state. The union is proving, in this terrible proration crisis, that it would rather destroy higher education and hurt the school children of the state than change this insurance program. The teachers' union (AEA) has managed to set up the budget so that the mandated pay raise and the PEEHIP appropriation take first priority EVERY YEAR. No wonder the State Department of Education says the school systems are financially distressed. Someone should ask, how many of those school systems were already in distress before proration even arrived? Why are so many K-12 systems under "alert" status?
In 2000 the Alabama Education Association (AEA) pushed legislation through the Alabama legislature mandating that K-12 teachers be paid the national average in salaries. The rationale for passing the legislation was based on the belief that Alabama's K-12 schools could not compete with other states for teachers. It was argued that the teacher was the most critical component for improving the quality of education. Certainly, the importance of the teacher's contribution is not to be denied.
What was the most viable argument against mandating that K-12 teachers' salaries reach the national average? It was the funding process used for reaching the goal. The state teachers' union (AEA) convinced the legislature that this goal could be reached by committing 62.5 percent of each year's growth in education revenue to this purpose. With scarce resources available to fund education, paying for these salaries would take money from other areas of education. What happens when last year's mandated pay raise is measured against future year impact? Children in K-12 will have to go without books, supplies and technology. Universities will fall farther behind their competitors by having higher tuition and low salaries. To emphasize the disparity of this problem, the Public Affairs Research Council of Alabama in a 1999 report claims that the salaries of Alabama's K-12 teachers already rank 23rd in the nation while university faculty rank 44th.
If teachers were already well compensated, why did the bill pass? It passed because the state teacher's union (AEA) had a stranglehold on the Alabama legislature. Plus, the Siegelman Administration cut-a-deal with the K-12 teachers' union (AEA) and ignored the fact that EVERY other education support organization in the state opposed the manner in which this bill was written.
Now, with the help of the Siegelman Administration, the teachers'
union (AEA) is at it again. They are leading the charge to force
the universities to take second-class status whenever proration
occurs. In times of proration, AEA wants the state to protect
K-12 salaries and make the rest of education take the crumbs.
For a K-12 employee, this may seem admirable. For higher education,
it is even worse than it seems.
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Question 5 - What is the truth about
the number of public universities in Alabama?
Alabama has 15 very good and efficiently operated public universities. The regional average for the number of four-year state universities is 12.4. Alabama has only 2.6 more public universities because of a shortage private universities. While Alabama has 18 very good private universities, the average number of private universities throughout the Southeast is 29. Alabama is 11 private institutions short of the regional average, which explains the greater need for four-year public education.
In additon, Alabama is a poor state. The state's average per capita income is approximately 80 percent of the national average. This creates a greater dependency on public four -year education.
Moreover, Alabama's universities follow a strict guide for
course creation and implementation. Even though, they are funded
at 60 percent of the regional standard, as determined by the
Southern Regional Education Board out of Atlanta, they still
have been willing to put themselves under the microscope. The
higher education reform legislation of the mid-1990's has led
to the elimination of over 1000 university programs because they
did not meet the efficiency standards. Universities are accountable
and public higher education is the key to Alabama's economic
future.
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Question 6 - How can the teachers' union (AEA) criticize the universities for having less students than K-12?
If the state funded higher education like other states in the region, Alabama would not rank 37th in the nation in the number of citizens with college degrees.
Even more, state leaders take into account the difference
in student numbers when they appropriate 70 percent of the new
money to K-12 and 30 percent to higher education. Considering
how much more it costs to educate a person in biochemistry than
it does to teach a second grader, the funding is definitely skewed
toward K-12.
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WOULDN'T IT BE BETTER TO STOP CRITICIZING AND BEGIN LOOKING FOR WAYS TO ENCOURAGE EDUCATIONAL ADVANCEMENT AT ALL LEVELS! WOULDN'T IT BE BETTER TO TREAT ALL OF PUBLIC EDUCATION EQUALLY! ALL OF PUBLIC EDUCATION IS ESSENTIAL!
For additional information contact Gordon Stone, Higher Education
Partnership, 334-832-9911.
PO Box 761
Montgomery, AL 36101
email:causey@higheredpartners.org