New TBED Ideas Surfacing: Will They Endure?

Policymakers and practitioners continually seek new ideas to integrate into their overall TBED strategies in order to capitalize on innovative approaches and remain a competitive force in the global marketplace. Over the last few months, two new concepts in TBED aimed at supporting higher education have surfaced in New York and Wisconsin with two distinct goals: achieving the status of a world-renowned research capital and increasing college graduates to raise per capita income.

 

NY Considers $3B for Research, Star Faculty, Education Zones

In New York, Gov. Eliot Spitzer will consider a multi-billion investment in the State University of New York (SUNY) and the City University of New York (CUNY) intended to boost the state’s higher education system and enhance university research centers.

 

The New York State Commission on Higher Education – created by the governor earlier this year – released this week a preliminary report that calls for establishing a $3 billion research fund and hiring additional full-time faculty and eminent scholars. Additionally, the report endorses a compact for public higher education to address revenue constraints and the creation of “education partnership zones.”

 

Operating on the notion that outstanding research universities are crucial to New York’s future, the report urges significant investments in SUNY and CUNY to raise their status as world-class institutions. To that end, the commission recommends creating an Empire State Innovation Fund, providing $3 billion over 10 years to support research in physical sciences, biosciences, engineering and medicine. To lead the research efforts, commissioners call for the recruitment of 250 eminent scholars.

 

Because SUNY and CUNY have endured several years of under-funding, they have fallen far behind peer institutions in the amount of operating revenue per student, resulting in hiring less expensive adjunct and part-time faculty, the report states. Over the next five years, the commission recommends hiring 2,000 additional full-time faculty members.

 

In terms of financing higher education, the commission supports a Compact for Public Higher Education that would set differential tuition pricing. Under the compact, the state would commit to provide tax-levy funding that covers 100 percent of the systems’ mandatory costs and at least 20 percent of the costs associated with the master plan investment program. Other funding sources would come from private funds, restructuring existing base budgets, enrollment growth and “modest” tuition increases.

 

The education partnership zones proposal would target high-need districts to increase the number of college graduates and focus on math and science preparation through partnerships between higher education and middle and high schools.

 

While the total cost of implementing the plan has yet to be released, the price tag is likely to pose a problem for the state financially. The New York State Budget Office recently released a report projecting a $4.3 billion budget gap in fiscal year 2008-09 and a $6.2 billion deficit in FY 2009-10 (see the Dec. 5, 2007 issue of the Digest). Gov. Spitzer is expected to unveil his budget recommendations to the legislature in January.

 

TIFS for Human Capital Proposed in Wisconsin

Last month, Competitive Wisconsin (CWI), a non-partisan consortium of agricultural, business, education and labor leaders that promotes public policy in the state, released a strategic plan that calls for the creation of a funding mechanism to increase the number of college graduates. The “human TIF” method is similar to the concept of real estate tax incremental financing and would link higher education investment to income growth benefiting individuals and Wisconsin, according to CWI.

 

In the human TIF model, described by CWI Vice President John Torinus, the state would issue bonds for grants and student loans, which would be paid off by collecting sales and income tax when the graduate enters the workforce. The graduate would benefit in a reduction of student loans with every Wisconsin income tax return filed, providing further incentive to remain in the state after graduation, according to Torinus.

 

The report, A Competitive Mandate for Wisconsin, proposes growing the economy through strategic investment budgeting with a greater focus on recruiting high-wage earners to the state and increasing the number of college graduates, effectively moving away from traditional economic development strategies. Specifically, the mandate calls for an additional 170,000 college graduates by 2012.

 

Torinus endorses the human TIF model to help the state meet this goal and calls on lawmakers to draft legislation supporting the funding plan. In an editorial for the Milwaukee Sentinel Journal, Torinus said the human TIF plan could also propel Gov. Jim Doyle’s Wisconsin Covenant into action. The covenant provides loans and subsidies for high school graduates who have maintained a B grade average. However, the plan has met resistance in the legislature because financing for the plan is unclear, Torinus said.

 

The human TIF model could also target disciplines most needed in the state’s economy, such as engineering, science, math and entrepreneurship studies, Torinus added. He proposes that students within these majors be given priority through larger grants or accelerated grant reduction.