Apples to apples comparisons in higher ed funding

Critics of increased funding for higher education in North Dakota are fond of adding numbers together and creating charts that create false pictures of where money is going and then declaring, “These are the facts.” The truth is these exaggerated visuals are not the facts because critics are not comparing apples to apples.

 One-time funding is not the same as ongoing funding

Because of the booming economy in North Dakota and the resulting positive position of the state’s finances, the Governor and Legislature last session approved generous one-time funding for capital improvements for many state agencies. For higher education, that one-time state appropriation for capital projects was $178 million.  As a result of this appropriation, approximately $24-30 million of deferred maintenance across the System will be addressed. Numerous projects were on hold for lack of funding over the course of many years, some for decades.

Base vs One Time Appropriations Chart

Capital improvements will benefit students

For example, the current School of Medicine and Health Sciences Building at the University of North Dakota is overcrowded, inefficient and far away from the main campus. To address this issue, the new, more collaborative SMHS building is being constructed to better accommodate the enrollment growth associated with full implementation of the school’s Healthcare Workforce Initiative.

Old Main at North Dakota State College of Science – a registered historic building and community icon – was a top priority for repairs due to code and deferred maintenance issues during the 2011-2013 biennium, but was not funded until 2013-2015. After nearly 50 years of no renovations to Steven’s Hall, Williston State College was given funding in the 2011 special session to renovate the building. However, funding still fell short due to inflationary factors impacting western North Dakota projects and was unable to complete the project until more funding  was approved last session.

The rest of the one-time capital funding will go to build new facilities at our institutions that support the university system’s long-term goals for attracting and retaining students and each was also approved by the Legislature. This includes the North Dakota State University STEM (Science, Technology, Engineering, Mathematics) Classroom and Laboratory Building, which will house much needed laboratory and classroom space that will provide students with the state-of-the-art STEM technology and infrastructure needed to help them compete in the workforce.

Per student appropriation growth reflects state’s success

In 2005, North Dakota ranked near the very bottom — 44th in state appropriations per full-time equivalent student at $5,825/FTE student. By 2013, North Dakota ranked 17th in the same category at $6,561/FTE student. These appropriations support faculty and staff salaries, utility bills, supplies, materials, technology and equipment.

The change in rank is somewhat deceiving. The main reason it changed so much is because in recent years most other states have been experiencing shortfalls in their revenues and had to cut or stabilize their education budget. During the same time period, North Dakota’s economy has been booming, and it is wisely choosing to invest in education.

Educational Appropriations per FTE Change by State 08-13

Between 2008 and 2013, every state, except for Illinois, North Dakota and Wyoming, cut their educational appropriations. The United States average change was -23 percent during that time period, with New Hampshire making the most drastic decrease of 50.7 percent.

All sectors of North Dakota’s budget have grown, but the percentage allocated to higher education has gone down from a high of 22.1 percent to 13.2 percent, as the state’s growth has increased the need for funding of transportation infrastructure and human services programs, to name a few.

Preparing for the 2018 bubble

As young people fill the abundant job openings in the state, they are either bringing their families or getting married and starting families. The impact of increased enrollment is already being seen around the state as new elementary and secondary schools are springing up everywhere. In approximately four years, that increase in students will begin to impact higher education.

13-14 Number of Actual-Projected Public High School Graduates in North Dakota

The State of North Dakota and the North Dakota University System are putting plans in place to prepare financially for those future students. The adoption last session of a higher education funding formula based on student credit hours completed will help make base funding requests more predictable, and the development of a systemwide master plan will also help identify and prioritize maintenance and capital projects. With good planning and wise use of the fruits of North Dakota’s flourishing economy, our students will reap the benefits of having quality education that prepares them for good jobs close to home.

 

Extra-credit question: The funding for higher education has increased in order to:

T  Provide one-time funding for capital projects such as deferred maintenance and approved buildings.

F  Spend a lot more money to educate only a few more students.

T  Ensure that North Dakota is prepared for anticipated enrollment increases.

T  Provide programs to prepare students to fill North Dakota’s workforce needs.