Wednesday, June 22, 2016

 

The Politics of Parity


New Jersey has some quirks, like the ban on pumping your own gas, but this one requires a bit of explanation.

Back in the 1970’s, the state Supreme Court ruled that the state Constitution obligated the state to provide extra aid to some low-income school districts, in order to help compensate for the relative lack of a local tax base.  The idea was that kids should have access to good schools, no matter whether their town is wealthy or struggling.  In NJ, most school funding comes from property taxes, so the funding available is largely a function of the “ratables” in a given district.  Cities suffer, due to high population density.  County seats suffer, because towns can’t tax county buildings.  Suburbs with lots of commercial development prosper, because malls take up a lot of land, pay a lot of tax, and generate no schoolchildren.  Over time, the differences grow, because heavily taxed properties are in less demand than less taxed properties.

NJ has the highest state-level population density in the country.  It’s even higher than Japan’s.  When you fund services based on real property, and you have the highest people-per-acre ratio in the country, you will have the highest property taxes in the country.  Which it does.

So as far as K-12 goes, resentment at high property taxes for local schools is compounded, in many suburbs, by resentment of taxes on top of those going to subsidize low-income districts.  Race, income, party, and geography intersect in ways that wouldn’t surprise any competent sociologist.

Governor Christie has proposed ignoring the state Supreme Court and resetting state aid for K-12 to a flat dollar figure per student (plus an allotment for students in special education).  In other words, he’s proposing replacing a progressive system with a (mostly) flat one.  

The stated reason is that many low-income districts continue to get disappointing results, even with extra help.  The political math, I assume, is that the number of voters who stand to see a tax cut is far greater than the number of voters who would directly feel the loss of aid.  

My point isn’t to get into the relative merits of the proposal.  It’s to notice that the funding dynamics for higher education are almost perfectly opposite.  

In higher education, higher subsidy levels go to the colleges with the most affluent students.  Here, aid is directly regressive.  Rutgers -- the flagship university -- gets far more money per student than, say, any community college in the state.  The more selective and upper-middle-class the student body, the more direct support it gets.  In higher education, direct per-student parity would be more progressive than what we have now.  Significantly more, in fact.

It’s an odd contrast, and one for which I’ve never heard a principled argument.

The argument between equality -- the same funding for everyone -- and equity -- bring everyone to the same level -- is classic, and of long standing.  That’s essentially the battle being fought at the K-12 level.  

But for higher ed, it’s simply accepted as a matter of course that the wealthiest students get the most help.  Either equity or equality would be a dramatic improvement.  Here, regressive funding is taken as normal and natural.

Even arguing that higher education is a “private good” -- a stand with which I fundamentally disagree -- wouldn’t solve the question.  If it’s a private good, that’s an argument for less aid generally.  But it isn’t an argument for aid to be regressive, no matter the absolute level.

The comparison isn’t entirely clean, of course.  K-12 funding is substantially local, done at the level of a town.  Community colleges get county-level funding, which typically involves many different towns.  (NJ has over 650 municipalities, which is probably a density record in itself.  It has 19 community colleges.)  Four-year state colleges, and the state university, are funded by the state.  The incentives at each level of government are somewhat different.  Local voters are attuned to their property values, which are more closely tied to the school district than to the county college.  

But those caveats don’t change the basic question.

Why is it that we have no problem assuming the equality-vs-equity battle stations for K-12, while accepting catastrophic levels of regressive distribution in higher ed?  Why would per-student parity be a conservative position for K-12, but a wildly liberal position for higher ed?  

This isn’t unique to New Jersey, but that’s sort of the point.  Why do we assume that equality and equity matter at one level, but not at the other?
 

Comments:
Flagship U is perceived as creating more value. To the extent that it's more expensive to run a research university, the costs may be justified. But it's hard to measure the actual value of either research or education so in the end it's really all about prestige, and Flagship U definitely has more prestige.
 
What Morgan Price said above in the first sentence is generally accepted as true, except that the value it is creating is a private rather than public good if you buy the argument being made about K-12 funding. Indeed, my state wants to cut the funding of a university if too many students take jobs outside the state after they graduate, because those students are walking away with that private good.

The problem with accountability is that the legislature refuses to admit that they are funding research by making that part of professor's pay and benefits a line item. It would be more honest if there was a state per-student fund for lower division classes (at universities and community colleges) and upper division classes AND research and graduate education. Instead, it is all rolled into a single category and the public thinks all of that money is going to their child's freshman comp class.

PS - I'm just making that all up. What the Flagship Universities really have is football and law schools. That is why they get more money from legislators who are, of course, both football fans and lawyers.
 
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Good argument, you didn't take it far enough.

By far the largest subsidies are granted to Harvard and Yale. The tax freedom for endowments comes to many tens of thousands of dollars per year. What is worse, if they decide to mount a $5 billion capital campaign, that amounts to a $2 billion unlegislated grant from the US government in the form of charitable deductions for donors.

Why do we allow that?
 
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