Ron Knecht: It’s not ‘tuition,’ and it shouldn’t be increased soon

Two years ago, I decided to oppose all general fee hikes at our colleges and universities for the foreseeable future. With some of my fellow regents once again discussing fee hikes, I write to explain why they should be off the table.

First, a clarification about fees and tuition in Nevada. State law prohibits charging in-state undergraduate students tuition. So, we charge them fees. If that sounds to you like a dodge, I agree.

Further, a reasonable argument is that college education benefits both the student and society, so each should pay part of the cost. Nevada’s in-state fees and the cost split between taxpayers and students are both well within the mainstream for comparable U.S. institutions.

So, deciding this issue revolves greatly around trends over time of fees and related matters. The rates of growth I report below are real changes — that is, excluding inflation that meaninglessly increases them.

For the most meaningful comparison, I also give numbers in per capita terms for personal incomes of Nevada families and businesses that pay taxes to support education and other state spending and for total and non-education categories of state spending. Overall spending on education is presented on a per-student-full-time-equivalent basis; fee comparisons are based on per-student-hour postings, including recent surcharges.

University undergraduate in-state general fees rose 90 percent from fiscal year 1996 to fiscal year 2012, while those for graduate students rose 102 percent, and those for community colleges (lower division courses) rose 58 percent. However, total fee and tuition revenues rose only 40 percent, because institutional financial aid and other factors moderated the total bills to students and their families.

On the other hand, self-supporting revenues — our largest and fastest-growing source, which includes things such as room/board fees — increased 174 percent. Part of this increase comes from charges to students for items previously included in fees, tuition and state funding. Much of it also comes from new services to students and others, so there is no indication how much student charges have increased for a fixed set of services due to rising self-supporting charges.

With factors indicating that the raw changes in fees both understate and overstate the bill to students, it seems reasonable to compare the raw fee increases of 58 percent to 102 percent to changes in Nevadans’ incomes and in state spending.

State general fund (GF) K-12 spending increased 32 percent, that for health and human services rose 30 percent, and that for public safety, infrastructure and other categories rose 6 percent. But state GF spending for higher education declined 20 percent, a fact for which fee increases were designed to compensate. (Thus, higher education instruction costs are now split 65/35 between taxpayers and students, versus somewhere between 75/25 and 80/20 six years ago.)

Overall state spending increase rates hugely exceed the growth rates for the ability of Nevada families and businesses to pay the taxes for these increases and to pay increased fees. Personal income rose only 2 percent, while total state GF spending rose 23 percent!

With Nevada in-state higher education fees having risen 58 percent to 102 percent — well above the 20 percent to 32 percent rates for various categories of state GF spending and dwarfing the miniscule 2 percent growth of taxpayer and student/family incomes — there is no reasonable argument for raising fees again for the foreseeable future.

Ron Knecht is an economist, law school graduate and Nevada higher education regent; he has twice chaired the regents’ budget and finance committee.