Missouri Public Higher Education: Cost or Investment?

IThe decade of the 1990s was good to public higher education in America, and consequently, to the nation’s economic health. Our colleges and universities fielded new instructional programs to meet the needs of a booming economy. We rebuilt our research infrastructure—laboratories, solid research faculty, graduate programs—and expanded our knowledge base at an unbelievable rate.

Advances in technology led to the creation of integrated information systems that enabled us to store and analyze incredible amounts of information. Research universities and private enterprise formed partnerships to capitalize on scientific discoveries and bring new ideas to market.

As a result of the nation’s struggling economy, however, the momentum we generated in the 1990s is in danger of being lost. Nowhere is this truer than in Missouri, where the fiscal picture has been eroded by tax reductions and declining state revenues.

Mandated federal and state programs are claiming a larger share of the state budget. The burgeoning prison population costs more to maintain. Other programs, such as highways and social services, are strapped for funds. Tax collections are not expected to recover significantly in the foreseeable future. It all adds up to less funding for the few discretionary programs, like public higher education, that have no dedicated revenue stream.

Missouri officials have consequently been forced to make some tough choices in order to keep the state’s budget in balance, and public higher education has been particularly hard hit. Thirty-six percent or $286 million of the state’s budget shortfall in Fiscal Year 2002 was made up by withholding appropriations from higher education. To produce a balanced budget for Fiscal Year 2003, which began July 1st, state officials cut the recurring higher education appropriation by 10 percent.

In the wake of these budget actions, I believe Missouri’s colleges and universities have done a good job of managing their limited resources by resorting to many of the same tools familiar to corporate America. If anything, we may be doing too good a job. Reporters have asked me, "If things are so bad, how come public higher education seems to just keep on going without any visible sign of difficulty?"

To cut costs, the University of Missouri and other institutions are suspending or eliminating programs and reducing the number of faculty and staff. Administrative structures are being reorganized and support services are being consolidated or outsourced. Needed improvements to physical facilities have been deferred. Several institutions have dipped into reserve funds.

Efficiency measures like these will take higher education only so far, and then we must pay the long–term consequences of declining support for higher education. Our best and brightest faculty will leave for better opportunities in private industry or other universities. Plans for laboratories capable of supporting cutting edge research will sit on the shelf collecting dust. Deferred rehabilitation projects will cost more later on. Scientists won’t have access to advanced information systems capable of storing and evaluating incredible quantities of research data. In short, Missouri will be left behind because the research infrastructure will not support new initiatives.

Our state is in an economic race for the future. Missouri’s capacity to compete in a knowledge economy will determine its ability to create wealth and well-paying jobs for current and future generations. Other states recognize this and are implementing aggressive plans to support the growth of their own technology industries. If we waiver from our goals because of short-term fiscal exigencies, the race will be lost.

We hear a lot about the important role that the life science industry can play in Missouri’s, and Kansas City’s, future economy. To become a leader in the life sciences, our state must enhance the capacity of its higher education and research institutions to undertake world-class research. Research findings must be commercialized to create a critical mass of life science companies. Workers and students must be encouraged to pursue opportunities in the life science industry.

If this strategy is implemented promptly, the Battelle Institute projects that Missouri can add more than 21,000 permanent, high quality jobs in the life science industry. In the next 10 years, the Missouri region stands to gain nearly $7.2 billion in gross regional product and more than $3.9 billion in real disposable personal income. If we fail to act decisively, we will witness the exodus of technology companies and highly skilled jobs from Missouri.

It is essential that the state and our metropolitan centers make a long-term commitment to provide the resources needed to sustain an all-out effort. It begins by viewing public higher education as an investment rather than a cost.

Dr. Manuel T. Pacheco is president of the University of Missouri System. He can be reached at 573.882.2011.