Sunday, June 15, 2014

What Does 'As Far As Practicable' Mean Anyway?

Where does UNC get its funding?
 prac·ti·ca·ble  [prak-ti-kuh-buhl] adjective
1. capable of being done, effected, or put into practice, with the available means; feasible: a practicable solution.
This one word in the North Carolina Constitution is always brought up when the issue of higher education is discussed and the method and means of how to pay for it are considered.

Article IX, Section 9 of the North Carolina Constitution which was rewritten and clarified in 1971 reads as follows:

'Benefits of public institutions of higher education.
The General Assembly shall provide that the benefits of The University of North Carolina and other public institutions of higher education, as far as practicable, be extended to the people of the State free of expense'

That is not the only place in North Carolina constitutional history where the word 'practicable' is used. In the 1868 version, there also reads this:

'As soon as practicable after the adoption of this Constitution, the General Assembly shall establish and maintain, in conjunction with the University, a Department of Agriculture, of Mechanics, of Mining and of Normal Instruction'

Notice which words accompany 'practicable' in both cases: 'as far as' and 'as soon as'.

Neither clause conveys the sense of 'absolute' or 'now', do they?

Both clauses convey the sense of 'if at all possible' or 'when it is possible', do these things.

Proponents of freezing in-state tuition in North Carolina often seem to misunderstand or mis-read these clauses. They would have you believe that the Founders of the North Carolina Constitution 'demanded' that in-state tuition would 'always be free'.

Nothing could be further from the truth. They knew that money did not fall from the long-leaf pine tree indigenous to North Carolina like pine cones or pine needles.

They knew there would come a time when there would be more than one student, Hinton James who walked all the way to Chapel Hill from Wilmington to enter the first class in 1795. Or at least they should have known.

It was far easier to teach one student at Chapel Hill and give him a 'free' education in 1795 than it is today for the 18,430 undergrads who are there, 15,112 of which come from within North Carolina state borders.

All that being said, what does that have to do with anything?

It has to do with everything that is going on in the North Carolina state legislature right now and at the Board of Governors of the entire system and the Board of Trustees at every state institution. In-state tuitions have risen a lot in the last several years and there has been a hue and cry to freeze them or at least decelerate the rate of growth in future increases.

This is all done in the vacuum bracketed by the 'as far as practicable' clause of the state constitution and the pressing fiscal budget realities of 2014, not 1795 or 1868.

Let's get some of the basics out of the way that you never read in the papers or hear on the evening news:
  1. It costs, on average, roughly $21,000/year to teach every undergrad in the UNC System, from Elizabeth City State University to Western Carolina.
  2. For 2010-11, the latest year for official figures, in-state students in the UNC system paid 33% of the cost of their degrees on average which includes all the tuition and fees they pay.
  3. The percent ranged from 19% at UNC School of the Arts to 43% at App State.
  4. That means that the in-state tuition of roughly $8000 at UNC-Chapel Hill and NC State leaves about $13,000 per year to be covered by other sources.
  5. The University of North Carolina at Chapel Hill receives about 20% of their funding from the state legislature which means the balance comes from sources including federal and state research contracts and grants, hospital-generated revenues, athletics, and private funding from endowments and annual gifts. 
We can remember a time when the state legislature was able to fund 39% of the entire university budget in the 1980's.

What has happened since then to cause the shift?

For one thing, academic cost-inflation has been second only to health care cost inflation during that time span. University presidents and administrators embarked on a massive spending, building and investment spree since 1980 that could rival the arms race between the US and the now-defunct Soviet Union.

Some of that can be attributed to the massive influx of the Baby Boomer 'echo' generation (our sons and daughters) entering our nation's colleges and universities. However, the peak of that boomlet entering college was in 2010. It is downhill from now on and many colleges will see declining enrollments and many will be forced to close.

The main culprit, however, as we have noted before is the unabated growth of state Medicaid programs. Medicaid is an 'entitlement'. University education is not an entitlement. Medicaid bills have to be paid every year in cold hard cash by the states or else they have to declare bankruptcy much as Detroit had to declare bankruptcy. States do not have to pay for higher educational support each year as they do in Medicaid.

That is the choice most states have to make nowadays: fund higher education or pay for more Medicaid services. It is pretty much that simple.

We believe moving to Managed Care Organizations (MCOs) for Medicaid is the prudent and responsible way to not only provide better health care at a lower cost for our fellow Medicaid-eligible North Carolinians but also to lance the boil on limited funding for our state's higher education institutions.

You want to see more funding for UNC, NC State and other universities in the state system? You should be for MCOs as well.

And while we are at it, perhaps we should amend the NC Constitution while we are at it to use a more modern word than 'practicable'. No one ever uses that word anymore, do they?

The new clause should read:

'The General Assembly shall provide that the benefits of The University of North Carolina and other public institutions of higher education be extended to the people of the State at an in-state tuition rate that is no more than 90% of the in-state tuition rate in Virginia ($13,400+/year in 2014-15) or South Carolina ($11,000) adjusted for inflation each academic year.'

The University of North Carolina at Chapel Hill and NC State and the other universities in the system would still be a 'better value' than either of our neighbors to the north and the south. In-state tuition to UNC will be about $8200 for the 2014-15 academic year and about $8000 for NC State. Both are about a 38% discount to UVA and 27% discount to USC.

The new clause would be a more 'practical' realization of the immutable laws of economics and political reality nowadays.

Not 'practicable'.

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