State Higher Education Finance
Fiscal Year 2012
Summary of Analysis and Findings
Agenda

History of the SHEF Project

SHEF Metrics and Adjustments
 HECA vs. CPI

Summary of FY 2012 Findings
 National
 State-level

Additional Data / Analysis Opportunities
SHEF History

The tenth report, SHEF FY 2012, was released on March
6, 2013

SHEF builds upon Dr. Kent Halstead’s “Halstead Finance
Survey” and the corresponding data going back to 1972

Halstead ceased publishing his study in 1998. SHEEO
membership encouraged SHEEO to embark on a similar
study moving forward
SHEF History

Halstead transferred his dataset to SHEEO which became
the historical basis for SHEF

First SHEF report released in 2004 for FY 2003

SHEEO moved to an online data collection tool (SSDB) in
2010 and aligned the SHEF Survey with the Grapevine
Survey maintained by Illinois State University
What’s the Difference?
Grapevine




The first look at state
appropriations in the
current fiscal year
Typically released in
December or January
http://grapevine.illinoisstat
e.edu/
Since 1960
SHEF




A more detailed look at
state and local
appropriations, tuition
revenue, and enrollment
for the most recent
completed fiscal year
Typically released in March
http://www.sheeo.org
Since 2003, with data
going back to 1980
What SHEF does not measure

Direct tuition rate increases

SHEF measures tuition revenue over time which may
increase due to tuition rate increases, enrollment growth,
and changes in enrollment mix (e.g., more non-resident
students or more graduate students)

College Board is a better source for specific tuition rate
information
SHEF Metrics

State and Local Support

Educational Appropriations

Net Tuition Revenue

Full-Time Equivalent Enrollment (FTE)

Total Educational Revenue
Make up the
Wave Chart
SHEF Adjustments - HECA

Higher Education Cost Adjustment (HECA)



To measure inflation over time, $s adjusted to current year
SHEEO developed as an alternative to CPI and HEPI as a
means to account for the “market basket of goods” higher
education must purchase, that is, primarily personnel costs
Constructed from two existing federal indices - the Employee
Cost Index (75%) and GDP-Implicit Price Deflator (25%)
FY 2011 appropriation: $1000
Divide by corresponding HECA: $1000/0.9824
FY 2011 appropriation in FY 2012 $s: $1018
HECA vs. CPI - HECA Criticisms


HECA’s critics argue that HECA has historically grown
more quickly than CPI and therefore overstates the
amount of support institutions need in order to keep up
with inflation
A further critique is that HECA is a meaningless figure for
families struggling to pay tuition costs
CPI
HECA
HECA vs. CPI - SHEEO’s Response



Institutions of higher education primary costs are driven
by personnel expenditures which make up the bulk of the
higher education “market basket of goods.” SHEF’s intent
is to measure trends in revenue for educational delivery.
HECA is a reasonable means to compare available
revenue to necessary expenditures
Little difference between CPI and HECA since 2007, due
to flat salaries. Since 2010, CPI is growing faster than
HECA
CPI is a better measure for tuition rate increases, which
SHEF does not measure. SHEF tracks changes in net
tuition revenues
SHEF Adjustments – EMI and COLA

Enrollment Mix Index (EMI)



To adjust for differences in the mix of enrollment and costs
among types of institutions among the states
Aggregated IPEDS data
Cost of Living Adjustment (COLA)


To account for cost of living differences among the states
Derived from the 2003 Berry Index that provides a single
index for each state
State X with $1000 educational appropriation
Adjust by EMI: $1000/0.95 = $1053
Adjust by EMI and COLA: $1053/1.01 = $1043
National-level Findings

Enrollment grew 15.6% since 2007 to over
11.5 million FTE in 2012 (down slightly
from 2011)

For the third year in a row, educational
appropriations per student hit a 25-year
low and were $5,906 in 2012 (down 23.0%
since 2007)

Net tuition revenue per student continued
to increase, reaching $5,189 in 2012 (up
19.1% since 2007). It now makes up 47.0%
of total educational revenue

Tuition increases did not offset reductions
in state and local support. Total
educational revenue is down 7.9% since
2007
State-level Findings

All fifty states grew enrollment since 2007,
ranging from 4.2% growth in California to 36.2%
in Oregon

Two states, Illinois and North Dakota increased
per student educational appropriations since
2007. Illinois’ increase is due to addressing the
historic underfunding of its pension program

48 states decreased educational appropriations
per FTE

Percent of total revenue from net tuition ranges
from 13.8% in Wyoming to 85.1% in Vermont in
2012

In 36 states, total educational revenue decreased
since 2007, despite increases in net tuition
revenue
California
Nevada
Maine
Illinois
Wisconsin
Louisiana
Pennsylvania
Rhode Island
Michigan
West Virginia
North Dakota
Delaware
Oklahoma
Minnesota
Vermont
Kansas
Alabama
Kentucky
Nebraska
Connecticut
South Dakota
New York
US
Montana
Wyoming
Hawaii
Alaska
Iowa
Indiana
New Mexico
Washington
Tennessee
Massachusetts
Ohio
Virginia
North Carolina
Arizona
Missouri
South Carolina
New Jersey
New Hampshire
Arkansas
Colorado
Texas
Mississippi
Maryland
Florida
Utah
Georgia
Idaho
Oregon
Figure 5
Full-Time Equivalent (FTE) Enrollment in Public Higher Education
Percent Change by State, Fiscal 2007-2012
40%
36.2%
35%
30%
25%
20%
15.6%
15%
10%
5% 4.2%
0%
Source: State Higher Education Executive Officers
New Hampshire
Florida
Idaho
South Carolina
Arizona
Washington
Virginia
Nevada
Oregon
Pennsylvania
Tennessee
Michigan
Massachusetts
Colorado
Georgia
Alabama
Louisiana
Iowa
Minnesota
Missouri
Ohio
Utah
California
Delaware
Hawaii
US
New Mexico
New Jersey
Mississippi
Kansas
Oklahoma
Maryland
Rhode Island
Kentucky
South Dakota
Connecticut
Indiana
Arkansas
Vermont
Wisconsin
New York
North Carolina
Wyoming
Maine
Nebraska
Texas
Montana
West Virginia
Alaska
Illinois
North Dakota
Figure 6
Educational Appropriations per FTE
Percent Change by State, Fiscal 2007-2012
40%
30%
30.7%
20%
10%
0%
-10%
-20%
-30%
-23.0%
-40%
-50%
-50.7%
-60%
Note: Dollars adjusted by 2012 HECA, Cost of Living Adjustment, and Enrollment Mix Index.
Source: State Higher Education Executive Officers
Wyoming
New Mexico
California
Alaska
North Carolina
Hawaii
Illinois
Nevada
New York
Georgia
Idaho
Texas
Arkansas
Florida
Nebraska
Louisiana
Oklahoma
Washington
Wisconsin
Kentucky
US
Tennessee
Utah
Mississippi
Connecticut
North Dakota
Missouri
Kansas
Massachusetts
Maryland
Arizona
New Jersey
Montana
West Virginia
Maine
Indiana
Oregon
Iowa
Alabama
Minnesota
Ohio
Virginia
Rhode Island
South Carolina
South Dakota
Michigan
Pennsylvania
Colorado
Delaware
New Hampshire
Vermont
Figure 7
Net Tuition as a Percent of Public Higher Education Total Educational Revenue
by State, Fiscal 2012
90%
85.1%
80%
70%
60%
50%
47.0%
40%
30%
20%
13.8%
10%
0%
Note: Dollars adjusted by 2012 HECA, Cost of Living Adjustment, and Enrollment Mix.
Source: State Higher Education Executive Officers
Florida
Idaho
California
Arkansas
Nevada
Louisiana
Washington
Tennessee
Massachusetts
South Carolina
Wyoming
New Mexico
Missouri
Arizona
Ohio
Georgia
Oregon
Maryland
Hawaii
Utah
Oklahoma
US
Connecticut
North Carolina
Mississippi
Kansas
New Hampshire
New York
New Jersey
Indiana
Kentucky
Iowa
Alabama
Wisconsin
Texas
Montana
Michigan
Pennsylvania
Virginia
Alaska
Vermont
Nebraska
South Dakota
Rhode Island
Minnesota
Colorado
Maine
Delaware
West Virginia
North Dakota
Illinois
Figure 8
Total Educational Revenue per FTE
Percent Change by State, Fiscal 2007-2012
20%
15.6%
10%
0%
-10%
-7.9%
-20%
-25.9%
-30%
Note: Dollars adjusted by 2012 HECA, Cost of Living Adjustment, and Enrollment Mix; total educational revenue excludes net tuition revenue used for capital debt service.
Source: State Higher Education Executive Officers
Additional Data/Analysis Opportunities
All the tables and charts
The raw, unadjusted data
State wave charts and data
http://www.sheeo.org/shef12
SHEF in the News
CBPP Analysis

Combined SHEF, Grapevine, and College Board data to
correlate tuition rate increases with cuts in state support

Recent Deep State Higher Education Cuts may Harm
Students and the Economy for Years to Come

http://www.cbpp.org/cms/index.cfm?fa=view&id=3927
Questions?
Please use the Chat Box
Or contact Andy Carlson:
acarlson@sheeo.org or 303-541-1607