States across the country, including Illinois, are struggling to meet prison, public assistance, pension, and Medicaid expenses. That is understandable. These state expenditures present immediate challenges. However, if states continue to divert money to these government assistance programs, what we have is the classic strategy of those in a hole who grabs the shovel and dig. Illinois needs to focus on strategies that create true return on investment (ROI) that will lift the state to prosperity: accelerating programs that raise per capita income and tax revenues while reducing demands for programs that only deepen dependency on limited state tax dollars.
So what might such an investment strategy look like? Well, Illinois has set a goal to ensure that 60% of the adult workforce will have a quality college credential by 2025. What if 60% of Illinois’ adult citizens had a college degree today? What would be the ROI? At the IBHE we have done that analysis. Based on current data documenting increases in salary levels if 60% of Illinois adults were to hold a college credential, a conservative estimate would be that there could be more than $600 million annually in additional tax revenue for the state to invest. A second scenario assuming that degrees were distributed across graduate, bachelor’s and associate’s degree levels at our current ratio shows an almost $1 billion increase in tax revenues, annually. An investment strategy that produces $1 billion annually in additional dollars to establish economic incentives to accelerate the economy, further drive educational attainment, and meet the needs of low-income undereducated Illinoisans.
If Illinois had invested in higher education over the last decade to reach this goal today a virtuous cycle would have resulted in an upward spiral to prosperity. Instead, Illinois’ education system has been financially eviscerated. In 1997, Illinois provided seven out of every ten dollars of the cost to educate a student at a public university and, because community colleges are also supported by local property taxes, three out of every ten dollars in cost for a community college degree. Then the state budget displayed an understanding that public support was appropriate for a public good that drove our economy and civic health. In 2012, Illinois provided only four dollars of every ten required to provide a university degree. State support for community colleges was cut almost in half. These state funding decreases basically privatized higher education in Illinois with tuition and fees now accounting for more than half of the source of operating funds for public colleges and universities. For those concerned about student debt, understand that the primary reason for student debt is state disinvestment in public higher education.
It is, in fact, about ROI. I am sympathetic to legislators who call higher education a “black hole” where money is invested and produces no direct account of outcomes. But that narrative must be changed in Illinois. Higher education needs to draw a brighter line between investment and outcomes. Illinois institutions of higher education need to do a better job demonstrating clearly how they are doing everything they can internally to increase productivity and contain costs for students. However, colleges and universities cannot rely solely on efficiency measures to help the state reach the 60% goal. It will take state investment tied to clear expectations for ROI.
Based on statewide planning, the higher education blueprint, the Illinois Public Agenda for College and Career Success, supports goals to reduce college completion gaps for first generation, low income, and students of color (our gaps have widened over the last five years); to increasing affordability for middle and low income students, families and taxpayers (Illinois, over the last five years has been among the worst states in declines in affordability), and create better pathways to increase the number of undereducated adults returning to college to complete a postsecondary credential or degree (without them, the 60% goal cannot be reached). Higher education leaders, in strong cooperation with elected officials, and policy makers must work to match reinvestment in higher education with specific improvements in these areas that are crucial to Illinois’ future. If, with investment, more Illinoisans do not succeed educationally, then the higher education system will be held accountable. However, if the completions rates progress in an upward trend, then investments should increase significantly. It is that simple. And the ROI for that investment will be significant. There is a strong and positive correlation across the country with lower Medicaid, criminal justice, unemployment, and public assistance costs and higher percentages of the population with a college credential. A more educated population is healthier, less engaged with the criminal justice system, more productive, and has higher wages. It is a no brainer.
The finish line has changed. A high school degree by itself is no more than a ticket to working poor status in this economy. It is a college credential that is the new finish line, the new producer of ROI for a state. Illinois must find a way to balance immediate demands on its resources with investments in the future. It is our choice. Many states, post-recession, are reinvesting in higher education knowing the payoff. California, for example, just created a $50 million “innovation fund” to reward implementation of initiatives to meet state goals of increasing degree production. What will Illinois do? Keep digging or invest?