To Save Public Higher Education, Defang Public Sector Unions

In the New York Times last week, David Leonhardt denounced “the assault on colleges—and the American Dream” by state legislatures across the country that are gradually reducing their investments in public higher education. These cuts, Leonhardt says, undermine social mobility by forcing state colleges to pass over low-income students and enroll less economically diverse freshman classes. While there are reasonable objections to the way colleges spend the money they do have, the trend Leonhardt describes is indeed a cause for concern.

But why do public university budgets keep getting the ax? It’s not (at least not primarily) about the selfishness of wealthy taxpayers. The real answer is more inconvenient for the Democratic coalition: Namely, that exploding public pension costs are putting tremendous pressure on state budgets, and higher education is the softest political target for the belt-tightening needed to make up for it. So argue Daniel DiSalvo and Jeffrey Kucik, political science professors at the City University of New York, in a new Manhattan Institute report that they summarize at U.S. News:

The common assumption is that higher education cuts are just another consequence of states tightening belts in the wake of the Great Recession. But a closer look at the health of state finances tells a different story. State government tax revenues now exceed pre-recession levels and spending in almost every budget category has grown since 2008. Unfortunately, higher education is not following the same pattern. America’s public colleges and universities enjoy the dubious distinction of being the only major budget category in which states are cutting back.

In a new report, we show just how far higher education has dropped down states’ priority lists. Spending on hospitals, policing and public welfare are all up by at least 10 percent. The most notable increases are on public employee pensions, which grew the fastest in terms of total liabilities and expenditures. In short, pensions are crowding out higher education.

So long as public sector unions have a powerful grip on state legislatures, and so long as they can extract inviolable pension commitments (and paper over the magnitude of these promises by assuming unrealistic rates of return) discretionary programs without guaranteed funding carveouts will continue to be squeezed. You won’t hear many progressive activists making this case, but the single best avenue for ensuring that public colleges are fully funded is to roll back collective bargaining rights for unionized public employees so that pension obligations can be put on a sustainable path.

Or at least, you won’t hear many progressive activists making this case anytime soon.

But in the long-run, the contradiction between state-level Democrats’ loyalty to public sector unions and their desire to expand social welfare programs of various kinds will become increasingly hard to conceal. When the fiscal vise tightens enough, we may see new coalitions start to form.