How Much Does a State University Have to Cost?

Every state has a state university system, although that was not always the case. (New York didn’t begin the SUNY system until after World War II, a fact that did not impede the state’s growth and prosperity.) Looking at the financing of those university systems, however, you find great differences in the degree to which they depend on government appropriations. Some states rely heavily on state funding, whereas others have chosen to constrict the money pipeline from the state capital to the universities and depend more on voluntary support.

I was interested in knowing just where North Carolina stands, so the Pope Center did an analysis of the financial data for each state found in the 2004 Almanac Issue of The Chronicle of Higher Education.

The analysis divided state higher education appropriations into total spending on the state’s higher education system, including four- and two-year institutions.

For North Carolina, the resulting figure is 48.3 percent. Of all the money spent by public colleges and universities, more than 48 percent came from the state.

Where does that put us? Sixth highest in the nation, just behind Alaska (50.2 percent) and just ahead of Connecticut (46.3 percent). No one has ever doubted that North Carolina runs one of the most heavily subsidized higher education systems, and this calculation confirms it.

What’s most interesting is to see the extent to which some other states have managed to reduce dependence upon taxes for their higher education systems. In Virginia, government funding accounts for just 30 percent of the expenditures; in South Carolina, it’s the same. In Michigan, the figure is 26 percent. Colorado is slightly above and Oregon slightly below 22 percent. Strangely enough, the nation’s least government-dependent higher education system is in Vermont – 18 percent. (Nevada has the most government-dependent system – 66 percent.)

Is it a good thing or a bad thing for state universities to get their financial support from sources other than the taxpayers? In North Carolina, we frequently hear it said that ours is “the people’s university,” by individuals who want to make it seem virtuous that a high proportion of the funding comes from the state. To some minds, money that has been taken from taxpayers is “pure” while money from tuition charges is “an unfair burden” and money from voluntary donors is “corrupting.”

I see things quite differently. Students – the people who will or at least may benefit from their studies – are more fairly called upon to bear the cost than are other citizens, many of whom receive at best a tenuous and indirect benefit from the state’s higher ed system, and are also much less wealthy than are the families who enroll their children in Chapel Hill, State, ECU, and the other schools.

As to outside voluntary support, there is no reason to think that even the largest individual donor is so important that the university is going to become a subsidiary thereof, with no more autonomy than, say, Buick has from General Motors. The most obvious reason why not is that if a university allowed itself to become a puppet of one donor, it would put at risk its relationship with many others.

The virtue I see in voluntary funding for state university systems is that it is far easier for an individual supporter – a student, an alumnus, a business, or a charitable foundation – to say “no more” and stop giving support if the university should act in unacceptable ways than it is for taxpayers to get politicians to cut university appropriations. If a UNC alum is upset over, say, summer reading choices or curriculum changes, all he has to do is not to write a check. That is infinitely easier than getting in touch with his representatives in the General Assembly and trying to convince them that the UNC budget should be reduced.

States that have moved furthest away from the socialist model of higher education, where government is the “single-payer” (to borrow terminology that medical care socialists find appealing) have made a good move. I would maintain, in fact, that you are closer to having a “people’s university” where individuals can directly choose to support it if they think that its benefits are worth the money, than where elected officials decide how much tax money to allocate.

Let us hope that the next president of the UNC system chooses to take us in that direction.

George Leef ( is the executive director of the John W. Pope Center for Higher Education Policy in Raleigh.