More Tax Dollars for College ― Or Prepare Students to Succeed There?

Oregon voters are being asked this November to authorize spending more tax dollars to help some students afford an arguably unaffordable higher education. Measure 86 will create a permanent fund to subsidize certain students, which can be financed several ways including through state general obligation bonds. Any bonds issued under the so-called Oregon Opportunity Initiative will have to be paid off over 30 years, primarily by income tax payers, not by students. Only the earnings on bond proceeds and other funds will be available for subsidies.

There are several problems with this proposal:

First, Measure 86 does nothing to reduce the overall cost of higher education in Oregon. In fact, it actually could increase those costs as more taxpayer dollars flow into the system.

Second, even if the measure does help some students afford college, we don’t know if they will be prepared to succeed there, or if they will need costly and time-consuming remedial courses to learn what they should have learned in high school.

Our educational leaders in Salem anticipated the need to prepare students better for college years ago, and they took steps that they hoped would address the issue. In 2007 the state Board of Education adopted The Oregon Diploma, which was intended to ensure that students are prepared to enroll in postsecondary education without the need for remedial courses.

The Oregon Diploma “…requirements are designed to better prepare each student for success in college, work, and citizenship. To earn a diploma, students will need to successfully complete the credit requirements, demonstrate proficiency in the Essential Skills, and meet the personalized learning requirements…A phase-in schedule (2007 – 2014) has been created to allow students, families, schools and teachers to adequately prepare to meet these new requirements.”

Apparently assuming that The Oregon Diploma would get all students college-ready by 2014, Governor John Kitzhaber recommended, and the Legislature adopted in 2011, what has come to be known as Oregon’s 40-40-20 educational attainment goal. By 2025, this state policy aims for 40 percent of Oregonians to have a four-year baccalaureate degree or higher, 40 percent to have an associate’s degree or certificate in a skilled occupation, and the remaining 20 percent to have at least a “college and career-ready” high school diploma or its equivalent.

So, how are we doing in getting to that 40-40-20 goal by 2025? Three national reports issued over the last two months raise serious questions as to whether most Oregon high school graduates are coming anywhere close to being “college and career-ready.”

First we learned that only 30 percent of Oregon’s 2014 high school graduates are deemed “college ready” based on their American College Testing Organization (ACT) college admissions examinations in all four tested subjects of English, Reading, Math, and Science.

Then, a U.S. Chamber of Commerce report revealed that “Oregon is one of the very worst states when it comes to preparing students for college and the work force.” It noted that “Oregon ranks in the bottom 10 when it comes to getting students ready for college and careers.” We earned a grade of “D” in Academic Achievement and an “F” in Postsecondary and Workforce Readiness.

Finally, we found out that only 46 percent of Oregon public high school students who took the SAT college entrance tests scored high enough to demonstrate that they are prepared for college.

So, it looks like Oregon has struck out three times when it comes to meeting The Oregon Diploma goal of better preparing each student for “success in college, work, and citizenship” by 2014. We have eleven more years to see if the Governor’s 40-40-20 goal pans out, but it isn’t looking good so far.

Before we encourage more taxpayer spending on higher education through Measure 86, shouldn’t we find ways for our public school system to prepare most college-bound students to actually succeed there?

As I’ve noted before, that won’t take more money, because research shows that spending more money doesn’t lead to better educational outcomes; it just rewards the adults who get paid by the system. Instead, we should take the top-down control away from bureaucrats in Salem and give it to parents and students through a genuine system of school choice. Then watch our college readiness numbers climb. Otherwise, we’re just paying twice for remedial courses to teach college students what they should have learned in high school.

Removing the need for those remedial courses could help more students than Measure 86 ever would, and it should help Oregon taxpayers by reducing the cost and the time it takes to educate college students.

Steve Buckstein is Founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

Testimony on Measure 86 to Portland Community College Board

The following testimony was presented to the Portland Community College Board at their meeting on September 18, 2014.  The Board then voted 5 to 2 in favor of a Resolution giving their support to the Oregon Opportunity Initiative, Measure 86 on the November ballot.

Testimony before the Portland Community College Board in Opposition to the Oregon Opportunity Initiative (Measure 86):

Good evening, Chair Palm and members of the Board. My name is Steve Buckstein. I’m Senior Policy Analyst and founder of Cascade Policy Institute, a public policy research organization based in Portland.
I urge you to reject this Resolution for the following reasons:

First, you have no assurance that any funds generated by the Opportunity Initiative won’t simply replace funds the legislature already allocates to higher education. Plus, there’s no assurance that one community college student will benefit. Decisions about what, if any, funding will benefit specific students will be left to some unnamed public body, subject to the same lobbying efforts the legislature faces now.

Second, even if the Opportunity Initiative helps some students in the short run, it will make the whole system less affordable in the long run. Such third-party payments from states and the federal government are a big part of the reason that college costs and student debt are rising rapidly.

I’m sure you work hard to keep student prices under control. But, to the extent that Measure 86 puts more taxpayer money in student pockets, it will take some pressure off you to do so.

Third, I’m not sure voters understand that even if the Treasurer’s optimistic investment assumptions for Measure 86 work out, income taxpayers will be on the hook to repay all the principal and interest on any bonds issued by the state for decades into the future.

Before asking taxpayers to repay those bonds for the next thirty years, you might consider how technology is beginning to reduce higher education costs.

One Oregonian who recognizes the power of the coming technological revolution is the chief sponsor of the Oregon Opportunity Initiative himself, Treasurer Wheeler. Last October in a public meeting, he criticized the university system for being…

“…very slow to adapt the opportunities around technology.” He said that “there’s a lot of institutional inertia in the university system just as there is in Salem. And, all of these new technologies have opened up new windows to learning that do not require a student to even be in the same state.” He noted that online programs such as iTunes University on his own smartphone “don’t cost…a cent” and are a “game changer” that “undercut the entire economic model of the university system as it currently exists today.” *

So, if technology will put downward pressure on college costs, why saddle Oregon taxpayers with perhaps one hundred million dollars or more in debt over the next 30 years to fund the current high-cost model?

Finally, based on recent ACT test scores, only 30 percent of Oregon’s high school graduates are competent enough at English, reading, math and science to pass freshman college classes. Before you encourage more spending on higher education, shouldn’t we find ways for our public school system to prepare most college-bound students to actually succeed there? Otherwise, we’re just paying twice for remedial courses to teach college students what they should have learned in high school.

Wouldn’t you rather see every new PCC student ready for college-level courses, rather than dump more of your limited budget into teaching them what they should already know?

In conclusion, whatever the value of a college degree is to an individual, it’s becoming clear that Opportunity Initiative state funding of those degrees is likely to cost taxpayers more than they gain. I urge you to reject the Oregon Opportunity Initiative.

Thank you.

* Ted Wheeler, Washington County Public Affairs Forum, October 28, 2013.
59-second answer: youtube.com/watch?v=ZMPMtmEyieg.
Entire hour-long presentation with Q&A: youtube.com/watch?v=l1hYXGA3CLA.
Relevant question starts at 52:16.

Cascade Policy Institute Encourages a ‘No’ Vote on Measure 86

The Board of Directors for the Cascade Policy Institute recently voted to oppose Measure 86, known as the Oregon Opportunity Initiative, on November’s ballot.

Measure 86 would require the creation of a Permanent Fund for Post-Secondary Education, which can be funded a number of ways, including by the state selling general obligation bonds. Earnings on the Fund can be used to subsidize certain students, but it will be taxpayers who are saddled with paying off any bonds for 30 years, with interest.

Further, only 30 percent of Oregon’s 2014 high school graduates showed readiness for college, based on ACT college admissions tests.

“We shouldn’t spend more money on higher education until our public school system prepares most college-bound students to actually succeed there,” said Cascade Founder and Senior Policy Analyst Steve Buckstein. “Otherwise, we’re just paying twice for remedial courses to teach college students what they should have learned in high school.”

Measure 86 is based on what one researcher calls “one of America’s most durable myths…that the more people who graduate from college, the more the economy will grow.” However, Richard Vedder, author of the book “Going Broke by Degree: Why College Costs Too Much,” notes that conclusion may depend on how those educations are paid for. He found statistical evidence that states which provide more higher education funding actually have slightly lower economic growth rates than states which provide less.

“Individuals know their needs better than politicians do, so leaving the money in private hands produces better results,” said Buckstein.

Finally, even the chief sponsor of Measure 86, State Treasurer Ted Wheeler,  criticized the university system for being slow to adapt to new opportunities in technology which can make education cheaper and easier for students*.

“As technology drives down higher education costs, why saddle Oregon taxpayers with perhaps $100 million or more in debt for the next 30 years to subsidize the old, high-cost economic model? The answer is we shouldn’t,” said Buckstein.

* Video of Treasurer Wheeler’s statement is online at:
youtube.com/watch?v=ZMPMtmEyieg

Don’t Pay Twice for Public Education

Last week, the American College Testing organization (ACT) released the results of its national college admissions examination consisting of tests in English, Reading, Math, and Science. Thirty-six percent of Oregon’s 2014 high school graduates took the tests. Only 30 percent of those students scored high enough to be ready for college in all four subject areas.

One conclusion we might draw from these findings is that we shouldn’t spend more money on our higher education system until we can honestly say that our K-12 system is preparing most college-bound students to actually succeed there. Otherwise, we’re just paying twice for remedial courses to teach college students what they should have learned in high school.

This is yet another reason for voters to reject Measure 86 on the November ballot. It will encourage state legislators to borrow perhaps $100 million or more to subsidize certain student higher education costs. Before we saddle taxpayers with such debt, let’s fix our K-12 system. That won’t take more money, because research shows that spending more money doesn’t lead to better educational outcomes; it just rewards the adults who get paid by the system.

Instead, we should take the top-down control away from bureaucrats in Salem and give it to parents and students through a genuine system of school choice. Then watch our college readiness numbers climb.


Steve Buckstein is founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.