Prior to the pandemic, the Washtenaw Community College Board of Trustees considered an expensive problem. WCC planned to do a major renovation to the Morris Lawrence Building, the Student Center Building and build the “Advanced Transportation Center.” All that construction was going to require some cash. The plan to pay for it involved shifting higher education costs to students.
Even though Washtenaw Community College has mechanisms to lower the cost of campus construction, the Board of Trustees routinely and deliberately chooses to pay for capital projects with operational dollars. They do this in two ways. First, they authorize construction projects that do not qualify for full matching dollars from the State of Michigan. By not maximizing State of Michigan dollars, the Trustees retain a high percentage of the cost of capital projects.
To cover the added cost of non-qualifying projects, the Trustees issue revenue-backed bonds instead of tax-backed bonds. Tax-backed bond issues require the Trustees to seek voter approval. Tax-backed bonds shift the debt to the taxpayers. Because the debt is distributed to all taxpayers, the overall per-payer cost is negligible. If voters approve the millage, revenue to the college will increase. Tax-backed bonds represent an investment (by the community) in education.
However, the Trustees can also issue revenue backed bonds without asking permission from anyone but themselves. Revenue-backed bonds do not raise taxes. Instead, they consume general fund dollars, leaving less money to pay for genuine operating expenses. Alternately, the Board of Trustees could raise the cost of tuition to offset the loss to the general fund. This strategy represents a disinvestment in education because it shifts higher education costs to students.
Low- and middle-income students can’t support higher education cost increases
Since the Great Recession, states have regularly shifted higher education to students. Between 2008 and 2018, the cost of college tuition increased by 31% in Michigan. During the same time, tuition at WCC increased by 35%. In 2007, WCC opened the Health and Fitness Center. Tuition was $67 per credit hour. Five years later, WCC’s in-district tuition was $89 per credit hour.
In case it’s not clear, the Trustees disinvested in education for Washtenaw County’s low- and middle income residents to fund a health club with no academic value.
The danger of shifting higher education costs goes beyond simply raising student tuition. When Trustees shift the cost of construction projects to students, or strip money out of the general fund, they disinvest in higher education. Students who cannot sustain repeated tuition and fee increases either drop out or don’t enroll. WCC’s own enrollment figures support this. Very simply, when tuition costs rise, enrollment drops.
When the administration uses the General Fund for debt service, it leaves less money to develop new programs. Fewer new programs make the college less responsive to local economic needs. It eliminates the opportunity to support capital investments by area employers. It increases the wealth gap between low-income and high-income households in the county. That leads to a greater imbalance in the distribution of resources and wealth. It keeps poor people poor.
And for what?
So some overpaid college executives can enjoy a heavily subsidized “stealth club” that quietly loses millions of educational dollars every year?
Photo Credit: COD Newsroom , via Flickr