Should higher education lead the charge against the initiative to remove the sales tax from food?
The State Board of Regents faces that question Friday when the 16-member governing board receives a report from Higher Education Commissioner Wm. Rolfe Kerr on how the food-tax removal could hurt Utah's nine colleges and universities.Last month, just one day after Lt. Gov. Val Oveson announced that the initiative to remove the food tax had enough signatures to be placed on November's ballot, the regents learned that the food-tax removal would probably take its biggest bite out of higher education. Chairman Doug Foxley warned his fellow regents that the rollback on the food tax "would have a significant impact on higher education."
But no one knew just how significant. So the regents asked the commissioner and his staff to analyze the removal's effect and to report back at their meeting Friday at Weber State College.
The report is ready, and the regents won't like what they're going to hear.
The estimated loss from the food-tax removal to the general fund, which is composed mainly of sales and use taxes, is about $90 million. Higher education's share of that loss would be $33 million.
However, the commissioner's report says, preliminary indications are that the continued growth in the economy could reduce that amount to $13 to $17 million. Those figures sound less alarming, but they don't tell the whole story.
The tremendous enrollment growth that has swelled the public education classrooms is moving into higher education. Just to stay even with the conservative enrollment projections of 2,400 new students in 1991-92, unavoidable cost increases and needed program investments, higher education needs at least $30 million in increased revenue.
So the real impact could be $43 million to $47 million for higher education to stay even, the commissioner's report says.
How does the report suggest that possible reduction translates into options if no additional money is found to make up the losses?
One is that the regents could ignore cost increases, thus requiring the colleges and universities to further cut their programs. In addition, they could hold enrollments down and also ignore the increasing number of students wanting to attend college. At least 6,000 students would be denied access to college fall quarter 1991, with an accompanying reduction of 230 faculty and 270 staff.
Or the board could provide minimal cost increases and balance that with deeper enrollment cuts. To cover a $15 million loss, for example, higher education would have to deny access to 9,600 students and eliminate 460 faculty and 540 staff.
Or the regents could make up a $15 million revenue loss by tuition increases. Students already burdened after years of rising tuition bills would see a whopping 29 percent increase.
Or they could decide on a course of action using elements from each scenario.
The last seems the most likely proposition for the regents to embrace if they are faced with a revenue loss.
But that is background for the question of the moment: Should they lead the charge against the food-tax removal?
The projections make it obvious that higher education has an important stake in the outcome, but is higher education ready for another battle at the polls to save its scarce dollars? Will public education, which doesn't have the same worries this time, form a much-needed alliance to fight the initiative? Will horror stories about students knocking on closed admission doors be believable a second time around? What will be the message about higher education if it vigorously fights the tax removal but the public votes for it?
There are no easy answers. The regents may be in an even tougher position this time around.