Michigan Higher Education: Facts and Fiction

The observed shrinkage in state appropriations over the first half of the decade was actually a positive development: one that dampened, albeit modestly, the real relative economic decline of the state. Moreover, it calls into question a growth strategy based on expansion of higher education. Indeed, other results included in the econometric estimation suggest that a better growth strategy would be to put the entire Michigan state government on a diet in order to finance a reduction in the overall tax burden. While higher education expenditures are not growth-inducing, the evidence shows that tax reductions are.
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Contents

• Introduction
• State University Revenues and Spending: 2000 to 2004
• Table 1: Higher Education Revenues
• Table 2: Higher Education Spending
• State Appropriations for Higher Education and Economic Growth
• Table 3: Modeling the Factors Influencing State Economic Growth
• Michigan and Other State-Specific Evidence
• Conclusions
• About the Authors
• Endnotes