Despite real growth in total appropriations of state tax funds for postsecondary operating expenses, state investment in higher education has substantially declined in recent years relative to changes in enrollment, state wealth, and the growth of institutional budgets. What factors are associated with state investment in higher education over time? In this paper, we report the results of a longitudinal analysis of factors associated with state funding effort for higher education. Using a panel data set and a fixed-effects analysis that we conducted on the drivers of state appropriations to higher education from 1984 to 2004, we find that population, postsecondary enrollment patterns, and economic conditions affect funding levels. Our analysis also points, however, to political influences shaping public choice. Notably, we find strong empirical evidence that partisanship, legislative professionalism, term limits, interest groups, and gubernatorial power influence appropriations levels. Less than a decade ago, the evidence for these kinds of relationships was tenuous; today, the empirical record has accumulated in support of the claim that politics “matters” in helping shape public choice for higher education. We explore some of the implications of these relationships, both for scholarship and for policy making in the states.


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pp. 686-713
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