Education and migration

People choose lower taxes over higher ed

By Patrick R. Gibbons
  • Tuesday, May 19, 2009

The Nevada Legislature has approved additional funding for higher education, about $300 million more than proposed by Gov. Jim Gibbons.

Already, since 2001 and before there was even talk of budget cuts, the Nevada System of Higher Education had seen its funding grow three times faster than the rate of inflation. The return on that "investment" has yet to be realized and probably never will be.

We are told that without an excellent system of taxpayer-financed higher education, we cannot attract people or jobs to our state. Without growth in the population of the well-educated, or so goes the story, we simply won't be able to grow our economy.

It may be true that some people won't move to our state because the public system of higher education is bottom-tier. But when you examine the reality in this area, the claims of the big spenders fall completely flat.

According to U.S News and World Report, California and Virginia are considered to have the best public colleges in the nation. California has three colleges in the top 10 — UC Berkeley, UC Las Angeles and UC San Diego. Virginia has two — the University of Virginia and William and Mary.

One would think that if an excellent system of public higher education were such a major draw, then people would be flocking to Virginia and to California. But that is not occurring.

Net migration data from the American Legislative Exchange Council white paper, "Rich States, Poor States," reveals that the combined net in-migration for California and Virginia from 1998-2007 was negative 1.25 million people. Nevada, by comparison, saw a net migration of 481,534. And, of course, Nevada doesn't have a single college listed among the top schools.

What about all the states with top-10 public universities? Those states include California, Virginia, Michigan, North Carolina, Georgia, Wisconsin and Illinois. Their combined net migration is negative 1.08 million.

What about the states that boast the highest number of top public colleges? States with three or more top public colleges include California, New York, Colorado, Michigan, Ohio and Virginia. Their combined total net migration is negative 3.75 million.

Even if you look at all 38 states that have colleges listed in U.S. News and World Report among the top public colleges in the nation, their combined net migration is negative 408,897. Meanwhile, the 12 states that do not have a top college have a combined net migration of 475,883.

If Nevada needs to increase taxes and spending to get a top university — in order to improve and diversify the state's economy — then why is Nevada's net migration higher, by close to a million, than the combined net migration of the 38 states with top public universities?

The lesson here is exactly the opposite of the one Nevada's big spenders regularly seek to inculcate.

As University of Ohio professor of economics Richard Vedder found, "the more states spend on higher education, the lower the growth in personal income per capita in future time periods." Dr. Vedder's research shows that there are many statistically significant negative correlations between higher education spending and economic growth. In short, states that spend a lot on higher education see lower growth.

The people have voted — with their feet — and they haven't been choosing states because of their better systems of government-run higher education. What attracts residents and grows the economy is the chance for more freedom, lower taxes and a friendlier business climate.

Unfortunately, the Nevada Legislature has chosen to follow the failed policies of dying states like California and Michigan.

Patrick R. Gibbons is an education policy analyst at the Nevada Policy Research Institute.

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