Many state legislatures continue to struggle with their annual budgets due to shortfalls in revenue. For example, on May 18 Kentucky's Community and Technical College System (KCTCS) announced that 506 positions had been cut: 191 faculty and 315 staff. These cuts were due to a $26 million shortfall, a combination of declining enrollment and ten years of budget cuts from state government that has amounted to an additional $39 million reduction in funds.
 
While most divisions of a state's bureaucracy could use some belt-tightening, this many positions being cut in one year has some Kentucky leaders concerned for the institutions affected-and the state's economy as a whole.
 
In the May 18 edition of the Lexington Herald Leader, Marcia Roth, chairwoman of the KCTCS Board of Regents, noted that students who go to community colleges "are the future economic engine of the state." So how can state universities, colleges, and community/technical colleges weather these annual budget storms more effectively going forward?
 
Three words: Return On Investment (ROI), particularly in the area of strengthening the state's economy.
 
For all the criticisms legislators in both major parties face from the public and various constituency groups, they are oftentimes a quite practical lot. If a school can demonstrate in serious, quantifiable terms the ROI the state's economy derives from the legislature's investment, then legislators will be much less likely to kill the goose that is laying the state's golden eggs.
 
Take a look at how the Oklahoma State Regents for Higher Education puts their system's economic development contributions on their website.
 
Economic Impact of the Higher Education System of Oklahoma
 
According to a 2013 report from the Battelle Technology Partnership Practice, the estimated return on investment for Oklahoma public higher education is $4.72 for every $1 of state funding. The report also shows that the expenditures of the Oklahoma public higher education system generate $9.2 billion in economic output impacts in the state and support more than 85,000 Oklahoma jobs.
 
Now that is some serious ROI for legislators in Oklahoma to ponder. The summary and the full, detailed report is clearly articulated and backed up by a credible study. Such a report demonstrates to policy makers and the public that supporting higher education is not merely a noble concept or a popular institution with a regional alumni base-it is also a vital, even indispensable partner for the economic progress of a state's economy.
 
All public higher education institutions across the country can only improve their chances at budget time if they can demonstrate their commitment to bringing life to their state's economy, in whatever ways are appropriate, given their mission and programs.
 
Moreover, when public institutions demonstrate their regional or statewide economic impact, they can increase their opportunities to secure private sector funding, too. In these times, diversifying one's funding mix and decreasing the institution's dependence on the public sector is a wiser approach to sustainable revenue for nonprofits, large and small.
 
 
by Stephen Reed