State Appropriations and Enrollments: Does Enrollment Growth Still Pay?.

Most public institutions of higher education implicitly structure enrollment policy around the belief that higher enrollments mean greater state appropriations. Corollary beliefs are that if enrollments can be maintained, state appropriations will be maintained, and if enrollments decline, state appropriations will decline commensurately. These beliefs or assumptions by enrollment policy makers are based on direct observations over time, on numerous interactions with legislative committees, and on the common folklore surrounding the financing of American higher education. Here, we examine the larger question of whether such assumptions still undergird the state appropriations process, if indeed they ever did. Specifically, we pose the following questions: (1) What is the history of the fundingenrollment relationship and has it changed recently? (2) How have economic factors affected the relationship? (3) Can institutions gain large amounts of additional funding through rapid enrollment growth, particularly if a weaker funding-enrollment environment has developed? (4) Conversely, do slowly growing or declining institutions continue to face large funding cutbacks? A survey of state finance officers and pertinent national data files addressed these questions within an empirical model of the appropriations-enrollment relationship. Initially, a survey was taken of state finance officers or their surro-