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Missouri Department of Higher Ed: A Study in Government Waste

The Missouri Department of Higher Education is a prime example of bureaucratic largesse and government profligacy, a review of its budget by The College Fix finds.

While some of what it does can arguably pass muster – it submits a unified higher education budget request to state lawmakers and administers the federally and state-funded Missouri Student Loan Program –there’s plenty of room for improvement in its 2013 budget.

For example, it calls for about $786,000 to pay roughly 17 people to conduct the state’s “higher education coordination,” such as: population and enrollment trend studies; efforts to coordinate studies at the state’s universities and “encourage” the state’s system of colleges to support each other; “identify” higher education labor force needs; “cooperate” with the state’s K-12 oversight agency on education initiatives; and “coordinate” the state’s higher education plan.

So, nearly $1 million in taxpayer money on an extreme amount of “coordination, cooperation and encouragement.” Sounds like a government agency.

Meanwhile, in 2011, Missouri Auditor Tom Schweich found Department of Higher Education officials were “unaware that they were supposed to monitor the use of $134 million of stimulus money it distributed to 23 public colleges and universities in the 2010 fiscal year,” reported the St. Louis Post-Dispatch. “The agency was expected to distribute an additional $41 million of stimulus money to institutions by the end of June. The department now has contracted with an entity to act as a monitor beginning this month, the audit said.”

So, a government agency charged with overseeing a $1.2 billion annual budget has to contract with an outside firm for monitoring. Sounds about right for a bureaucracy.

Back to its 2013 budget, it itemizes about $240,000 to monitor private universities in the state, citing “consumer protection.” And now – referencing a change in state law – department officials want to increase the maximum amount of a security deposit they can require from private institutions from $25,000 to $100,000.

Meanwhile, the budget allocates $95,000 for membership dues in a “Midwestern Higher Education Compact,” a multi-state commission charged with promoting (here comes that word again) “cooperation” among colleges in the region on various levels. Ostensibly, the commission aims to save its members and students money, but with those membership dues, its bottom line is unclear.

As an aside, in 2011, the never-shy-about-spending-money state of California and its Democrat Governor Jerry Brown actually axed its California Postsecondary Education Commission, which provided analysis and recommendations to state lawmakers on higher education policy and funding priorities. Brown called the commission, which cost the state nearly $2 million a year, “ineffective.”

It should be pointed out that many of the tasks with which the California commission was charged – seek strategies for greater efficiency and cost containment in postsecondary education; encourage greater cooperation and collaboration between and among California educational systems; evaluate budget requests of state-supported colleges and universities –sound all too familiar here in Missouri.

And this year, the Missouri Department of Higher Education continues to have its needs. Yes, it’s grappled with budget cuts in the last several years – as have most public agencies. Yet its 2013 budget carved out enough money that the department can put out a newsletter. Its staffers have travel budgets. There’s also plenty of money for “professional development” and “professional services.”

Take for example its budgetary need of $155,000 for administrative expenses to dole out roughly $97 million in state-funded financial assistance programs. Yet only $114,000 of that would go to salaries. The rest would pay for items such as travel costs, professional development, and a variety of “services” and “supplies.”

Topping it off, the salary of the department’s Commissioner, Dr. David Russell, who earns more than $170,000 a year, is $20,000 more than the department’s previous commissioner, Robert Stein, and nearly $40,000 more than Missouri Governor Jay Nixon’s $133,000 salary, according to state documents.

Underscoring all this, one of the department’s main missions is to help high school students enroll in Missouri’s public higher education institutions, yet the department does so by helping students finance their education with federally funded grants and subsidized loans, that is – on the backs of taxpayers.

What’s worse, far too many college grads are left with mountains of debt and no job prospects in an apparent never-ending Great Recession.

In reality, the department’s bureaucratic largesse is self-perpetuating. The overarching goal of the department, that of directing youngsters to public universities, is well-intentioned but prone to waste and program proliferation.

Indeed the Missouri Department of Higher Education exhibits the same problems that most other departments of higher education do—namely, program redundancy, said University of Arkansas Professor of Higher Education Michael Miller in an interview with The College Fix.

For example, at the behest of the Missouri Department of Higher Education, the state offers business programs at the University of Missouri, University of Missouri-St. Louis, University of Missouri-Kansas City, Southeast Missouri State University and Missouri State University, among others. These campuses, however, are relatively close in proximity. Does every campus need one? Additionally, business programs are traditionally very expensive to operate.

With that, the Missouri Department of Higher Education, being stewards of Missouri’s tax dollars, have a responsibility to prevent program redundancy.

“Instead,” Miller said, “what typically happens is that a campus petitions to create a program claiming that it won’t cost much to add or that it fills some unique void—the result, though, is that . . . you have small, highly expensive silos.”

Economists who study human action in a capitalist system assume that all individuals are self-interested, and act according to their own self-interest. So true with bureaucratic programs, which are hard to eliminate because those who are directly affected will fight to keep their positions.

Far from being disinterested public officials, government employees become self-interested entities. Such is the case with the Missouri Department of Higher Education.

Fix contributor Christopher White is a graduate student at the University of Missouri.

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IMAGE: Rob W./Fickr

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