Two Ideas for Enhancing Efficiency, Productivity in Higher Education

Memorandum June 29, 2016

1401 N. Lincoln Blvd. | Oklahoma City, OK 73104 | 405.602.1667 | ocpathink.org

Two Ideas for Enhancing Efficiency, Productivity in Higher Education Contrary to the claims of many higher education officials, Oklahoma taxpayers and their elected representatives are not stingy when it comes to subsidizing higher education. “Despite Oklahomans’ relatively low incomes, the state spends handsomely on higher education,” writes economist Byron Schlomach, director of state policy for the 1889 Institute. “On average, states devote 8.1 percent of their state and local spending to higher education. Oklahoma devotes 10.4 percent of its spending to higher education. While states spend an average of about 1.6 percent of their GSP on higher education, Oklahoma spends 1.9 percent of its GSP on higher education.”¹ Before extracting more money from taxpayers and students, higher education officials should work to maximize efficiency and productivity. Here are two recommendations.

1. Reduce non-teaching overhead. We know from Census data that the non-instructional workforce in Oklahoma’s higher education system (as a percent of the private-sector workforce) is a startling 61 percent higher than the national average. It is the 4th highest level in the country. What’s worse, the rate of growth is higher than the national average. To get back to the national average, Oklahoma’s higher education system would have to shed 12,033 non-instructional workers—to 19,701 workers from the current level of 31,734 workers. This would result in total annual savings, on average, of $328,226,106 in wages and salaries² —in addition to the millions of dollars in supplemental benefits that would be saved.

Per 100 Private Sector Workers

Total Number of Higher Education Non-Instructional Workers Per 100 Private-Sector Workers (Full- and Part-Time) Calendar Years 1992 to 2014

Calendar Year

Sources: U.S. Department of Commerce: Bureau of Economic Analysis and Census Bureau; Oklahoma Council of Public Affairs

2. Require professors to teach more. Survey data tell us that 82% of Oklahomans believe that “public colleges and universities in Oklahoma could be run more efficiently.”³ A full 79% believe that “professors should be paid based on how much they teach and not based on writing articles and other non-teaching activities.”⁴ Richard A. Burpee, a retired Air Force general who served as a vice president at the University of Central Oklahoma, once suggested that “we need to take a hard look at how much teaching professors actually do.”⁵ After all, it is not fair to require ever-increasing tuition payments while students are taught by teaching assistants. We should demand that more professors follow the example of the late University of Oklahoma historian J. Rufus Fears, who taught large numbers of students.

Economist Richard Vedder, who helps compile the annual college rankings for Forbes, is co-author of a 2014 report on Oklahoma’s public universities. The report concluded that a small proportion of the teaching faculty at OU and OSU seems to do most of the work: “Large numbers of faculty carry modest teaching loads, yet also have modest research accomplishments.

If the bottom 80 percent of the faculty taught as much as the top 20 percent, universities could operate with demonstrably fewer faculty members.” The annual savings to taxpayers would be $181 million.⁶

1

Byron Schlomach, “Oklahoma’s Misbegotten Education Priorities,” OCPA Perspective, August 2016.

2

J. Scott Moody and Wendy Warcholik, “To Control Runaway Costs in Higher Education, Oklahoma Must Pare Down Non-Instructional Workers,” OCPA Perspective, August 2016. This number is an average and includes full- and part-time workers—so this number is based on a proportional reduction in force between the two. Savings could be higher or lower depending on if more were cut from full- or part-time positions.

3

Madison Grady, “Oklahomans overwhelmingly believe public colleges and universities could run more efficiently, chancellor is overpaid,” SoonerPoll.com, February 23, 2016. The scientific study of 410 likely Oklahoma voters (margin of error ± 4.84%) also found that 80.1% of respondents believe the chancellor of higher education’s $411,000 annual compensation is too high, while 2.5% said it was too low and 9.6% said it was about right.

4

Ibid.

5

Wesley Burt, “Oklahoma Voters in Favor of Making Changes to Higher Education Administration,” SoonerPoll.com “Statewide” (March 7, 2011), http:// soonerpoll.com/oklahoma-voters-in-favor-of-making-changes-to-higher-education-administration/.

6

Richard Vedder and Anthony Hennen, “Dollars and Sense: Assessing Oklahoma’s Public Universities,” Oklahoma Council of Public Affairs, September 2014.