Public education depends on state revenues as a major source of funding. Most states, and certainly Washington state, are experiencing tremendously reduced revenues from various taxes because these are largely based on personal income and personal spending. Washington has no income tax but its other taxes that go to support the general fund are impacted by the general state of the economy. The University of Washington has already taken several budget cuts and now faces yet more, and more radical cuts at that.
The state is rapidly losing its ability to fund higher education and with that we are witnessing extreme cost cutting measures along with raising tuition rates for students. The university has to respond to the crisis as best it can, one hopes without sacrificing quality. But how they go about it is critical.
The responses we choose to make today depend critically on what we believe about the future. If we believe that this recession condition with its severe joblessness is temporary, if relatively long-lived, and that one day we will get back to the prior growth-oriented economy, then we will take actions that are meant to relieve short-term stress. On the other hand, if we believe (as I think we should) that the real contraction in the economy is going to continue for a very long time until some bottom equilibrium is reached, then we should choose quite different responses.
My argument for why we should believe that the real (not the financial Ponzi scheme) economy is in for very long-term contraction is based on the contraction of net energy that is already underway. The energy return on energy invested (extracting and processing) in fossil fuels has already declined to a point where the net energy available to the economy to do real work is diminishing. It takes energy to do real work and it takes real work to produce real assets (as well as truly useful services). Less energy available means less work gets done and a slower rate of asset production means that the money and financial assets are less and less tied to the real economy. There is a declining base in real assets so asset-backed financial instruments are becoming increasingly worthless even while the dollar denominated value seems to be increasing.
Fossil fuels supply 80-90% of the OECD economy and something like 40% of the still (but not for long) growing Chindia economies. Alternative, renewable, energy sources supply a miniscule percentage of energy for industrial countries. The scale of difference is so great that one cannot form any logical argument for the later to replace the former in any time soon enough to avoid some major contraction. See some of my prior posts in the Biophysical Economics category for much more background on this conundrum. The end result is that we are guaranteed to be in what will amount to a permanent economic contraction for many generations to come. Short of some miracle in energy production, like cold fusion, there is simply no evidence that we can become so efficient in our use of energy to compensate sufficiently for this decline in availability without major pains.
Public universities are likely to experience exceptional pain due to their being stuck with funding models based on political considerations. But I suspect there is another factor that will cause public higher education severe pain. And that is the seeming inability of education institutions to actually anticipate the coming changes and plan in advance for proactive responses rather than mere reactive ones as we have been seeing. Educators and education administrators are among the most conservative people in the world when it comes to changing their own organizations. This was actually a positive attribute in days gone by. Universities are supposed to be pillars of society. They are supposed to be stable. But the problem comes from being an institution embedded in a social milieu where radical and unprecedented change is taking place.
For the first time in human history we face a completely new kind of problem. From mankind's origins to very recently we have always enjoyed increasing energy accessibility and flows. From the domestication of fire to the present exploitation of extremely high powered fossil fuels, we have always been on the up-side of energy growth. And that is what enabled the growth of all world economies on average. But now the world is turning 180 on us. We have depleted a fixed finite resource to the point where it is so expensive to extract that we just can't support growth any more. Growth is over.
Moreover, we are going into decline. We are going to experience a wholly different world than we have grown used to. And, naturally, a majority of people, even educators, will not want to believe it nor reflect on the implications without something truly dramatic happening.
The educators and administrators I have interacted with, for the most part, still seem to believe that this economic situtation will eventually turn around and we will get back to "normal" one day. Thus the response will be to offload some number of staff and junior faculty. They will turn to hiring temporary lecturers to fill out more classes and cross their fingers that quality will not degrade. They will strive to maintain degree and sports programs that are interesting but not necessarily contributing to a society that is experiencing economic contraction. I say this even as a champion of liberal studies. But some of the programs I refer to are so-called professional degrees that are fundamentally based on assumptions of business as usual. Interestingly some of these same programs have recently started using the term "sustainable" in their rhetoric as if that will be enough to convince others that they are doing something to address what amounts to a nebulous sense that something is different in our world. They just don't yet understand how enormously different it is.
I suspect that public higher education institutions, for the most part, will choose to react with typical "fixes" to adjust their shrinking budgets under the belief that things will get better one day. We just need to hold on. The problem is that those responses will not adapt the institutions for permanent decline scenarios. What is required is planning for complete restructuring of the delivery of higher education (this may apply to K-12 as well). That plan will have to be managed carefully as the economy continues to contract.
But it is essential to society that we find a way to keep higher education alive and reasonably well. Our university institutions are the minds of society. If they fail to adapt to the impending decline properly they will implode and public education will be decimated. I would expect that there will be other forms of education that will arise Phoenix-like from the ashes. But there will be huge losses of knowledge and real assets in the meantime. Wish us luck.