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Dollars and degrees 

Arkansas is about to fix the way it distributes taxes among its 33 public colleges so they will turn out more and better-prepared graduates and thus pep up the state's moribund economy.

The money will be delivered not so much based on a school's enrollment as on factors like the share of its students who actually graduate and land good jobs. Governor Hutchinson is excited about it, the Higher Education Coordinating Board embraces it and the institutions themselves aren't fighting it.

Hutchinson says a high graduation rate (ours is about the lowest) and a larger quotient of college graduates in the population are critical to economic development. Every few months there is another, but old, key to unlocking growth. Low taxes are back again as the big key. It has been for 150 years, even when we had the lowest taxes by far of all the states, but also by far the lousiest economy. We never could get taxes quite low enough, although Gov. Marion Futrell in 1933 bankrupted the state trying.

Here is a prediction that I hope is wrong. A new formula for distributing less and less money among the colleges will be a flop, at least in meeting the goal of more graduates getting better-paying jobs.

State funding for higher education has been nearly flat for 10 years, which you might note means that it is not just a Republican phenomenon. Mike Huckabee was the last governor who had any use for colleges, at least insofar as funding them. Even then, the emphasis was on funding the public schools, as it should have been and ought to be again. Remind me to get back to that.

The state has been tinkering with funding formulas for two decades to give colleges incentives to keep more students in school until they graduate. Schools came up with mentoring programs and other tools, but nothing worked. Pressuring them by cutting their funding if they fail will not work either, although it might make them lighten up on grades and expectations.

Kids drop out for many reasons, but the big ones are 1) high tuition and living costs (we raise tuition every year because state funding adjusted for inflation actually goes down), which includes raising the lifetime debt burden each semester, and 2) students' lack of mental and emotional preparation for college. Arkansas colleges have a high remediation rate to overcome the problems. Many drop out after a year of remediation.

If you allocate funds based on graduation rates, you know which schools will fare best and which worst. The University of Arkansas at Fayetteville, which attracts students from higher incomes and with better preparation, will do well. Schools that strive for minorities and struggling youngsters, like the University of Arkansas at Pine Bluff, will get fewer dollars. Then they will do even worse on graduation. Advocates of funding reform say they might make some allowance for needy kids in a few schools.

The problem is not what colleges are doing but what is not happening in the public schools: a first-rate education for children from poor families. Arkansas has shifted from one assessment test to another trying to find one that will put our kids in a better light. We shouldn't be surprised when better-looking scores do not produce better-educated kids.

May I mention Huckabee favorably again? The governor who raised taxes and social spending more than any governor in Arkansas history presided over the final reform that was supposed to put Arkansas on the path to match schools in the rest of the country. Thanks to Huckabee's taxes, Arkansas funded its schools at a level judged to be "adequate" if not superb and the new law guaranteed that it would always be that way because schools would be funded every year at a suitable level based on what the rest of the country was doing and not on that year's tax collections. If revenues fell short, programs that were not mandated by the Arkansas Constitution would be cut, not schools. The law and the settlement reached in the Supreme Court also said the hundreds of millions of dollars in federal funds earmarked each year to lift disadvantaged children would be spent exactly that way, not on band uniforms or anything else.

Sadly, the law on both counts was almost immediately ignored. In clear violation of the law, school appropriations were based on revenue projections after each round of tax cuts, starting under Gov. Mike Beebe and continuing under Hutchinson. Programs with proven records of lifting poor kids, like pre-kindergarten education, still go unfunded.

This winter, the governor will ask an eager legislature to cut taxes even more, the better to stimulate growth. The explanation will be that throwing money at education is a waste. Any bets on how that will work?

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