LAS CRUCES – New Mexico’s system of higher education – the most decentralized in the nation – faces stark challenges that the state’s institutions must work together to overcome, according to Higher Education Secretary Barbara Damron.
It’s a tough road ahead for the state’s nearly three dozen colleges and universities, which are independently run and too dependent on state funding, Damron said at last week’s Domenici Public Policy Conference at New Mexico State University.
“No other state in the country has 32 publicly funded institutions that have a board of some type,” she said, adding that while “this is great for educational access,” it may be an obstacle in the current financial climate.
Damron said her department is developing a strategic plan, targeted for September 2017, to address the challenges.
Chief among them: State revenues are shrinking because of a steep drop in oil and gas prices, on which New Mexico’s budget leans heavily; enrollment is on the decline from a peak during the recession; and, on a national scale, perspectives are changing about what the goals of higher education should be and how much states should contribute.
Colleges and universities financed with less than 20 percent state funding have a better chance of surviving as state revenues decline, but none of New Mexico’s higher education institutions fits that bill today, Damron said, citing global strategic advisory firm Parthenon-Ernst & Young’s 2016 Education Practice report and the state’s own statistics.
In fiscal 2015, the last year for which full statistics are available, New Mexico’s two- and four-year institutions depended on state funding to cover between 20 percent and 61 percent of their budgets.
“It is concerning for me that here in our state we essentially have none that are below that 20 percent mark,” Damron said. “These institutions will not be able to sustain in this matter.”
The state’s three largest institutions by enrollment – the University of New Mexico, Central New Mexico Community College and New Mexico State University – rely on 35 percent to 40 percent state funding, according to state Department of Higher Education statistics.
Bookending the low and high ends of budget dependency are New Mexico Junior College in Hobbs at 20 percent and Tucumcari’s Mesalands Community College at 61 percent. Altogether, 21 New Mexico institutions fall in the 30 percent to 60 percent range.
Complicating the financial picture, New Mexico’s colleges and universities charge “very low” tuition compared with other states and peer institutions, Damron said. That was by design, she said, as officials decided to pour resources into higher education.
But as budget pressures intensify, Damron said, “We have a constant battle: How do we manage state revenues versus the tuition revenues? Our tuition was set low because our state has put a lot of money into education. It was set up that way with the intent of keeping tuition down. The question comes, as those state revenues decrease, is it on the backs of the students? Or what are the other revenues can we bring in?”
According to the Parthenon report, the decadeslong expansion of higher education institutions that followed World War II and continued through the technology boom of the 1990s “is over.” The analysis finds that hundreds of institutions nationwide “face critical strategic challenges because of their inefficiencies or their small size.”
The way out, according to the report and Damron’s own estimation, is collaboration and, potentially, consolidation.
“This new era of cooperation goes well beyond simple agreements between colleges to share back-office operations or cross-list academic courses that often result in good publicity and not much else,” according to the Parthenon report. “Collaboration in this new era involves colleges and universities coming together as seemingly one institution to change their future direction.”
NMSU system Chancellor and former Gov. Garrey Carruthers agrees something has to change.
“I think Secretary Damron is trying to get us in a dialogue here that is meaningful that will recognize the financial situation in the state, the declining enrollment,” Carruthers said. “We have these opportunities for improvement, and how is it that we are going to take advantage of those opportunities? What are we going to do? Because what we are doing right now is not working very well.”
Former Higher Education Secretary Jose Garcia, who served under Gov. Susana Martinez, takes a dim view of the potential for collaboration, noting that the state’s system of higher education has a “very poor governing structure” in which “boards of regents are highly dysfunctional” and “are not really beholden to the governor.”
He also points to a “pattern of high cost, low return” in administrative costs, despite New Mexico’s consistently being near the bottom of the national barrel in terms of six-year graduation rates for bachelor’s degrees.
Damron did not lay out proposals for consolidating New Mexico’s independently governed colleges, universities and branch campuses. But she cited statistics showing that the number of campuses nationwide has grown 9 percent since 2007 even as enrollment has fallen from its peak in 2010 and said, “There is potential for consolidation.”
“The market for students can no longer support the number of institutions we have today,” she said, speaking in the context of national trends.
Research has shown that students who live near community colleges are more likely to go to college, according to Ronald Gordon Ehrenberg, director of the Cornell Higher Education Research Institute.
“In a state where many of the residents are relatively poor, where they can’t go to school full time because they have to work, having a community college close by is important,” he said. “The campuses matter.”
Damron echoed that sentiment, with a caveat about the independence with which New Mexico’s institutions operate.
“We still have gazillions of square footage in our higher education institutions,” she said. “Much of that is important. Much of that needs to be there. Certain things can still best be taught in the classroom. You can barely go 40 miles in our state without having access to higher education. We have definitely addressed the issue of access.”
But she added, “We are definitely the most decentralized. Each one of those entities has a board.”
The statewide strategic planning process will focus on stronger attainment goals, capped by a target of 66 percent of New Mexico’s population having an associate degree or higher by 2030. That is almost double the current level of 35 percent and well above the national average of 40 percent, Damron said, citing Lumina Foundation statistics.
“We are definitely in an imminent era of innovation and adaptation,” she said. “The fates of universities are to be shaped by political, economic and social factors. It’s no longer just the pure beauty of looking for knowledge and science.”