SHEF: State Higher Education Finance. State Effort and Capacity to Fund Higher Education, FY 2020 and 2021

Overview & Synopsis

The per-student data included in the State Higher Education Finance (SHEF) report provide useful information about revenues relative to the need to fund higher education and are important for examining the impact of funding differences on public institutions and students across states and over time. However, examining state support on a full-time equivalent (FTE) enrollment basis does not account for the varying ability of states to fund higher education and says nothing about a state's relative effort. In an effort to provide this additional context about a state's effort and ability to fund higher education, this report uses publicly available data to estimate state tax capacity and tax effort. It combines external data with SHEF data on state funding for public and private higher education to construct three indicators of state effort to fund higher education: (1) funding for higher education as a percentage of total state and local tax revenues and lottery profits; (2) funding per capita; and (3) funding per $1,000 of personal income. The information presented here is intended to provide contextual and comparative information for policymakers and researchers as they evaluate public policy decisions for higher education. The information presented in this report utilizes the most recent publicly available data, which lags the latest SHEF report data by one to two years. [For "SHEF: State Higher Education Finance, FY 2022," see ED631022. For "SHEF: State Higher Education Finance. State Effort and Capacity to Fund Higher Education: FY 2019 and 2020," see ED623744.]