Is a deep recession a good time to raise taxes?
University faculty in North Carolina seem to think so. The North Carolina chapter of the American Association of University Professors (NCAAUP) is lobbying the state House of Representatives for “progressive tax hikes” to cope with the current fiscal crisis.
But one gets a funny feeling that the chief goal is to shift the pain of the recession from their shoulders to others.’
On May 30, the NCAAUP leadership sent a letter to legislators saying that they are “deeply concerned” about the cuts. A short version of the letter can be found here. Then, on June 3, it sent out a frantic-sounding plea for its members to contact legislators themselves, salting that letter with two commentaries from N.C. State professors. One English professor wrote, “We’re maxed out. We’ve compressed curriculum requirements, maximized class sizes, created online course materials to avoid making photocopies, reduced administrative overhead, consolidated our phone lines. We’ve done everything short of subletting our classrooms and parking spaces.”
The event that prompted the NCAAUP’s flurry of letter-writing activity is the state House’s initial version of the budget for the next two years, presented in late May. The legislators called for an 11 percent cut for the fiscal year that starts in July, and 14 percent for the following year. The letter, with Maureen McCaughey, professor of women’s students at Appalachian State and president of the chapter as the lead signatory, calls the proposed cuts “devastating” because they will lower the quality of education and prolong the recession. “Please don’t take the opportunity of education away from our citizens,” it says.
The group recommends “a mix of progressive tax hikes along with spending cuts.” Progressive taxes are income taxes in which people with higher income pay a higher percentage of their income in taxes than do those with less. North Carolina’s income tax is progressive now; presumably the NCAAUP wants it to be more so.
To justify the call for higher taxes, the faculty group refers to a report by the Center for Economic Policy Research (CEPR), a Washington, D.C., advocacy group that recommends a third federal stimulus package. (The idea seems to be that if two massive expenditure plans totaling nearly $2 trillion don’t work, keep trying.)
The AAUP group did not tell legislators specifically what report it is alluding to. But one CEPR paper, “The State and Local Drag on the Stimulus,” does include Keynesian scenarios suggesting that state budget cuts will reduce the stimulative effect of the American Recovery and Reinvestment Act. These scenarios suggest that tax increases will also put a drag on the stimulus, but by a smaller amount.
However, that is a single study from an organization committed to government expansion. Most economists—Keynesian or otherwise—do not recommend tax hikes during a recession, and even CEPR’s proposal is tepid. The progressive tax increases of 1931 are often considered to be one of the major forces prolonging the Great Depression. Do we want to try this again?
Lest anyone think that North Carolina’s faculty are unwilling to share the load, the NCAAUP letter says that they do not expect to be “exempted from hard choices.” Faculty, the letter says, are already working “with fewer resources” as “critical programs, which took 25 years to carefully build, are being gutted.”
As far as I can tell, however, few critical programs have been gutted. There are hundreds of centers, institutes, and programs in the UNC system. The House Appropriations Subcommittee on Education is considering trimming back about 120 of them, by 10 or 20 per cent, and abolishing one or two.
And many of these centers do not appear to be all that critical to the central missions of the university system. (One is the Center on Poverty Work, and Opportunity at UNC-Chapel Hill’s law school, which was originally created to be a launching pad for John Edward’s 2008 presidential election run). If they are only being cut by a small amount, it is doubtful that actually critical programs, such as mathematics departments, have been “gutted.”
We do not know whether each university is wielding its knife as intelligently as it should, but the recession is an opportunity to reconsider priorities, and that’s what should be done. State appropriations for the universities have been rising steadily in recent years and waste has inevitably crept in. The Pope Center has made some specific recommendations.
To build their case, the NCAAUP argues that its faculty members are working as hard as they can. “Despite perceptions that faculty have a light work load, rigorous national studies consistently show faculty working an average 55-hour week,” the letter says, and they expect to work even more.
The “rigorous national studies” were not identified. When I asked Martha McCaughey, chapter president, to identify them, she declined. “The studies of professors’ work loads should be pretty easy to find—I assume someone at your organization can get those for you,” she wrote.
I thought that was a little haughty, but in any case, I did what she recommended and have concluded that the “rigorous national studies” are those like the Department of Education’s December 2005 report, “Background Characteristics, Work Activities, and Compensation of Instructional Faculty and Staff: Fall 2003.” The workload estimates in this study are self-reported measures made through Web and telephone surveys. They are not objective descriptions of time spent on teaching or other academic activities, and they are almost guaranteed to overstate the amount of work performed by a considerable margin.
Indeed, Laura Vanderkam, writing in the Wall Street Journal says that claims of hours worked based on such surveys are bogus. But even if we were to accept the 55-hours-per week claim, the faculty neglected to mention in their letter that most professors only teach eight months of the year. It would be really pushing the limits of believability to suggest that they keep working at that same pace when school is not in session. Most workers in America would be thrilled to have their schedule.
So, in the midst of a severe recession, the NCAAUP is asking the legislature to shift more of the burden to taxpayers. The House of Representatives is leaning toward a different approach, however. An appropriations subcommittee has proposed an 8 per cent increase in tuition.
The faculty group didn’t mention that option. Undoubtedly, they would say that they want to protect the students from higher costs. But if the faculty are really working their fingers to the bone and providing the best education possible in a state where government support of education is far above average, perhaps students should be willing to pay more. After all, they are the direct beneficiaries of the faculty’s services.
If the students are not willing to pay more, then should the North Carolina taxpayer shoulder the additional burden? It’s a fair question.
All in all, it would appear that the NCAAUP leaders are not so much interested in the overall welfare of the state but are behaving just like any other special interest group.