Tennessee vs. New York: A Tale of Tuition Reimbursement Programs – Being Libertarian

The fight for free college (A.K.A the state subsidization of post-graduate education) has now come to the forefront of the 50 political battlegrounds known as state legislatures.

In 2017 alone two major states, Tennessee and New York, have passed into law their own version of tuition subsidization and they greatly vary in degree of their merits and fiscal responsibility.

Many libertarians will immediately shun the idea of supporting any such programs on principal alone. Yet, for practical reasons, we must come to terms with the shifting political climate in favor of such education policy, in order to make sure the most fiscally prudent and least government expansionist programs are adopted.

In other words, we must push for the states of America to act as Tennessee has and not as New York.

Lets start with the bad. First up will, of course, be New York. The Empire State will have a state budget deficit (this year, 2017) of approximately $3.5 billion. This new program is estimated to rack up an additional $163 million to the deficit per annum; which can of course only be funded through either more borrowing or more taxes, neither of which are highly palatable to libertarians.

The state is also being generous beyond its capacity (how easy is it to act in such a way when its not your own money) and making this program applicable to not only local community colleges or technical schools but also prestigious New York State universities; which flipping the bill for will only bloat the costs.

After all, the $163 million cost estimate was only a low-ball estimate (as some lawmakers pointed out), who knows to what level of fiscal incompetency the program could actually rise. But knowing New York, Id say its chances for failure are pretty high.

To be fair, the state places one major restriction on its tuition subsidization program by limiting it to middle class families.

Yet even this does very little in the means of restraint. By 2019, the program will apply to students in families with household incomes up to $120,000, yet the average median income in the state sits at nearly half that at $60,850. This means the limitations to the middle class are really nothing more than a marketing gimmick aimed at persuading the public that the program has fiscal restraint, where in actuality there is little to none.

Yet not all hope for stopping the further fiscal deterioration of the United States is lost. Some states, like Tennessee, are satisfying the popular demand for tuition subsidization without breaking the bank and with only marginal expansions to the state.

The tuition subsidization program recently made law in Tennessee would apply to all citizens who meet the requirements, none of which are income/needs based.

On the surface this may sound like open season for an explosion of new government spending, yet in reality the program is fiscally prudent.

This prudence is made clear through the program only being applicable to state community colleges and technical schools, institutions that already have sizably lower tuition rates than almost all state universities.

Its estimated to cost approximately $10 million per year.

Now, when adjusted for population size, the New York plan would actually cost less per-citizen than the Tennessee plan (assuming the costs of the New York plan dont skyrocket, which is highly unlikely) that is not what is actually important to take into consideration here however, the way the plans are paid for is.

In the New York plan, funding for the program would come out of the general fund of the state. Money allocated to it would not be limited except if capped by the state legislature (which seeing as New York State is a bastion of economic progressivism is highly unlikely).

Yet, the Tennessee plan specifically mandates that the new program be paid for via the proceeds of the state lottery fund, which is good for two reasons:

First, it will place a tangible cap; no more money could be allocated to the program (under current law) than is taken in by the state lottery.

Second, the program would neither increase state taxes nor create the need for more state borrowing.

A program that neither increases taxes or balloons borrowing, and has strict restraints on its applicability, is a program that, at least for all practical purposes, should be supported by conservatives, libertarians, and general government skeptics alike.

The fact is, as long as we live under a system of constitutional republican democracy, the desires of the general populace must be taken into consideration at some point and eventually addressed.

Right now the people want state subsidized tuition and it looks like (as of now) they are increasingly getting it.

Libertarians can either kick, scream, and dig in their heels at the unjustness and immorality of the system and be sidelined, as progressives push more and more New York style plans across the nation; or they can engage in pragmatic politics by supporting and advocating for a Tennessee style tuition subsidization program in states where such application of a program is viable.

This post was written by Bric Butler.

The views expressed here belong to the author and do not necessarily reflect our views and opinions.

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Tennessee vs. New York: A Tale of Tuition Reimbursement Programs - Being Libertarian