Four states, Alabama, Mississippi, New York and Texas, are currently involved in litigation charging alleged discrimination in state appropriations to public universities with substantial enrollments of minority students. Two of the actions , those in Alabama and Mississippi, include the United States as plaintiff.

Higher education, with few exceptions, has traditionally been within the purview of the individual states. The Alabama and Mississippi findings, however, demand that the affected states respond to directives from the federal level. Whether the court proceedings are viewed as justified or unjustified , they are especially significant and are likely to play a role in the direction higher education takes as it moves into the next century; both in the precedents set by the remedies found for each of the cases and by the function of the federal government in state higher education policies.

Alabama

In late December 1991, a federal district court judge, ruling on United States v. State of Alabama, et. al., found the state and its senior institutions in violation of the Fourteenth Amendment and Title VI of the civil Rights Act, that is, that the state had not yet desegregated the system. Alabama was directed to alter its appropriation formula to give greater weight for undergraduate remedial courses, an alteration that, among others, will be to the advantage of Alabama State University (ASU) and Alabama Agricultural & Mechanical University at Huntsville (A&M), the two historically African American institutions in the state. Further, the court found that the physical plants at ASU and A&M were not comparable to those of the other universities in the state and directed approximately $10 million to each school to remedy the situation. The method of funding the additional expenses has not been determined.

Mississippi

The U.S. Supreme Court ruled on United States v. Fordice in June 1992. In a nearly unanimous decision the Court found that Mississippi had not done enough under the Equal Protection Clause of the Constitution to desegregate its public universities. In the findings, the Supreme Court objected to the differing admissions standards and funding practices for Mississippi's universities. The case is now in the Federal District Court in Oxford awaiting remedies which,will be proposed by state legislators, the Governor and the Mississsippi Institutions of Higher Learning.

New York

The New York charges, filed by a group of faculty, staff and students from the City University of New York (CUNY) in February 1992, allege unequal state appropriations between the CUNY system, which has a minority population of 64%, and the State University of New York (SUNY) system, which has 13% non-white students. This litigation is still in an early stage

Texas

In November 1991, a State District judge in Texas found in the League of United Latin American Citizens v. Richards that the residents of forty-one border counties were not being provided with equal access to first-class universities. In the ruling made public in January 1992, the Judge determined that the state constitution had been violated and prohibited the state~s higher education system from applying present and future appropriations to public institutions. He further prohibited the state from financing any permanent improvements in the system until a solution has been reached. The injunction is stayed until May 1993 to allow for appeals.

Ramifications

The ramifications of the litigation in the four states does not stop at their various borders. Rather, there are potentially far reaching results for higher education on a national level.

First, how do states address current or potential charges of unequal appropriations across higher education systems? One solution is to provide more funds for higher education state-wide so that all schools will receive as much as the most highly funded institution in the system. Another is to merge or close schools so that there is more money to go to those remaining intact. A third is to increase the amount of moneys provided to historically underfunded campuses while decreasing appropriations to the rest in order to eventually balance the system.

None of these solutions are acceptable to most state legislators - either because of lack of financial resources or the potential of political fallout. Further, there could be serious future credit ramifications with each of these solutions, either for institutions of higher education, should their state appropriations be cut, or for the state, should they be forced to provide a greater portion of their revenues for higher education. An added complication is that highest education is an expenditure that is usually curtailed rather than increased during times of fiscal stress such as we are now experiencing.

Second, what is a stated responsibility to its citizenry regarding higher education? States have traditionally prided themselves on providing educational opportunities to their residents. However, the costs connected with that historical covenant are now being questioned . A task force on higher education in Ohio recently recommended that the various public institutions in the state be forged into one system under a single Board of Regents. This would allow more control over goals and over the elimination of programs. Further, a task force in Illinois has recently completed a similar study with recommendations to close certain programs when there are multiple choices in the state.

The question of privatization, or partial privatization, of public higher education is being raised more frequently than in the past in connection to these issues. Certain public institutions questioning the right of state legislatures to control promotions and program offerings when the percentage of state appropriations to total revenue is declining in comparison with the rising charges for tuition and fees. Others speak of the increasing costs of higher education and question whether a stated responsibility for education, beyond that for the major universities, stops after the primary level, especially when wide ranges of private and community colleges exist for a resident's choice. The issue of state-supported higher education is further confused by states being mandated by the federal government to provide designated amounts of funds to public institutions, as a result of litigation such as that discussed above.

Conclusion

The answers will not be quick in coming. It will be some time before the cases in Alabama, Mississippi, New York and Texas are fully resolved. The solutions will set precedents for other states with some trying to rectify historical or possible future problems before litigation actually occurs. How they choose to do that, either by increased appropriations to historically underfunded schools or by decreased funding for higher education state-wide or by something in between, will be the result of numerous lengthy studies and equally numerous legislative battles.

Although the credit strength of public higher education as a sector is not currently in question, analysts and investors should be mindful of the discrimination suits in these four states and should maintain surveillance on the systems involved, both to see what precedents may be provided by their solutions and to determine how the involved schools fare.

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