AMENDMENT #3 AND THE UNIVERSITY OF ARKANSAS

John A. White, Chancellor

The "tax relief" promised Arkansans from the elimination of the sales tax on food and medicine will result in economic hardship for current and prospective students at Arkansas colleges and universities. The impact will be especially severe for UA students.

But that’s just the beginning. If Amendment #3 passes on November 5, and the tax revenue is not replaced in some form, the real loser will be the entire state. Areas most impacted will be local schools, libraries, police, firefighters, cities, counties, colleges and universities, and hospitals. Ranked 50th in most measures of educational attainment and economic development, Arkansas will continue to distance itself farther and farther from the rest of America. The State cannot afford to take a giant step backwards and jeopardize its future.

Arkansas’ future-its ability to compete economically and advance culturally in the new century-depends heavily on increasing its college-educated workforce. Recently, the state has made progress. Total enrollment in Arkansas’ public colleges and universities increased 5.2 percent, to 114,736 students, this fall. Measuring Up 2002, the higher education report card issued by the National Center for Public Policy and Higher Education, gave Arkansas improved grades in college preparation, participation, and completion rates.

Nowhere has progress been more apparent than at the University of Arkansas. We have led by example, raising the credentials of freshman classes from an average ACT of 23.5 to 25.0, while improving retention and six-year graduation rates.

Amendment #3 threatens to undo everything. If the lost revenue is not replaced by the General Assembly, the impact on our campus could be $4,378,488 a year (assuming all state entities share equally in the loss). And that’s only from groceries. If the measure is ruled to cover prepared meals, the total impact will be $6,393,166 per year. Over 10 years, that amounts to nearly $64 million in lost revenue.

If the elimination of the sales tax on food and medicine were all we had to worry about, things would be bad enough. But this proposed legislation comes on top of the biggest economic challenge faced in decades. Last year, the University of Arkansas did not receive $2.9 million of the total appropriation that was authorized in the original biennial budget passed by the General Assembly 2001. This year, we face additional cuts in our appropriation. If there is no growth in state revenue this year, the University of Arkansas could face a budget reduction of $9 million. Even with a modest growth in state revenue of 2.8 percent, our appropriation still could be reduced by $7.5 million.

Add to this the impending ruling on the Lake View School District Case, which alleges inequities in public school funding across the state, and Arkansas may be required to spend an additional $500 million to $1 billion a year on K-12 education. That also has significant implications for higher education funding.

This past year, University of Arkansas students faced a seven percent tuition increase. The University administration and Board of Trustees worked hard to keep that increase small, knowing its impact on UA students and their families. The increase was significantly less than the 9.6 percent average for four-year public universities across the nation. In some states, flagship public universities levied double-digit tuition increases to prevent a decimation of academic programs, student support programs, faculty and staff salaries, facilities maintenance, and the other essentials for maintaining academic quality. At Illinois, tuition increased 16.5 percent; at Iowa State, 19.4 percent; at Kansas State, 21.5 percent; at Missouri, 13.6 percent; at Texas A&M, 27.6 percent!

If Amendment #3 passes and the state does not replace the lost revenue, then student tuition would have to increase 16.5 percent to make up for the loss. Adding a 5 percent increase for inflation, a tuition increase of 21.5 percent would be required next year.

The University of Arkansas and its Board of Trustees remain committed to keeping tuition increases as low as humanly possible without compromising the need to improve our quality. To do so, we need your help: talk to your family and friends about the devastation Amendment #3 will wreak on our University, our state, and your pocketbook. Then go to the polls on November 5. Do the right thing for Arkansas!