The Universities Are Major Lobbyists Now

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Colleges and universities have learned a lot from the late, great bank robber Willie Sutton, who, when asked why he robbed banks, answered “that is where the money is.”  In an extension of the Sutton Hypothesis, colleges have learned that an awful lot of the largess that keeps them flush with funds comes from 51 other locations -Washington, D.C., and the 50 state capitals.  They spend hundreds of millions of dollars annually just on lobbying -trying to persuade Congressmen, legislators, and key public officials to send money their way. Spending hundreds of millions to acquire billions in funding seems like a shrewd investment.

Turning first to the federal government, Open Secrets reports over $90 million in registered education lobbying activity occurred in 2012, over 90 percent of it by higher education.  The numbers actually are somewhat lower than in 2010 (about $110 million), probably because of Congressional reduction in earmarked grants. Two schools, Texas A & M and Boston University, spent over $1 million on lobbying each, and another 20 schools spent $500,000 or more. Most were not-for-profit institutions. Additionally, millions more were spent by trade associations representing groups of schools. The Association of American Medical Colleges, for example, spent $2,210,000, and the Association of Private Sector Colleges and Universities $960,000.

At the federal level, universities devote so many resources towards lobbying in part because so much federal money is at stake in grants and contracts–tens of billions of dollars a year, as James Piereson mentioned in a Wall Street Journal article last week. So it is no surprise that many research universities spend tens of millions of dollars lobbying on Capitol Hill.

Don’t Forget State Money

But lobbying Washington is just the tip of the iceberg. First, those numbers exclude all state government lobbying, which is probably much larger than federal totals since state governments provide vastly larger amounts in direct university subsidies. Second, there are a lot of people on university payrolls who are effectively lobbyists, but whose salaries are not rported as as lobbying expense.

Take Ohio State University. It reports it spent a comparatively modest $230,000 in 2012 on federal lobbying.  Yet it has a “government affairs” office with six persons making over $100,000 a year excluding fringe benefits. It has a “senior vice president,” a “vice president,” two “associate vice presidents,” and two “assistant vice presidents.” They together collect over $900,000 in salary.  Adding in fringe benefits and compensation of lower ranked employees, rental costs for its Washington office, etc., at the bare minimum the school spends $1.5 million on lobbying expense, and probably a good deal more.

Ohio State is probably fairly typical. I looked at the web site of the central office of the University of California. Some 30 employees serve in federal government relations, state government relations, or a policy division devoted to developing stands on legislative issues at both the federal and state levels. And that excluded lobbyists in the health care part of UC’s vast bureaucracy. Far more important, that ignores the 10 largely autonomous campuses. For example, at UCLA, there is an “executive director for federal relations,” another executive director for “state government relations,” a third one for “community and local government relations,” and a fourth one for “health service government relations.”  An educated guess for the entire University of California: minimally 100 employees are involved in what might by generally termed lobbying activities.

Spending Half a Billion a Year

Looking nationally, it seems to me inconceivable that all of higher education spends much less than $500 million on lobbying efforts, and probably a good deal more if full accounting is done (for example, none of the president’s salary is usually considered lobbying expense, but most university presidents spend a good portion of their time trying to get governmental dollars; also alumni and others expend considerable resources wooing legislators, sometimes with campaign contributions). If the true lobbying expense is $1 billion, a highly plausible number, that substantially exceeds $60 for every full-time equivalent college student in the U.S., running no doubt much higher (perhaps $100) at the four year schools then at the community colleges.

Moreover, even this is not the full extent of university resources devoted to trying to extract governmental funds. Every research university has a significant grants office, mostly involved in the process of obtaining and administratively the tens of billions annually received in federal research grants. While not formally termed “lobbying,” this spending serves the same purpose: trying to persuade governments to provide funds.

I only wish universities would expend as much effort to cutting costs as they do to their hustling governments for funds. The incentive systems favor more university spending rather than cost reduction. Maybe it is time to change that by tying government support more to cost reductions and good student outcomes. And should state governments allow their public universities spend unlimited amounts of taxpayer money trying to extract still more money from the taxpayers?

(Photo: Ohio State. Credit: Ohio State.)

Richard Vedder

Richard Vedder

Richard Vedder teaches at Ohio University and is the author of "Restoring the Promise: American Higher Education Today."

2 thoughts on “The Universities Are Major Lobbyists Now

  1. Reminds me of the wonderful columns at SCIENCE Magazine by Dan Greenberg about Professor Grant Swinger who ran the Institute for the Absorption of Federal Funds.

  2. “I only wish universities would expend as much effort to cutting costs as they do to their hustling governments for funds.”
    Are you under the impression that these are mutually exclusive?
    Texas A&M has the lowest administrative cost ratio in the state, by far, at 4 percent, and one of the lowest among national peers, and is one of the top five in the state in terms of space use efficiency. Not bad considering it is the largest university in the state and one of the largest in the nation.

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