Minnesota built an economy and a quality of life on its investment in education. There is strong evidence and wide consensus that Minnesota's economy will continue to be largely knowledge-based and the state will have to increase the proportion of the population with some form of higher education credential in order to sustain the economic success the state has enjoyed since the mid-1950s. However, in recent years, higher education finance policy has not reflected what one would expect for a state wanting to sustain or increase the education of its populace.

In 1967, higher education appropriations accounted for 17.3% of the state's general fund spending. By 2010, this proportion decreased to 10%. And estimates suggest that the proportion will continue to drop to 7.3% in 2013. Another way to examine Minnesota spending is the change in real dollars. From 1967 to 1990 state appropriations to higher education averaged an increase of over 10% per year. Since then appropriations have decreased an average 0.6% per year.

It may be more illuminating to consider higher education spending in relationship to Minnesota's share of the nation's gross domestic product, which is a measure of state economic wealth. As shown below, the percent of higher education spending in relation to gross domestic product is slightly higher in 2010 than it was in 1967. However, this masks a large increase through the years peaking between 0.94% (1982) and 0.93% (1991) before gradually decreasing from 1992 to present.

While higher education appropriations as a percent of general fund spending may give us an idea of state spending priorities of dollars available, appropriations as a percent of gross domestic product provides a better insight into how we invest in our human capital in relation to the state's overall economic performance. This is significant, given it shows that higher education investment has shrunk to levels last seen in the late 1960s.

For more information, read "Minnesota Educational Needs and Higher Education Finance Policy" from the Minnesota Private College Research Foundation.