If you managed to save any of that nifty tax relief check the IRS mailed out this summer, best put it aside quickly. The financial forecast in many states appears cloudy, according to "State Revenue and Taxation: Issues for Supporting Public Service in the 21st Century," a new AFT report.

Despite record-breaking years of prosperity during the latter half of the 1990s, the report says that state governments opted to provide $28 billion in tax cuts over six consecutive years. These tax cuts were provided instead of improvements in the quality of government services.

Now, as the national economy is cooling, states already are feeling the pinch of reduced revenue projections. In May 2001, the Rockefeller Institute reported that only one of the 50 states was meeting its revenue forecasts. And with the ink barely dry on President Bush’s $1.35 trillion federal tax cut, states are looking at potential devastation for years to come. By 2011, the report shows, states will lose as much as $37 billion per year as a result of the repeal of the estate tax alone.

The report is the work of the AFT’s Federation of Public Employees Revenue and Taxation Task Force, which was charged with analyzing the structure of state revenue systems, the factors that affect the amount of revenue raised and recent developments in state policy. When the task force saw the extent of challenges facing public employees, it added an educational component to the report, recommending that AFT leaders and members at all levels should increase their knowledge of and activism on state revenue and tax policy issues.

The task force makes the following recommendations:

• Support efforts at the state and federal levels to collect taxes lost from e-commerce transactions. It is estimated that in 2003, states could lose up to $10 billion unless they capture these lost revenues.
• Support efforts to better regulate corporate tax incentives for economic development. These amount to lost revenues of $16 billion per year.

Public higher education is a funding line that is extremely vulnerable in times of revenue shortfalls, points out AFT researcher Ed Muir. The Pell grant program is one of the largest federal programs benefiting state institutions through student enrollments. In addition, higher education is a discretionary expense that states are quick to cut in hard times.

The report can be downloaded by visiting the AFT Web site at www.aft.org/research/reports/fpe/taxtaskforce.pdf.

 Universities are getting chummier with industry--an alliance wrought in part by the recent decline in state appropriations for higher education. In fact, between 1986-87 and 1996-97, the average state contribution to higher education shrank from 41.6 percent to 32.5 percent. At the same time, the impetus for universities and corporations to collaborate has grown as they address global concerns in all disciplines.

These increasing collaborations, and the financial arrangements associated with them, can be complex. So the American Council on Education’s Business-Higher Education Forum worked for two years with the National Alliance of Business to address some of the issues that threaten to derail these productive collaborations. In particular, they noted the need to study intellectual property rights, confidentiality rules and other conflicts of interests that often arise.

In Working Together, Creating Knowledge: The University-Industry Research Collaboration Initiative, the organizations make some interesting recommendations:

• Partners should negotiate "master contracts" to govern their relationship, so the smaller entity among them--be it the university or a small business--has assurances that it will not be disadvantaged.
• All parties--university, company and researchers--should sign confidentiality agreements when necessary.
• Companies should be prepared to cover the indirect costs associated with universities conducting research for the company.
• The usual locus of ownership and control of intellectual property rests with the university, although this is an issue that should be agreed to upfront.

Interestingly, while the ACE report has little to say about issues of academic freedom in these collaborations, the New York Times noted in a July 15, 2001, editorial that one state is not willing to leave it to chance. Maine passed legislation this year prohibiting state schools from accepting donations that include restrictions that conflict with academic freedom. To learn more about the report, go to www.acenet.edu.

Last year was not a good one for educators’ pocketbooks. Two surveys released this spring and summer show that the national economy’s downturn took a toll on the academic profession. According to the annual salary survey of the American Association of University Professors, faculty salaries increased 3.5 percent overall between the 1999-2000 and 2000-01 academic years. With the consumer price index at 3.4 percent, this meant an increase of 0.1 percent after inflation.

AAUP’s study, printed in the March-April 2001 issue of the association’s magazine Academe, points out several worrisome trends. The gap between private and public institution salaries is widening. This year, the gap was 22.4 percent; in 1994-95, it was 18 percent. Also, the data indicate an increasing number of faculty at the lower end of the ranks and fewer at the top, suggesting that full-professor faculty lines may be disappearing as senior faculty retire and are not replaced with promoted faculty.

The average salary of a faculty member, which the AAUP estimates at $60,070, is 26 percent less ($15,299) than that of the average highly educated professional, AAUP finds.

In the preK-12 teacher field, the news was worse, especially given the widely publicized need for thousands of new teachers. According to the AFT’s annual teacher salary survey, which was released in May, the average teacher salary increase in the 1999-2000 school year was among the smallest in 40 years and failed to keep pace with inflation, while the average beginning salary increase was actually less than the year before.

The average national teacher salary for 1999-2000 was $41,820, up 3.2 percent from the previous year. That is slightly less than the year’s inflation rate of 3.4 percent. By comparison, salaries for the 1998-99 school year had increased 3 percent. Teachers had an average of 16.1 years of experience in 1999-2000.

The average beginning teacher salary for 1999-2000 was $27,989, up 4.2 percent from the previous year. This marked a slight decrease from the 4.4 percent salary hike in 1998-99. Further, beginning teacher salaries continued to lose ground to starting wages in other white-collar professions. According to the report, while a new teacher could expect to earn an average of $27,989, college graduates could expect an average starting salary of $47,112 for engineering jobs; $46,744 for math/statistics jobs; $46,495 for computer science jobs; $40,242 for business administration jobs; and $38,210 for chemistry positions.

The salary figures used in the report were drawn from state departments of education. For the complete survey, visit the AFT Web site.