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Affluent Christian Investor | September 22, 2017

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“Free Tuition” Just Means More Taxes

(Photo by John Walker) (CC BY) (Resized/Cropped)

(Photo by John Walker) (CC BY) (Resized/Cropped)

There is no such thing as a free lunch. I learned it as the acronym TINSTAAFL. It is, of course, true. If your friend buys your lunch, it may be free for you, but your friend ends up paying for both. If, instead, the restaurant owner says it is on the house, it is still not free. The restaurant owner still has to buy the supplies and pay all the bills, and forego the profits he would have made, as well as the things he could have bought with it. Whenever resources are used, including the scarce resource of time, there is an opportunity cost, one that can often be measured in dollars.

New York State recently enacted a bill making tuition free for New York residents at community colleges and state universities. Free tuition is a good deal for students who fit the criteria. Free tuition, however, is definitely not free. Professor salaries, building construction and maintenance, administration costs, and the hundreds of other types of expenses don’t magically disappear when tuition is free. Somebody pays for them, and those somebodies are the already-overburdened citizens, many of whom have been voting with their feet to other states.

As it turns out, taxpayers don’t like paying taxes. New York state is at or near the bottom of state rankings regarding tax burden, depending on which study is cited. It is at the bottom of the list for competitiveness among the states. Population, on net, is leaving the state, in spite of the high level of foreign immigration. The state economy, with the exception of New York City, is proceeding at a sluggish pace, in spite of State megadeals with large, well-connected corporations, deals that will end up costing taxpayers mega-dollars with disappointing results. Much of the development money is free for the millionaire owners of the corporations, but it is not free. Someone pays for it, and it is not the governor.

Free tuition is something else that the governor doesn’t pay. It is just another addition to the tax burden. The argument is that education is an investment in the future and, that if the state pays for it, it will reap a return in the future when graduates are more productive with their newly acquired education and begin to pay taxes. It is true that they may be more productive, depending on their majors, but the question is where will they be productive? Who will ultimately reap the benefit?

The law includes a provision that students must work within New York State for as many years as they receive the grant. Otherwise it gets converted into a loan that must be paid back. That might keep them here in many instances for two to four years, the time when they are the least productive in their new field. As they mature in career and family life, they will be drawn away as almost a million and a half have been in the decade 2005 to 2014, with a similar trend still continuing. Though the actual population in the state has not declined nearly that much, that is due only to massive immigration from foreign countries.

New York again ranks 50 out of 50 in economic freedom in the states, and with the ever-increasing tax burden, many New Yorkers are finding that a better life lies elsewhere. It doesn’t have to be that way. New York, as in the people and geography, is amazing. There is so much here that is good. It has a lot to offer if New Yorkers will enthusiastically reject the mentality of free goodies embodied in the progressivism that is ruining the potential that lies dormant.

 

Originally published on Daniel-McLaughlin.com.

Daniel J. McLaughlin is the author of “Compassion and Truth-Why Good Intentions Don’t Equal Good Results.” Formerly a finance executive, he is now focused primarily on writing on economics, business, and politics. You can find him at daniel-mclaughlin.com.

 

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