State Tax Capacity
Why is this important?
This is a measure of the state's underlying ability to raise revenues that can be allocated to higher education and other public purposes. States with a strong and diverse economy typically have a high tax capacity. It is the state analogy to "student's ability to pay".
What are the policy implications?
This measure is one of the key variables in policy decisions regarding financing of higher education, especially decisions about the relative shares to be borne by students and the state.
Other factors to consider:
See all of the measures linked to the Understanding Higher Education Finance diagram.
Data sources and related links:
State Higher Education Executive Officers (SHEEO), http://sheeo.org