News flash: “”The system of higher education finance that has evolved in the United States requires annual increases in unrestricted revenues that are unsustainable in the current environment.””

That’s the message of the Delta Project on Postsecondary Education Costs, Productivity and Accountability, a nonprofit research group with a long name but a concise mission: tracking the way universities across the nation spend the money they receive from students.

Of course, the concept that costs are rising and cash is scarce in the world of higher education shouldn’t be news for any student at the UA. Tuition increases seem to have become an annual tradition. State legislators will have to face down a looming billion-dollar deficit before increasing public funding to Arizona’s universities. And the university’s yen for new construction is so deep that funding for new buildings and renovation needs to be disguised as a state “”economic stimulus”” package.

Unfortunately, the Delta Project’s latest report on university spending, released last week, suggests that those trends will only continue – and points out several dangerous developments in the way universities spend student money.

A product of analyzing decades of compiled data on budgets, spending and enrollment trends at universities across the U.S., the report asserts that “”in the last decade, revenues from tuition have increased faster than other sources of revenue everywhere but private research universities,”” and at “”public institutions, tuition revenues have grown faster than state and local appropriations.”” But despite these increases, fewer and fewer tuition dollars are being used for instruction – spent on things that actually benefit students and increase degree productivity, like hiring and retaining quality faculty and ensuring that classes are available to the students who need them.

Meanwhile, the gap between spending on students at private and public universities continues to grow. As of 2005, private research universities spent almost $13,500 more per student than public research schools. Plus, despite cost hikes over the past decade at public research universities, increased “”tuition revenues primarily replaced lost state appropriations,”” rather than being invested in students – a situation all too familiar for Arizona students. In fact, students at public research universities are now covering almost half the cost of university operations.

The bottom line of the report is clear: “”Students at public institutions are paying for a higher proportion of costs, but their money is not translating into a higher level of service.””

Fortunately, it offers an answer to the problem: Universities ought to focus not just on total cost, but on detailed analysis of the way they spend. Focusing on “”productivity concepts and measures”” rather than merely seeking to increase appropriations year after year offers the opportunity to stop tuition increases – but universities need to devote themselves to the same sort of detailed focus on productivity found outside the world of academia.

As the UA faces its own uncertain financial future, it ought to follow that advice.