Many states have significantly reduced funding for public higher education. Much of tax funding now goes towards Medicaid, and perhaps half of that is not for poor people who need medical assistance but rather middle-class people in nursing homes. Nursing home payments are paid out of Medicaid as well as healthcare for the poor.

So, in a sense, the reason why states are spending less on higher education than a decade or two ago is simply because of this middle class entitlement. The middle class should be purchasing nursing home insurance but instead they leave it up to the state to support.

It isn't a lack of taxes, it is that Medicaid (a federally mandated program) is out of control and is absolutely destroying state education budgets.

"Governments’ general support for higher education 25 years ago was nearly 50 percent greater than state spending on Medicaid. That relationship has now flipped: Medicaid spending is about 50 percent greater than support for higher education. If higher education’s share of state budgets had remained constant instead of being crowded out by rising Medicaid costs, it would be getting some $30 billion more than it receives today, or more than $2,000 per student."

http://www.nytimes.com/2010/09/19/opinion/19orszag.html?_r=1

Can you provide sources showing this? I wasn't familiar with these numbers and would like to tell people about them.