Despite steady increases in state spending on higher education, its share of the overall revenue pie shrank between 1980 and 1992, according to a study released today by the American Council on Education in Washington.

State appropriations for higher education rose 110 percent in the 12-year period, from $19 billion in 1980 to $40 billion in 1992. But higher education's share of state revenues fell from 11.3 percent to 9.2 percent.

''This has led to concern that the nation's citizenry and its representatives in state governments are downgrading the importance of higher education,'' the report says.

The 1990 recession is blamed for part of the decline. State appropriations in constant dollars increased throughout the 1980s and then dropped between 1990 and 1992.

But increased competition for public dollars may play a more significant role in the decreased funding for higher education. A growing share of state funds are being devoted to other social demands, such as elementary and secondary education, health care, welfare, and corrections, the study found.

''Such reallocation of state funds, when coupled with slower growth of state revenues and continuing increases in enrollment, may have a substantial impact on higher education,'' the report states.

Since some of the appropriations for other social needs are based on formulas, they take on the characteristic of an entitlement program, argues Charles Andersen, author of the report.

Yet, at the same time, Mr. Andersen points to evidence that many universities are ''responding proactively to recent financial pressures.''

''Higher education, like US industry, is undergoing major self-examination, with an eye to greater efficiency and effectiveness,'' the report says. This could lead to a less costly higher-education system.

''In all likelihood,'' the report concludes, ''the future will bring some combination of the two approaches -- more funds and more efficiency.''

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