This paper presents a framework informed by spatial models of politics to explain the dynamics of political competition in higher education policy and, in particular, the observed instability in the relationship between political variables and policy outcomes. To this end, I explore competing hypotheses for the relationship between government ideology and higher education spending decisions as well as test them using California data from 1976 to 2006. The results show that the growing polarization of ideological preferences explains, in part, shifts in states' policy priorities, leading to a gradual privatization of public higher education. (Contains 2 tables, 5 figures and 9 notes.)