Robert Reich discusses the reasons for the decline of public institutions (I tried to get at this same notion in a recent column -- the decline in support for public goods due to an increasingly divided society -- but the focus was narrower):

The Decline of the Public Good, by Robert Reich: ...Public institutions are supported by all taxpayers, and are available to all. If the tax system is progressive, those who better off (and who, presumably, have benefited from many of these same public institutions) help pay for everyone else. ...

Much of what’s called “public” is increasingly a private good paid for by users — ever-higher tolls on public highways and public bridges, higher tuitions at so-called public universities, higher admission fees at public parks and public museums.

Much of the rest of what’s considered “public” has become so shoddy that those who can afford to find private alternatives. As public schools deteriorate, the upper-middle class and wealthy send their kids to private ones. As public pools and playgrounds decay, they buy memberships in private tennis and swimming clubs. As public hospitals decline, they pay premium rates for private care....

Why the decline of public institutions? The financial squeeze on government ... since 2008 explains only part of it. The slide really started more than three decades ago with so-called “tax revolts” by a middle class whose earnings had stopped advancing even though the economy continued to grow. ...

Beyond all this is the reality that America no longer values public goods as we did before.

The great expansion of public institutions ... began in the early years of 20th century when progressive reformers championed the idea that we all benefit from public goods. Excellent schools, roads, parks, playgrounds, and transit systems would knit the new industrial society together, create better citizens, and generate widespread prosperity. Education, for example, was less a personal investment than a public good — improving the entire community and ultimately the nation.

In subsequent decades ... this logic was expanded upon. Strong public institutions were seen as bulwarks against, in turn, mass poverty, fascism, and then communism. ...

But in a post-Cold War America distended by global capital, distorted by concentrated income and wealth, undermined by unlimited campaign donations, and rocked by a wave of new immigrants easily cast by demagogues as “them,” the notion of the public good has faded. Not even Democrats any longer use the phrase “the public good.” Public goods are now, at best, “public investments.” Public institutions have morphed into “public-private partnerships;” or, for Republicans, simply “vouchers.” ...

[T]otal public spending on education, infrastructure, and basic research has dropped from 12 percent of GDP in the 1970s to less than 3 percent by 2011. ... We’re losing public goods available to all, supported by the tax payments of all and especially the better off. ...