States and public colleges consider new relationships

Three years of budget battling has caused some state governments and their public colleges and universities to consider severing ties.

The combined wallop of recession-driven budget cuts to higher education, swelling enrollment and escalating tuition fees has prompted state policymakers and educators to begin eyeing changes in states’ traditional support for higher education. At least five states are considering proposals to begin weaning public universities from state control.

By Eric Kelderman, Staff Writer, Stateline.org

http://www.stateline.org/stateline/?pa=story&sa=showStoryInfo&id=354642

The furthest reaching proposals–in Colorado and South Carolina– would privatize public universities and colleges: freeing the state from financing the fast-rising costs of higher education and allowing colleges and universities to set their own tuition rates.

“Given our state’s budget situation, there are just too many colleges and universities to support,” said Will Folks, a spokesman for Gov. Mark Sanford (R) of South Carolina.

In Virginia and Wisconsin, state lawmakers and college educators are looking at giving public colleges more autonomy but perhaps less state funding. In Washington, lawmakers are considering a contract with public universities that would impose less state oversight and a steady stream of funding in exchange for specific performance goals, such as graduation rates.

While no states yet have taken the drastic step of severing ties to its public institutions of higher learning, educators worry that such changes would put the cost of public higher education further out of reach for poor and disadvantaged students.

Without state support, once-public colleges will raise tuition to private-school levels, creating a two-tiered educational system, predicts F. King Alexander, president of Murray State University in Kentucky. Alexander has written about the role of state and federal funding and testified before Congress on the issue.

“High-quality, affordable public education will no longer be in reach of the masses,” Alexander said “All of the kids will end up at institutions that cannot privatize.”

Altogether, states cut money for higher education by 4.5 percent in fiscal year 2004 and about 1 percent the previous year, according to a report by the American Association of State Colleges and Universities. Higher education funding did increase by 4.5 percent in fiscal year 2002, but half of the states cut that increase mid-year.

Higher education suffers more during economic downturns because lawmakers protect elementary and secondary education, welfare and health care programs in their budgets, wrote researcher William Zumeta, professor of public affairs and education at the University of Washington.

South Carolina, which has 33 state-supported colleges and universities at 79 campuses, cut higher education funds by nearly 20 percent for the fiscal year that began in July 2003. The state cut 7.4 percent from higher education the previous year.

The governor has offered his state’s public four-year colleges and universities the option of becoming fully private institutions, mostly to ease the state’s budget burden. No South Carolina colleges have taken up Sanford’s offer so far.

Sanford argues that the changes would help institutions save money by eliminating unnecessary programs and administration. “It would also free the state to devote funds to other critical education needs in South Carolina,” he said in a press release.

Sanford also has proposed creating a strong board of regents to manage the university system, wresting control from the Legislature and an advisory commission.

The Colorado Legislature is considering a similarly far-reaching proposal from its majority GOP leadership to end state funding for colleges and universities. State money would instead be given directly to students to reimburse them for tuition at either public or private colleges.

Colorado University President Betsy Hoffman has testified in favor of the bill, which is also supported by Gov. Bill Owens (R). Universities are supporting the proposal because it would give them the freedom to raise tuition, said Joan Ringel, spokeswoman for the Colorado Commission on Higher Education. Tuition in Colorado is currently capped by the state’s constitutional amendment limiting state spending increases.

Colorado cut higher education funds by nearly 28 percent this year. But because of the constitutional cap, the state’s colleges could not use tuition to make up shortfalls in state funding as other colleges and universities do.

Tuition is a more reliable source of income than the state budget, said Debora Merle, higher education advisor to Gov. Gary Locke (D) of Washington. Locke has tried several times to give public colleges and universities freedom to set tuition, but he has not gotten any proposals through the Legislature, which now must approve tuition increases, Merle said.

This year, Locke is proposing that the state write “performance contracts” with public colleges and universities. The state would guarantee a certain yearly increase, in exchange for public colleges and universities meeting standards for graduation rates, among other things. But his proposal also would give public colleges more flexibility in managing their campuses.

The Virginia Legislature likely will spend the summer studying a proposal by the University of Virginia, Virginia Tech University and the College of William and Mary to manage their own affairs. “Under the new model, the state would limit its financial contributions to the universities to less than would traditionally be expected,” states a summary of the proposal by the University of Virginia. “In exchange, the universities would no longer be subject to some state personnel, procurement and capitol-project regulations.”

The University of Wisconsin’s Board of Regents also is studying its relationship to the state and considering seeking greater authority to set tuitions to make up for lost state funding, said Linda Weimer, vice president of university relations at the University of Wisconsin. The state’s Board of Regents currently can propose tuition rates, but they must be approved by the Legislature, she said.

The trend toward loosening state reins over public colleges and universities is troubling to many in higher education, especially as the demands for an educated workforce are increasing. The Educational Testing Service estimates that there will be a shortage of 14 million college-educated workers by 2020.

The push for privatization also will have the effect of pushing cost on to the federal government, Alexander of Murray State predicted. As tuition rises, students who do go to college will rely more on federal student aid, he said.

“The problem is, nobody wants to pay for it,” Alexander said. The political power is now in the hands of the retiring baby boomers who have little interest in keeping the cost of college affordable,” he said. “They don’t care about tuition. They want to reduce their tax burden.”

Contact Eric Kelderman at: [email protected]

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