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The case for chartered universities and colleges
Related
link:
- The budget deal didn’t
solve Virginia’s real problems
by Charles W. Steger
For Virginia Business
June 2004
For
many years, Americans have benefited from the investments
of previous generations. Now, our nation appears reluctant
to reinvest in various public goods, whether it be public
infrastructure, transportation, the environment, or
education. The story is the same in Virginia, and by
now most Virginians have become accustomed to hearing
about the underfunding of key state responsibilities,
particularly education.
According to numerous studies, including several conducted
by the General Assembly, Virginia’s higher-education
system is now underfunded by about $400 million a year.
Virginia Tech’s share is about $40 million —
more than the operating budget of our College of Engineering.
This is an issue we must address, because the stakes
are huge for the next generation of students, for businesses
and markets that rely on new knowledge and trained workers,
for our nation’s industrial competitiveness and,
indeed, for our quality of life. As of this writing,
money in the state budget for higher education is unknown,
[due to protracted negotiations that only just produced
a budget in late May following an unprecedented special
session that dragged on for more than 100 days], but
even the rosiest scenarios will not bring funding back
to the level of 2001.
Recognizing the unlikelihood that we will see restoration
of lost funding anytime soon, three universities have
proposed a novel solution: If the state cannot fully
fund us, then give us the flexibility to manage ourselves.
To counter the impact of budget cuts and underfunding
— which has resulted in fewer teachers, larger
classes, and fewer course offerings — Virginia
Tech, the University of Virginia and the College of
William and Mary proposed the University Restructuring
Initiative during the 2004 General Assembly session.
The initiative, which is under study, would give each
institution — and any others that qualify —
increased authority and management flexibility for operations.
For instance, schools could set tuition rates, which
would reflect the state’s “cost to educate”
and the market for peer universities.
This is not privatization. Under the new relationship,
authorities and performance standards would be spelled
out in the charters in much the same way that a municipality
receives its governing authority. However, the universities
would remain public institutions with boards of visitors
appointed by the governor and accountable to the commonwealth.
In addition, chartered universities would remain under
the control of state laws governing education. The state
still would approve new degree programs and determine
certain management standards. Plus, schools would be
subject to the Freedom of Information Act and the Conflict
of Interests Act. So the new relationship would not
affect the compact we have with the people of Virginia,
who share with us a desire to sustain educational excellence.
Under any scenario, public university tuition in Virginia
is expected to rise. During the recent recession and
in the early ‘90s, higher education has carried
the lion’s share of budget cuts. Tuition was constrained
— either frozen or reduced — by the legislature
for seven years. The net effect? We under priced the
product at the expense of quality and service. Virginia
Tech, for example, has the lowest overall cost to attend
of all our 23 public peer universities throughout the
nation. But are we better for it? Today, tuition at
all state universities compares very favorably to other
states, but sufficient monies are not available to properly
run the enterprise.
At the heart of the restructuring initiative lies the
preservation of quality. Virginia schools have over
the past several decades built a national reputation
for excellence and value. But they cannot continue to
live on reputation alone. Investments are needed now.
We believe our approach is positive for the state, the
school and our students. It would enable us to use our
own resources to solve persistent funding shortfalls.
New financial resources could be applied to hire additional
faculty or address long-standing salary inequities and
deficient operating budgets. Students would see protection
of quality programming, retention of talented faculty,
increased course offerings and reduced class size.
Anticipating cost savings from this new arrangement,
the charter universities are willing to accept a smaller
share of future higher education funds from the commonwealth.
We believe the restructuring initiative is consistent
with current political philosophies. Most importantly,
when considered against today’s political realities,
it is about the only viable option for some of our state
universities.
Charles
W. Steger is the president of Virginia Tech.
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