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Va. Colleges Seek Financial Flexibility

Lawmakers to Act on Measure Being Watched Across Country

By Susan Kinzie
Washington Post Staff Writer
Wednesday, April 6, 2005; Page B05

The Virginia legislature will act on a bill today that Gov. Mark R. Warner (D) calls the most sweeping change to public higher education in decades.

It's not just that every public college in Virginia could have, to varying degrees, more freedom from regulations, more flexibility and more accountability for meeting state goals. It's part of an evolution in what it means to be a public university, experts said, emblematic of a conversation happening in many states as the share of public money has declined over the past couple of decades -- and something that will be closely watched as it shakes out.

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Full Report

"We're sure looking at it," said David Longanecker, executive director of the Western Interstate Commission for Higher Education.

Public universities across the country are rethinking their relationships with the state, said Nils Hasselmo, president of the Association of American Universities. "They're looking for greater freedom to take their own fate in their own hands by, for example, setting their own tuition, entering into strategic relationships with other institutions and business and industry."

Many schools have become much more entrepreneurial, more dependent on private donors, more independent and more creative in finding ways to get money as they grapple with yo-yoing state funding and rising costs. Some are jacking up tuition and offering more financial aid to the neediest students, as private schools have done. Even as many schools set ambitious goals to increase research and achievement, they are wondering how to pay for all this.

The traditional model, said University of Texas System Chancellor Mark Yudoff, is broken.

For the University of Virginia, which has weathered years of budget cuts and whose private donations recently exceeded its state dollars, it was time for a change.

U-Va., the College of William and Mary and Virginia Tech asked for charter status: In exchange for less state money, they said, give us greater freedom to use our market clout to raise money in other ways.

"Although a lot of people use terms like radical, far out there, we see it as an evolution of what we've been working on" for years, said Colette Sheehy, vice president for management and budget at U-Va. "Fifteen years ago, we didn't even write our own payroll checks -- we ran tape, sent it to Richmond [and] they sent it back here."

They want to get rid of such inefficiencies and have more flexibility and make the school one of the best in the country -- public or private.

During this year's legislative session, the proposal university leaders had been pushing was both scaled back and widened in scope -- to include all public universities rather than just three -- in order to win support in the legislature. Some lawmakers had warned about the potential for skyrocketing tuition, loss of protections for employees and the possibility that schools would lose sight of their public mission.

"Thomas Jefferson founded U-Va. to be a public university; he chose to establish it with a powerful link to the state, both in funding and oversight," said Jeffrey Rossman, a U-Va. professor who helped lead opposition to the original bill. "He felt democracy could only be strong if aristocracy of birth was replaced by aristocracy of merit. That could only happen if high-quality education were available to all ranks of society."

In the current version of the bill, which has been amended by the governor, there would be three possible levels of autonomy. Details would be hammered out in the months to come -- today is the legislature's one-day session on Warner's amendments and vetoes -- but the basic outline would be greater flexibility in how colleges buy things and spend money in exchange for more accountability for meeting goals set by the state, such as access and affordability.

Layers of oversight are built into the amended bill. Some analysts even predict the end result of the management agreements could be more oversight from the state -- not less.

Still, Virginia is the first state to open the whole system to potential changes, said Travis Reindl, director of state policy analysis at the American Association of State Colleges and Universities.

"This is a new frontier," Reindl said. "It's part of a national conversation that is just going to continue to build over the next few years."

© 2005 The Washington Post Company


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