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<DIV class=postedDate>Friday, March 18, 2011</DIV>
<H1 class=topStorytitle>Are "charter universities" the future of
state-funded higher ed?</H1>
<DIV class=story-byline>By David Harrison, Stateline Staff Writer</DIV></TD>
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<TD><SPAN class=bodytxt>Courtesy of University of
Cinncinati</SPAN> </TD></TR>
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<TD><SPAN class=detailHeaders>Ohio Governor John Kasich has
proposed turning public universities such as the University of
Cincinnati into what he calls "charter universities." In
exchange for less public funding, public schools would gain
more autonomy from state rules in running their day-to-day
affairs.</SPAN></TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE><EM><STRONG>Editor's
note: This story has been corrected to reflect the fact that the proposal
to split the University of Wisconsin-Milwaukee from the state system came
from the governor's budget, not from the
university.</STRONG></EM><BR><BR>On the face of it, the <A
href="http://obm.ohio.gov/SectionPages/Budget/FY1213/ExecutiveBudget.aspx">budget</A>
proposal that Ohio Governor John Kasich released this week looks like
terrible news for state universities. Not only would Kasich’s plan slash
higher education spending by 10.5 percent but it also would cap tuition
increases at 3.5 percent a year. <BR><BR>So it might come as a surprise
that some university presidents received the plan warmly. Within hours,
Ohio State University President E. Gordon Gee released a <A
href="http://www.osu.edu/news/newsitem3037">statement</A> praising the
governor for “understanding that higher education and our state’s
long-term strength are inextricably linked.”<BR><BR>Gee’s optimism rests
on another aspect of the governor’s budget. In exchange for the budget
cuts, Kasich would give state universities more autonomy in running their
day-to-day affairs. Long-term, that could save schools money. “We at Ohio
State continue to move aggressively in both advocating for regulatory
freedom and reconfiguring and reinventing our institution,” Gee
said.<BR><BR>With states mired in their fourth straight year of budget
shortfalls, many university presidents around the county seem willing to
make deals like the one in Ohio. In states such as Oregon, Louisiana and
Wisconsin, flagship universities are inching away from their traditional
patrons in the statehouse, accepting lower levels of state funding in
exchange for freedom from state regulations. <BR><BR>The result may
be a new relationship between states and their public universities. For
state leaders, that relationship may wind up being less of a budget drain
— but politicians will have less leverage to tell universities what to do
and how to do it. For universities, less state funding and oversight is
likely to come with higher tuition and more reliance on private-sector
funding. At the same time, it will raise questions about the core mission
of state universities whose original purpose was to offer an affordable
education.<BR><BR>“The holy grail for a lot of flagship institutions is
full tuition autonomy,” says Rich Novak, of the Association of Governing
Boards, which represents university boards. “When you strip everything
away from it, that is basically what these institutions want. And full
admission autonomy which means that they can admit more out of state
students and get out-of-state tuition.”<BR><BR><SPAN class=moreStory>More
autonomy</SPAN><BR><BR>This is not the first time Ohio has sought to
change how it pays for higher education institutions. In 2009, the state
overhauled its funding formula to reward schools for keeping students
through to completion. Instead of receiving money for every matriculating
student, funding is now weighted towards universities that keep students
through to graduation.<BR><BR>Now, Kasich, a Republican in his first year
in office, is calling for turning the state’s public universities into
“charter universities.” That designation would allow them to operate under
fewer state regulations. It’s still unclear what that freedom would look
like, but education officials have given the example of exempting state
universities from rules requiring multiple contractors on building
projects. That’s a regulation that tends to drive up the price of
construction on campus.<BR><BR>The plan has a familiar ring to it. In
Wisconsin, Republican Governor Scott Walker has proposed splitting off the
state’s flagship public university in Madison from the rest of the
University of Wisconsin system. The move to set up the school as a
separate authority would give the University of Wisconsin-Madison more
leeway in spending and setting tuition. The governor also proposed
studying a similar split for the University of Wisconsin-Milwaukee. The UW
system faces a $250 million cut in Walker’s proposed budget for the next
two years, about half of that coming from the Madison campus.<BR><BR>In
Louisiana, lawmakers approved legislation last year allowing higher ed
institutions to raise tuition if they met certain requirements, such as
higher graduation rates. Now, Republican Governor Bobby Jindal wants to
combine some administrative functions and give schools more leeway in
hiring, setting tuition and purchasing.<BR><BR>And in Oregon, state
university officials are pitching a broad plan to finance the University
of Oregon through state bonds and private donations. Supporters of the
plan say it would protect the school from swings in state budgets and
provide a more predictable funding stream. Critics say the plan could lead
to more tuition increases. During a state Senate hearing on the idea last
month, students showed up to protest wearing red tags on their shirts that
said “Keep UO Public,” according to <A
href="http://www.oregonlive.com/education/index.ssf/2011/03/post_10.html"><EM>The
Oregonian</EM></A>. <BR><BR><SPAN class=moreStory>The tuition
trade-off</SPAN><BR><BR>While the share of state funding in university
budgets has been declining for decades, the drop has become more
pronounced during the recession, forcing price increases and intensifying
talk of university flexibility. Many university officials, like Gee, have
indicated a willingness to exchange reduced state aid for the ability to
raise more revenue on their own.<BR><BR>But as long as the state
appropriations keep flowing to schools, lawmakers are going to want to
have some say in tuition rates, says David Breneman, a professor at the
University of Virginia.<BR><BR>“Governors and legislators will put up with
a certain amount of tuition increase,” he says. “But at some point they
balk.” <BR><BR>Proposals to grant more autonomy to state universities are
not new. In 2005, Virginia lawmakers granted the University of Virginia,
Virginia Tech and the College of William and Mary more autonomy from the
state. Routine administrative business such as purchasing or payroll no
longer has to go through officials in Richmond. In return, the state
required the universities to meet objectives on student access and
affordability.<BR><BR>There is a concern, however, that granting state
universities too much authority could jeopardize their original mission,
to serve the state’s students. “There’s a sense of a broken contract
here,” says Breneman. “There’s an emotional tide to this sort of thing.
It’s almost like a divorce.”<BR><BR>In Ohio, Sara Kaminski, executive
director of the Ohio Conference of the American Association of University
Professors wrote an editorial in <A
href="http://www.dispatch.com/live/content/editorials/stories/2011/03/12/charter-universities-would-be-bad-for-students-taxpayers.html"><EM>The
Columbus Dispatch</EM></A> saying Kasich’s proposal would renege on the
state’s commitment to providing an affordable education.<BR><BR>“In Ohio,
this would make it even more difficult than it has already become for the
average Ohio family to send children to college,” Kaminski wrote.
“Students will either choose not to attend college or will graduate with
an inordinate amount of debt — both of which will equate to less spending
potential in our economy.”<BR><BR>— Contact David Harrison at
<A>dharrison@pewtrusts.org</A></SPAN> </TD></TR>
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