August 22, 2010/The Saginaw News
By Andy Hoag
An influential group of Michigan executives — a group that includes Dow Chemical Co. Chief Financial Officer William H. Weideman and Dow Corning Corp. Executive J. Donald Sheets — wants Michigan to become a “Top Ten” state for job and economic growth.
To do so, the Detroit-based Business Leaders for Michigan is calling for a change in the state’s approach to higher education to help achieve that goal.
They say the state’s higher education system is inefficient and costly. If the state’s 15 public universities and 28 community colleges are going to remain separate, and not adopt a one-system approach as Ohio recently has done, then they need to work more closely together to lighten the burden on taxpayers.
As the group touts its “Michigan Turnaround Plan,” however, some higher education officials, such as Saginaw Valley State University President Eric R. Gilbertson, have a different view. He sees the current system as a good one.
“What’s broken here? I think by all reasonable measures, Michigan has an extraordinary set of universities,” Gilbertson said. “I can’t think of another state in the country that spends as little on higher education and gets more in return than Michigan.”
Business Leaders for Michigan point out that their emphasis now is on sharing services and not consolidation.
“We’re not specifically advocating that we need to consolidate schools,” said group Vice President Tim Sowton. “What we are saying is if two or more schools get together and decide (to share services), state law shouldn’t make it more difficult.”
The group’s plan calls for the state’s universities and community colleges to “rationalize” management, sharing some administrative functions such as human relations and information technology, “so increased funding can be put to maximum use.”
Gilbertson acknowledged that higher education is costly, but said centralized efforts to achieve efficiencies often result in higher expenses.
Delta College President Jean Goodnow and officials at Central Michigan University could not be reached for comment.
Business Leaders CEO Doug Rothwell heads up a group that is a who’s who of Michigan industrial chiefs and includes the presidents of both the University of Michigan and Michigan State University.
Rothwell argues that Michigan needs a highly educated work force to escape its economic struggles, and noted that the state is 31st in the country for per capita spending on higher education, with support down 10 percent in the last decade. The schools have a combined budget of $6.3 billion and serve 446,185 students.
“The push would go hand in hand. The colleges would get more support from the state, but they’d have to show they were doing more to make that money go further by being more efficient,” he said.
Rothwell said universities already have demonstrated some desire to lower costs, noting that some University of Michigan employees are paying 30 percent of their health insurance premiums. But Rothwell also notes there are 43 public colleges in the state between the universities and community colleges, each with separate administrative functions.
Gilbertson, who previously has served roles in Ohio and Vermont, both of which have featured consolidated systems, said he values the autonomy that Michigan allows through its constitution.
“By virtue of being created by the constitution, (the universities) are immune from a lot of the politics from state government,” Gilbertson said. “The Legislature cannot dictate what your curriculum is, or your admissions standards or your student disciplinary codes. In many other states, they have the Legislature adopting laws dealing with (areas) like that.”
College leaders said they don’t dispute there is potential savings in collaboration, and they already belong to buying groups that have brought cheaper prices for energy, insurance and technology.
The 15 universities participate in a “full array of inter-institutional collaborative efforts,” according to a report filed by the Presidents Council, State Universities of Michigan.
Among those are the Michigan Universities Self-Insurance Corp. and the Michigan Universities Coalition on Health. Eleven of the 13 public universities — University of Michigan’s Dearborn and Flint locations are included with UM — participate in the insurance group, while 12 participate in the health coalition.
Since its creation in 1987, the insurance corporation has returned more than $30 million in funds in the form of dividends back to the member universities, the council reported.
“We’re saving hundreds of thousands of dollars a year (with the insurance cooperative),” Gilbertson said. “A thoughtful analysis should take a look at what already is going on. For most of us, it’s been a huge savings.”
State schools have, in recent years, also made it easier for students to transfer credits from one state institution to another, and nearly 15,000 students are looking to complete four-year degrees by taking some of their classes at community colleges, said Michael Boulus, executive director of the Presidents Council.
“Our motto is, ‘Collaborate, not duplicate,’ ” he said.
Part of that motto could be the word compete.
“We’re much more market driven than institutions that are part of a system,” Gilbertson said. “All of their actions, all of their initiatives are governed centrally rather than being market driven.”
Ferris State University President David Eisler said autonomy forces schools to look for new course offerings that help their communities and attract students.
“Because we’re exposed to market pressures, we can respond to a need,” he said. “We’re always looking to see where there might be a niche that we can fill.”
Yet William Sederburg, a former Michigan state senator who led Ferris State University for nine years, says centralizing can save money. He’s now Utah’s commissioner of higher education, overseeing 10 public colleges and universities.
After working under both types of systems, Sederburg said Michigan would benefit from a centralized approach, saying collaboration in purchasing and other areas saves millions of dollars.
He said his state’s schools have flexibility, but also have oversight to prevent duplication. New academic programs are approved by state regents.
New York leaders — who run what is believed to be the largest university system in the world — say there are advantages to Michigan’s autonomy.
“The Michigan universities have an independence, and I wouldn’t lose that for the world,” said Monica Rimai, senior vice chancellor and chief operating officer at State University of New York.
“Michigan is unique, with the University of Michigan’s chartered existence and Michigan State University’s land-grant status. There are really two 900-pound gorillas, two world-class universities and that’s something most states can’t offer.”
And Gilbertson said he can’t think of any positives in New York’s system.
“(Michigan’s system) is quite frankly remarkable. If we were at (SUNY), we would have to go to the Legislature to raise tuition. Then every issue becomes a political issue instead of an educational issue,” he said.
For Ohio, Eric Fingerhut, the chancellor of the University System of Ohio, said bringing their universities under one umbrella made them stronger.
Fingerhut is directing the state’s 14 public universities and 23 community colleges from autonomy to one system, a move he says will both save money and graduate more — and better prepared — students.
“We’re moving into a global, technical, computer-based economy and the greatest asset we can have is higher education,” Fingerhut said. “Ohio has an exceptional set of universities, but the problem is none of those individual assets could compete globally.”
In Michigan, such a setup would require constitutional changes. The U-M, MSU and Wayne State boards are elected statewide, while others’ trustees are appointed by the governor with Senate approval.
Sowton, the Michigan business leaders group vice president, added that the group is suggesting the state “would have to make (shared services) a condition of any additional funding that universities and colleges would receive.”
“For the universities and colleges to win over the Legislature, so to speak, and start receiving more money again, they’d have to share some effort in efficiency,” he said.