Should We Free Our Public Universities?

Should We Free Our Public Universities?

April 15, 2011/Dome Magazine


By Craig Ruff


Governor Snyder proposes the largest, one-year cut in state aid to higher education in recent history. Only by adhering to certain accomplishments, like holding tuition rates to 7 percent and increasing graduation rates, can the state’s universities take a hit as low as 15 percent. Otherwise, the reduction is larger. This comes after a decade of cuts to higher education.


Is it unthinkable, in a steady decline of state support, for public universities to think “private?”


My view is “yes,” it’s unthinkable and detrimental.


What’s the quid pro quo? If universities declared independence from the state, what would they gain? Michigan’s constitution grants broad autonomy to its 15 institutions. They are free to establish fields of discipline, admittance and graduation requirements, tuition and fees, curricula, their physical plants, and nearly all other policies and procedures.


Governance is very much a publicly accountable system on each campus. Voters select the governing boards of Michigan State University, the University of Michigan, and Wayne State University, and the governor appoints boards, subject to Senate confirmation, at the other 10 (UM-Flint and U-M Dearborn are part of the University of Michigan and are governed by its Board of Regents). But eight-year terms inoculate trustees from the whims and interferences of the day, whether or not they are selected by the governor or elected statewide.


The state constitution clearly makes public universities autonomous: “Each board shall have general supervision of its institution and the control and direction of all expenditures from the institution’s funds.” The constitution could not be clearer.


Michigan has a unique system of funding a constellation (not a system) of public universities, setting them free from state oversight except for their having to: a) report annually on their income and expenses; b) hold public meetings of their governing boards; and c) refrain from giving preferential treatment to minorities and groups in admissions. Akin to tenure among faculty, the state’s granting of autonomy protects institutions from political interference in their policy choices.


In some states, like Ohio, the state government not only appropriates funds to it also sets tuition levels and imposes many regulations on public universities. It may be comforting to a university’s leadership to take a hit or two in state appropriations to free its boards from regulatory burdens. Not so in Michigan.


Governors and lawmakers have tried to use moral suasion and bully pulpits to extract tuition restraints on state public universities. But until Mr. Snyder’s budget recommendations this year, state policy leaders rarely have sought to legally link tuition hikes to state appropriations, let alone other goals such as graduation rates.


For about 20 years, the University of Michigan has been perceived to be on course to become a more private than public entity. Partly, this speculation has ensued from its endowment that, while paling in size to flagship private universities such as Yale, Harvard, and Princeton, dwarfs the endowment fund and interest stream of the other state universities. But even with a $7 billion endowment (roughly $250 million annually in interest income), the University of Michigan yearly receives more from state appropriations than interest off the endowment.


What does it profit a Michigan public university to go private? It foregoes annual appropriations (larger than any interest streams off endowments) with no concomitant relief from regulations or interference. Also, Michigan’s public has invested many trillions of dollars toward universities’ campuses, and why should the people of the state set free an institution without restitution? It’s not at all clear that a public university even has the constitutional right to be set free.


It’s folly to think of public universities spinning out of their orbit around state government. Likewise, it’s folly to think that they can absorb 15 percent-plus cuts in state appropriations without raising tuition far above inflation rates.


An institution offers value or it goes out of business. If the value of a baccalaureate or post-graduate degree exceeds its cost, the institution should raise its price. Of course, it too should restrain unnecessary spending and inefficiency.


I say that Michigan’s steady retreat from supporting higher education does not warrant calls for independence, but rather a stiffening resolve by universities to: a) become more efficient; b) hike tuition rates by commensurate amounts to state reductions, if not more; and c) enhance quality of education.


But offsetting diminished state funding should not be the only goal of universities. Their leaders, faculty, students/families, and alumni should press lawmakers and the governor to restore the “public” in public universities and begin increasing state aid.


Public universities are crown jewels in Michigan. Some have international reputations and all contribute mightily to the state’s economy, production of talent, and quality of life in their communities. They are too precious a resource to be set free and too precious to starve from further budget cuts.


Craig Ruff is, among many things, a senior policy fellow and former president of Lansing-based Public Sector Consultants.