Placing Public Universities Under State Bureaucracy Is No Way to Go

Placing Public Universities Under State Bureaucracy Is No Way to Go

September 10, 2010/Dome Magazine


By Thomas J. Haas


Higher education governance has been in the news lately, driven by concerns about high tuition, affordability, and duplication of services.


Business Leaders for Michigan (BLM), a business trade group, has suggested that efficiencies can be gained by greater management cooperation between the state’s 15 public university campuses. The eight Booth Newspapers collectively published a story suggesting that university independence is in part to blame for today’s affordability crisis — that the universities have too many duplicate programs, and too little coordination.


The Grand Rapids Press went further, arguing for creation of a state government-run university coordinating system, headquartered in Lansing. And at the Capitol, our elected policy makers regularly voice concern about the price of attendance.


No one is more concerned about higher education than those of us who lead Michigan’s public universities. But in seeking solutions, we must take care not to do damage to our campuses, which are the envy of the nation.


For nearly 175 years, Michigan has used a competitive management model for its public universities. The flexibility that this model offers has served Michigan well.


It would be a mistake to change it. University autonomy, which limits the involvement of politicians and state government bureaucrats into the curriculum and business operations of our public universities, is part of our state constitution. This long-standing practice has allowed our 15 public universities to quickly respond to national, state, and regional needs and to serve students and communities, particularly businesses, in a nimble fashion. Michigan has benefited greatly from this approach. No state boasts such a diverse group of high-quality public universities, and enrollment in them is at an all-time high.


Setting up a “command and control” board in Lansing would replace competition and free-market forces with a slow and ponderous bureaucracy. Adding another layer of bureaucracy in Lansing will serve no one’s interests and will make higher education more, not less, expensive.


This is an odd position to take at a time when many call on government agencies to cut bureaucracy and adopt competitive business models. I have worked in “system” states and find that state coordinating boards stifle innovation, increase costs, and raise new barriers.


A recent editorial headline in The Grand Rapids Press (“We Must Lower Costs of Higher Education”) makes an important point, and I couldn’t agree more. But I must ask this question: whose costs? If we mean the cost to taxpayers, that goal has been accomplished. Taxpayers used to provide 75 percent of revenue needed to operate the universities; today, taxpayers provide 25 percent or less.


University appropriations have been cut by hundreds of millions of dollars. Tuition has become a user fee that replaces the money that used to come from taxpayers. This inconvenient truth remains: higher education in Michigan has changed from a low-tuition, low-financial-aid model to a high-tuition, high-financial-aid model. Our citizens had become accustomed to the former; now, they must get used to the latter.


Accordingly, nearly every campus has increased student financial aid in amounts that equal or exceed the increase in tuition. University presidents are committed to doing everything we can to keep college affordable, but the real cost driver on tuition remains the state’s decision to dramatically reduce taxpayer participation.


That fact does not relieve universities of our obligation to control operating costs, as BLM rightly notes. In fact, we are collaborating as never before.


We’ve joined together to purchase energy, develop a high-speed computer network, cooperate on program offerings, and implement a myriad of other cost-saving programs. We are leaders in developing less expensive insurance alternatives — a massive expense for every employer. The universities, decades ago, created our own self-insurance corporations for handling property, casualty, and employee health insurance.


On average, university health insurance costs 25 percent less per employee than the state spends to insure its workers. We have suggested that the State of Michigan consider our model for its own insurance reform, which would save taxpayers millions of dollars.


Universities do not carry on as though the economic hardship that has affected so many of our students and their families does not matter to us. My campus has frozen salaries, increased insurance co-pays, and cut our annual budgets in tandem with reductions in state appropriations. Every university campus in Michigan is saving money in these and other ways, thereby reducing the pressure to raise tuition. We can, and will, continue to look for savings wherever we can find them.


Flexibly managed universities offering high-quality, accessible, and affordable degrees will lead Michigan’s economic recovery and create the jobs of the 21st century that our citizens deserve, and permit the next generation of Michigan’s children to find work in this state that we love. Disrupting university governance at this critical time will, I fear, produce the opposite result.


Thomas J. Haas is president of Grand Valley State University. He was chairman of the Presidents Council, State Universities of Michigan, from 2008-2010.