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A comparison of the proposed UW System Public Authority and the Restructuring Act in Virginia

by Noel Radomski, WISCAPE Director and Associate Researcher | Feb 17, 2015

Since Governor Walker released his 2015-2017 biennial budget, which included a proposed $300 million cut to the UW System and conversion of the UW System to public authority, many have asked if there are lessons we can learn from other states about the likely impact of Walker’s proposal. Based on a literature review, conversations with higher education scholars and system administrators, and an informative Wisconsin State Journal article by Dan Simmons, one state sticks out above all others: Virginia.

Specifically, in 2005, with broad bipartisan support from Governor Warner, the Senate, and the House of Delegates, the Restructured Higher Education Financial and Administrative Operations Act (the “Restructuring Act”) was approved in Virginia. The Restructuring Act provided institutions different levels of autonomy in exchange for more accountability to the Commonwealth. This is a key difference when compared with the proposed UW System public authority proposal, which would provide the new UW System public authority and its board greater flexibilities in the areas of procurement, capital outlay, personnel, and enrollment and tuition control without any form of accountability. This approach can be viewed as a move toward privatization. I recommend that Gov. Walker and the legislature review the Virginia model prior to reviewing, modifying, approving, or tabling the public authority proposal.

To entice you to read this entire blog entry, at the end I will offer several recommendations on the proposed UW System public authority. In this entry I will not address the proposed $300 million UW System budget cut, because one topic is enough and because there is already ample public dialogue surrounding it.

Several of my recommendations emerged after Governor Walker’s February 11th announcement, in London, that he was open to moving up the creation of the UW System public authority from July 1, 2016, to July 1, 2015. The recommendations have gained more relevance as the governor’s office has offered new interpretations on the proposal and said they are open to the possibility of a permanent tuition cap. In short, there are still many questions about the proposed UW System public authority, which Wisconsin legislators should consider carefully before moving forward.

To learn lessons from the Restructuring Act in Virginia, we need to first understand their higher education governance structure and what took place there. Context is important.

Difference in State Higher Education and College and University Governance Structure

Wisconsin and Virginia’s state higher education governance structures differ substantially. The State Council of Higher Education for Virginia (SCHEV) serves as the Commonwealth’s coordinating body for higher education. Virginia’s SCHEV serves as a coordinating body for its community college system—which includes 23 colleges on 40 campuses across the Commonwealth—15 public, four-year colleges and universities, and a junior/transfer-oriented public college. Wisconsin by contrast maintains two systems: The UW System, which includes UW-Milwaukee, UW-Madison, 11 comprehensive universities, 13 UW Colleges, and the UW Extension; and the Wisconsin Technical College System, which includes 16 technical colleges with 49 campuses and a number of additional outreach facilities.

The Virginia Experience: Transparency, Checks and Balances, Extensive Public Dialogue

In 1988, then Governor Baliles established the Virginia Commission on the University in the 21st Century, which recommended institutional innovation to meet the Commonwealth’s educational and economic needs. During the 1980s and 1990s, several decentralization pilots gave certain public universities more flexibilities in the areas of procurement and capital outlay. In 1996, the Commission on the Future of Higher Education in Virginia reviewed the structure of the state's system of higher education, determined the efficacy of the pilots, and made recommendations based on their analysis of these efforts. In 1998 the Blue Ribbon Commission on Higher Education was established, and in 2000 the commission released the report, “Final Report of the Governor’s Blue Ribbon Commission on Higher Education.” The report offered recommendations for the future of higher education in Virginia, identifying three goals:

  1. Raise the quality of academic and research programs at Virginia’s public colleges and universities;
  2. Keep a college education affordable for students and their families; and
  3. Ensure accountability for the care and use of public resources.
        

But wait, that’s not all! There was even more transparency and public dialogue before the Restructuring Act was drafted in 2005.

In the early 2000s the University of Virginia’s School of Law and Darden Graduate School of Business Administration adopted a private funding model. In 2004, with a nod to the failed 2011 “New Badger Partnership” to convert UW-Madison to a public authority, the Virginia General Assembly took up the Chartered Universities and Colleges Act of 2004. The intent of this legislation was to provide the College of William and Mary, the University of Virginia, and Virginia Tech more autonomy in exchange for less money from the Commonwealth.

However, the legislation was tabled. Why? Because in 2004 Governor Warner convened a series of six town hall-style meetings around the state that offered new perspectives and fresh ideas. Also, numerous and substantive meetings were held, which included the Council of Presidents, Virginia’s Business Higher Education Council, Governor Warner, members of the General Assembly, and others.

Ultimately it was agreed that the Commonwealth needed to first describe ways that Virginia’s public colleges and universities would serve the state’s needs. That led to action in 2004 when the General Assembly approved Senate Joint Resolution Number 90, “Establishing a joint subcommittee to study the administrative and financial relationship between the Commonwealth and its institutions of higher education.” The Chartering Universities and Colleges Act of 2004 was dead. The governor, General Assembly, and leaders of Virginia’s public colleges and universities agreed to table the chartering act and instead focus on crafting, modifying, and approving the Restructuring Act.

Five Lessons for Wisconsin

There are at least five lessons that Wisconsin should consider before reviewing, amending, tabling, or voting for or against the UW System public authority as proposed in SB/AB 21. First, before the Restructuring Act was a gleam in the eyes of the governor and the General Assembly, the narrative went through an “evolutionary process” (Couturier, 2006), which took place over several decades before the Restructuring Act of 2005 was drafted and approved. See above.

Second, the Restructuring Act created three different levels of autonomy and associated flexibilities, and they were granted to individual campuses all of which had strong campus advisory boards. The General Assembly still retained some authority, such as limiting appropriations for institutions that raised tuition beyond a certain point. The UW System does not have equivalent institutional boards that are held accountable to the state, but instead it is run by a centralized Board of Regents. A potential reason why the Restructuring Act was effective was that the authority and associated flexibilities flowed to the colleges and universities, not to a centralized system and board.

Third, the Restructuring Act only offered autonomy to colleges and universities that agreed to the state’s higher education goals. Virginia’s higher education goals were crafted into a resolution that had to be approved by every college and university board. Once colleges and universities approved the resolution, it triggered the beginning of the autonomy and accountability process. To receive different levels of autonomy, SCHEV needed to certify institutions had met or exceeded the state’s stated goals.

Below are the institutional performance standards for which colleges and universities had to share data with SCHEV in order to be granted autonomy through the Restructuring Act:

  1. Institution meets 95 percent of its in‐state enrollment targets
  2. Enrollment of under‐represented populations
  3. Institution meets 95 percent of its projected degree awards
  4. Average need‐based borrowing
  5. Percentage of need‐based borrowing
  6. Degrees conferred in high‐need areas
  7. Programs reviewed under the criteria of Southern Association of Colleges and Schools
  8. Degrees conferred per full‐time faculty
  9. Average progression and retention rates
  10. Undergraduate degree awards per FTE enrollment
  11. Increased number of transfer agreements
  12. Increase in degree‐qualified transfers (four‐year)
  13. Dual enrollment of high school students (RBC and VCCS)
  14. Institutional commitment to economic development (survey)
  15. Research expenditures (three‐year average)
  16. Patents and licenses (three‐year average)
  17. Enhanced participation and cooperation in K12 (survey)
        

The fourth lesson, closely linked the third, is that the Restructuring Act granted colleges and universities autonomy only if they remained accountable and committed to their public missions. Institutions that provided more evidence of meeting the state’s goals received higher levels of autonomy: Level I was the lowest and Level III was the highest level of autonomy. Campuses with Level I autonomy received minimum operational authority; Level II offered institutions operational autonomy in capital outlay, procurement, and informational technology; and Level III added autonomy over human resources and finance.The approach was simple: autonomy only through accountability. Checks and balances.

Finally, Virginia Governor Mark Warner (now U.S. Senator Mark Warner) worked to develop consensus among legislators, college and university presidents, and the business and civic communities before crafting the Restructuring Act. As stated earlier, the Commonwealth moved from offering three universities charter status, to developing higher education public goals, to crafting and adopting the Restructuring Act.

The Wisconsin Experience: Lack of Transparency, No Checks and Balances, and No Public Dialogue

The idea of UW System public authority was shrouded behind closed doors. The public first learned about the proposed $300 million UW System budget cut and public authority idea in a January 26, 2015, AP article by Scott Bauer. At that time, the public was in the dark on what role, if any, UW System and campus leaders played in creating or providing feedback on the proposal. The public did not learn more about the role UW System and campus leaders played until the Wisconsin State Journal obtained emails under Wisconsin’s open records law. A February 11, 2015, Wisconsin State Journal article uncovered the fact that UW System President Ray Cross convened a closed-door meeting on January 5th to tell faculty leaders and chancellors about the impending budget cuts and authority proposal. The article details several provocative ideas that were discussed, such as transferring some UW System power to the colleges and universities, folding UW-Extension back into UW-Madison, and coupling the 13 two-year colleges to partner four-year campuses.

Virginia and Wisconsin could be viewed as polar opposites in their approach to higher education policymaking. The last time Wisconsin established a bipartisan, blue ribbon commission focused on the future of Wisconsin’s colleges and universities was in 1969, when then Governor Warren Knowles created the Governor’s Commission on Education. This led to the 1970 report, “A Forward Look. Final Report of the Governor’s Commission on Education” (commonly referred as the Kellett Commission) and played a critical role in the approval of Chapter 100, Laws of 1971, which mandated the merger of Wisconsin’s two systems of public higher education to form the University of Wisconsin System. Finally, to find a comprehensive report on the future of Wisconsin’s public colleges and universities you would have to go back to the 1948 University of Wisconsin report, “Committee on University Functions and Policies: First Report.”

In Wisconsin there was a more recent effort, to comply with 1993 Act 16, that created the Commission for the Study of Administrative Value and Efficiency (commonly referred as the SAVE Commission). However, the SAVE Commission’s focus was not exclusively on the future of Wisconsin’s public colleges and universities. In 1995 the SAVE Commission released the report, “Wisconsin: Citizen, Community Government, the 21st Century,” which recommended 22 goals, three of which related to higher education: Goal #3 (new Wisconsin Idea), Goal #9 (the knowledge economy), Goal # 10 (lifelong learning), and Goal #13 (University of Wisconsin System). Most of the 22 goals were not implemented.

The three critical themes that emerged from Virginia's higher education reform efforts were transparency, thorough and objective analysis, and significant public debate and openness to change. With these themes in mind, I recommend the following for Wisconsin.

Recommendations

  1. Withdraw the UW System public authority from AB/SB 21. The conversion of a state agency to public authority status is highly complicated, confusing, and has many moving and interrelated parts. The UW System is not at all equivalent to the UW Hospital and Clinics Authority, which was created through 1995 Wisconsin Act 27 (in the 1995-1997 Wisconsin biennial budget). The proposed UW System public authority would be a transformative change and deserves time beyond the biennial budget process. The decision should not be made behind closed legislative chamber doors in the middle of the night.
        
  2. Create a bipartisan, blue ribbon commission composed of diverse members to conduct a thorough analysis of the impact of converting the UW System to a public authority and submit a report within 12 months to the governor and legislature.
        
  3. Following the report from the commission, the legislature and governor can make an informed decision on whether to draft a piece of legislation which offers the UW System public authority status. The importance of the topic requires no less than a thorough analysis and public scrutiny.
        

What are your thoughts? Please comment using the form below or email us.

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9 comments

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  1. PDQ
    3-2-2015
    It's also important to note that the University of Virginia is not the land-grant campus in that state.  We need to explore implications of the public corporation on land-grant status and whether the governing body will continue to accept and match federal funds including Smith-Lever.

  2. UW Professor
    2-20-2015

    Very nice work, Dr. Radomski. 

    This treatise needs a much broader readership than UW Faculty. How do we get this on the radar screen of the legislature, and also the general public? 


  3. Dennis Shields
    2-18-2015

    Couple of thoughts. It is true that it would be useful to have a longer conversation with all stakeholders about the purpose and shape of greater autonomy for the University of Wisconsin System and its various institutions. "Autonomy" and/or "flexibility" should always come with accountability. Stakeholders need to know the "what" (goals, expectations, outcomes etc. that are expected) and understand the "how" is then left to the System and/or institutional leadership. In the end measuring the success towards achieving the "what" is what the leadership has to be held accountable for.

    Second, I wonder if we really understand what can be gained/lost by the proposed authority model. Many of the what institutions like mine need is support of our efforts at greater efficiencies in capital projects and procurement. These may well be accomplished by less dramatic a step than creating an authority. I think good work was done by the flexibilities task force of a few years ago, but almost none of its recommendations were implemented by the DOA.

    Finally, I think correctly, the post separated the proposed budget cuts from the proposed authority. One has next to nothing to do with the other.


  4. irv herman
    2-18-2015
    Seventeen institutional performance standards ... less than half of the 43 accountability reports UW System supplies to the Wisconsin Legislature each year. Call your local representative or senator and ask how many accountability reports his or her office receives from UW System. See how many know the answer. If they don't know the answer, what does that say about their ability to effectively manage the UW System.  

  5. Richard Grusin
    2-17-2015

    Thanks for this.  I have been blogging for the past month about the dangers of the public authority.  You make a very strong case for the need to think it through much more carefully and thoroughly than this reckless budget bill.  

    https://ragmanscircles.wordpress.com/


  6. Ruth A. Meacham
    2-17-2015
    I strongly support your recommendations 

  7. hc
    2-17-2015

    Another reason to not be excited about public authority status

    http://www.jsonline.com/news/statepolitics/walker-appoints-treasurer-of-political-committee-uw-hospital-board-b99447133z1-292285861.html


  8. Jeff Hamm
    2-17-2015
    Thank you, Noel!!

  9. Tod Massa
    2-17-2015

    I would make few nit-picky corrections of fact and nuance that don't change your arguments, but simply highlight some of the differences.

    1) First, the boards of the public four-year institutions and the VCCS are not advisory boards, but governing boards. 

    2) "Below are the institutional performance standards for which colleges and universities had to share data with SCHEV in order to be granted autonomy through the Restructuring Act," well, in fact, those were the measures IPS had in place initially. There have already been two rounds of changes. A more important distinction from the quoted material is that institutions were already in mandatory, student-level data collection and by and large were not required to do any "new" sharing of data. Further, the enrollment projections and degree estimates have their own existence in state law, and thus I simply suggest the data picture is more complex than what you present. 

    3) Level II institutions were able to choose two areas of autonomy to pursue out of six. All the initial institutions chose those you listed, there were differences in later institutions. Further, Level II and III institutions picked up additional performance measures in exchange for the additional autonomy.

    4) Most importantly, none of what happened in Virginia has changed the churn in funding and the constant jockeying for dollars and position. Nor did it stop the 2011 higher education reform act under Governor McDonnell.

    You are absolutely correct on the long evolutionary process that has occurred in Virginia. It continues to occur, and probably will for some time to come.


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