08/21/16: Keeping public colleges public

This op-ed appeared in The Virginian-Pilot on the date shown.

WHEN FORMER University of Virginia Rector Helen Dragas penned her op-ed for The Washington Post last month, I suspected that most would key in on the $2.3 billion so-called “slush fund” that the state’s flagship university has amassed.

But it was something else that caught my eye.

“The University of Virginia,” Dragas wrote, “is slowly being privatized.” During her tenure on the Board of Visitors, an administrative committee was formed “to explore secession from the state,” according to Dragas. The statement no doubt sent a shiver down the spines of legislators.
Virginia has 15 four-year public colleges and universities. The institutions receive tax dollars to help fund operations and capital improvements, such as the new education building under construction at Old Dominion University at the corner of 43rd Street and Hampton Boulevard. The schools also borrow money, some of which is secured not only by the institution’s revenues but also by the full faith, credit and taxing power of the commonwealth of Virginia.

So although these institutions are legally separate entities from the state, they are financially intertwined. The Virginia General Assembly — which controls the purse strings — is charged with ultimate oversight.

Having a highly rated public university is a source of pride for all Virginians, and particularly so for the members of the legislature. U.Va. is currently ranked 26th among the top universities in the country, according to U.S. News & World Report. Of the 25 ranked higher, only two are public.

But pride is not the only factor. Because U.Va. is public, the legislature can — to some extent — dictate what it must do. In the past, the legislature has put caps on tuition increases, although efforts to limit the number of out-of-state students have generally failed. Legislation that took effect July 1 capped the amount students can be charged in fees that fund athletic programs.

The governor appoints — and the legislature confirms — nearly all the members of the boards of visitors. These boards are charged with the oversight of each institution, essentially acting as an extension of the legislature.
Should U.Va. decide to become a private institution, it would no longer receive state tax dollars. Given that this represented just 5.2 percent of overall funding in fiscal year 2015 — down from 7.6 percent in 2009 — it is no wonder that the university would be exploring this move. Some of the loss in state funding could be recouped in the elimination of the in-state versus out-of-state tuition differential.

Gone, too, would be the interference of the legislature — no more threats of tuition caps or entreaties to admit more in-state students. No more board members who owe allegiance to partisan legislators. No more caps on student fees for athletics.
Even so, privatization would be expensive. U.Va. doesn’t get to just walk away; the university would have to compensate Virginia for all it has done over the last nearly 200 years to help make the school a success. I suspect that $2.3 billion would come nowhere near the amount necessary.

The loss of U.Va. as a public institution would diminish the sphere of influence the legislature enjoys. And if it were to happen, no doubt others would follow. The College of William and Mary, Virginia Tech and George Mason University would certainly be candidates.

More than anything, privatization would reflect a final failure of the legislature’s long-stated commitment to higher education. Despite its ongoing lack of money — funding for higher education represents about 6 percent of Virginia’s general fund expenditures — access to affordable higher education in Virginia remains a priority. At the core of it is keeping the public institutions public.

The fear of privatization is part of the reason the legislature has bent over backwards to allow the 15 public institutions to operate as autonomously as possible. But for a series of reports issued by the Joint Legislative Audit and Review Commission, legislators would have never known about the amount of student fees being charged for athletics or, as was reported in the last of the five reports, that boards of visitors’ members lack influence over institutional efficiency and non-academic spending, and even an understanding of higher education operations or public finance.

While investigating the source of the $2.3 billion fund is important, I think the legislature ought to get a copy of that U.Va. committee report on privatization. Then they can use the report’s findings to craft a solution that keeps it — and others — public.