Three Cheers for Quasi-State U.?

THE BALTIMORE SUN

Eighteen months ago, this higher education system was "emerging from the pack" and gaining national recognition thanks to state support and optimistic plans for new programs and healthy growth.

Then the recession hit.

Today, administrators warily hope to return their universities to the functioning levels of 1988, yet further state cuts have forced new hit lists of academic programs, personnel and campus equipment. Even library book orders have been axed.

Sounds like life in College Park and Annapolis these days.

But this is a story about Virginia.

Times are so tough in Richmond that a July report by college and university presidents, the chancellor of the community college system and state higher education officials said that converting state schools like the venerated University of Virginia, George Mason University, the College of William and Mary and Virginia Military Institute into semi-private institutions is possible if "normal" funding is not restored by 1996.

That radical change would result in higher tuitions and would relieve certain areas of campus from restrictive state procurement laws -- all ways to generate revenue and restore deep state budget cuts.

The report suggests legislation that would allow the state's "most prestigious and financially strongest institutions" to give up public status, becoming quasi-private institutions. The Virginia academicians concluded that it may be best to allow the state's institutions to privatize through a piecemeal approach -- an engineering school at one university might go private, for example while other schools on the same campus, less able to survive primarily on tuition revenue, would remain state supported. For those that become private, the bureaucracy of state policies and procedures would evaporate, making more funding available for the schools that remain state supported.

"There would be fewer people at the trough, and the dollars would go further," said Gordon K. Davies, director of the Virginia Council of Higher Education. "We have some universities of national stature and it would be terrible to let them go mediocre. This is not a bluff."

With an almost $2.2 billion budget crisis at hand, Virginia legislators have slashed $600 million from higher education spending since 1990, halting enhancements initiated during the 1980s. To keep pace with an expected enrollment increase of 25 percent by the year 2000, educators estimate they will need $1 billion for capital improvements to classrooms, offices and administrative buildings. About $500 million is needed for operating expenses by 1994.

Tall orders for a state with empty pockets.

The idea to privatize was one of 11 options listed in the presidents' report, a 29-page document that ended with a Declaration of Independence-like signature page by state college and university presidents. Other options include: degrading quality at state institutions, reducing enrollments to match dropping state matching fund levels, tuition hikes and encouraging students to attend community colleges for the first two years of college.

The underlying theme of the report is an urgent need to change the methods by which higher education is funded, Mr. Davies said. States that in the 1980s had so many obligations placed on them by the federal government for roads, prisons and education are now so strapped that many governors and state legislatures are faced with a "worst case premise."

"Our sense is that we may be at a watershed in American education in terms of who pays for American education," Mr. Davies said. "If we don't plan for a marked change, between the distribution in responsibility of students who pay tuition and the state who pays support, we'll have wreckage by the year 2000."

Virginia's tuition increases have averaged 8 percent over the past two years, but could jump 40 percent in a worst-case scenario if requested state funding of $500 million is not granted and tuition becomes the main source of running the 39 state-supported institutions.

If partial state funding is achieved in the state's upcoming two-year budget cycle, the next planned tuition increase could be 14 to 20 percent, Mr. Davies said. This fall, it will cost an in-state student $6,663 per year in tuition, fees, room and board to attend the U of Virginia and an out-of-state student $12,873.

"I think this is happening all over the U.S.," Mr. Davies said. "But Virginia is watching it happen and perhaps trying to take that perspective more than other states."

Maryland's fiscal crisis pales when compared to the problems facing Virginia. But the tom-toms are starting to beat in Maryland higher education circles, where officials are reeling from $84 million in cuts to the University of Maryland's 1991 and 1992 operating budgets, aid to private institutions has been scaled back, and tuition hikes and surcharges are now part of each semester's welcoming mat.

Wednesday's vote by the UM Board of Regents to levy a one-time 15 percent tuition surcharge for the spring semester is the first time the board has asked students to help cover the wounds of the state cuts. But there are more tuition hikes to come. The regents approved a plan to raise tuition at UM's 11 institutions by at least 4 percent next year.

UM Chancellor Donald Langenberg this fall will study plans to merge universities, cut academic programs, furlough employees, freeze hiring and eliminate duplication in many academic

courses. Like the auto industry reacting to the oil shortages of the 1970s, the UM is starting to mold a new, economized model while many administrators soberly watch the momentum ebb from 1988's higher education reorganization.

Officials here, as in Virginia, say there is little hope for a return to the "good old days" when state dollars flowed. The reality check is on.

Could Maryland follow Virginia's lead by considering privatizing certain schools and colleges? Would this be an alternative to Dr. Langenberg's idea to close and merge certain universities and programs?

"It is a notion that needs to be viewed not as a convenient fix for a financial problem, but as a major change in public policy," Dr. Langenberg said. "I think they [Virginia officials] are desperate. . . . It may be that they are serious and want to make the point to get the attention of those responsible. There is considerable evidence that the people still haven't figured out how bad things are.

"There is this enormous bureaucracy that public institutions are restrained by, and the private institutions are not. One may see the state of Virginia can never again support higher education again. That those institutions have to go elsewhere to get money. In Maryland, I don't see it that way.

"Still, there has to be hope and some reason not to despair."

Dr. Langenberg's optimism is tinged with a sense that the system's second chancellor has a rough ride ahead when his downsizing program commences. It is an option that Mr. Davies respects, but has chosen not to follow. He'd rather be a campus version of Paul Revere.

"Obviously we do not know what is going to happen. The decade of the '90s will be an austere decade across the nation. In that austerity, institutions who try to hunker down and ride it out are doomed to erosion," Mr. Davies said. "The prize in this situation goes to the people who are willing to think radical ideas."

M?

Melody Simmons covers higher education for The Evening Sun.

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