Archive for Wednesday, January 19, 2005

KU cool on push for privatization

Virginia ‘revolution’ no cure for school budget, officials say

January 19, 2005

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Higher education officials in Virginia have had enough.

They've seen their support from the state erode in recent years while oversight and administrative restraints have remained in place. So they're asking the Legislature to cut back even more on state spending -- in exchange for fewer restrictions.

Some see the proposal as a step toward privatization of the state's top three universities.

Kansas University officials also have been frustrated by eroding state support over the years. But they are combating the problem mainly behind the scenes, through negotiations rather than high-profile legislation.

"If we keep down that road of reform and not with a revolution, we have a lot of progress to make, but we can continue meeting the same goals," said Lindy Eakin, vice provost for administration and finance at KU.

The Virginia proposal under consideration by that state's legislature would affect three schools -- the University of Virginia, the College of William & Mary and Virginia Tech. The schools would forego up to $15 million of their state appropriations, or 4 percent, in exchange for the right to determine their own tuition rates and bypass state regulations for building and hiring.

The state support represents less than 10 percent of the Virginia schools' overall funding.

KU also has seen shrinking public support as a percentage of total funding. In 2001, for instance, the university's general fund budget came 63 percent from the state and 37 percent from tuition. This fiscal year, it's 53 percent from tuition and 47 percent from state funds.

When endowment, research and fees such as housing are included, the state contributes only about 33 percent of KU's budget.

Allyson Stock, a Topeka freshman, pushes a load of clothes up to
her room at Ellsworth Hall. KU students began moving back into
residence halls Tuesday for the first day of the spring semester,
which begins Thursday. Though KU officials seek ways to improve
state funding, they're not interested in the call for privatization
made by three Virginia schools.

Allyson Stock, a Topeka freshman, pushes a load of clothes up to her room at Ellsworth Hall. KU students began moving back into residence halls Tuesday for the first day of the spring semester, which begins Thursday. Though KU officials seek ways to improve state funding, they're not interested in the call for privatization made by three Virginia schools.

Eakin said while there were administrative restrictions KU was continuing to work on loosening, he didn't think it was worth giving up any of the $136 million in state funds KU receives yearly. And unlike Virginia, state universities and the Board of Regents in Kansas can raise tuition rates to pad a relatively stagnant state budget.

"I don't think it's gotten to the point we'd ever sever the relationship with the state," Eakin said.

Making progress

KU, as well as other universities and state agencies, have made headway in recent years in eliminating some of the state's administrative processes. Most of the changes have come from discussions with the state Department of Administration.

The changes:

  • Allowing the university to seek bids on printing jobs under $5,000, instead of using the state printer.
  • Allowing KU to purchase items up to $25,000 without going through the state purchasing processes. Previously, the limit was $10,000.
  • Eliminating some state architectural fees.
  • Eliminating state audits of some university inventories.

"When possible, we're reducing administrative redundancies, which is at the core of what the Virginia equivalent of the (Kansas) Board of Regents is pushing for," said Caleb Asher, spokesman for the Department of Administration. "We've been trying to cut the red tape when possible."

More to do

But that doesn't necessarily mean KU and other state universities are making large strides toward privatization.

Christopher Morphew, an associate professor of teaching and leadership who studies higher education issues, said plenty of state oversight remained. For example, state approval is still required to add or cut degree programs or change admissions standards. And their performance agreements, which are in the process of being implemented in Kansas, reward universities for meeting certain goals.

This spring, KU also is asking the Kansas Legislature to exempt its classified employees from the state's civil service system and to retain interest revenue from tuition. Those are two new areas for expansion of local control.

With the University of Virginia pursuing a $3 billion capital campaign, Morphew said, it's apparent the university can support itself and afford a state budget cut. The recent KU endowment drive, meanwhile, raised only around $600 million.

"Would it be good for KU to get out from some of these things? Sure," Morphew said. "But for (Virginia), there's more reward for them and less risk."

So while KU's budget may look more like that of a private university over time, there are no plans to use the Virginia model in Kansas.

"I don't think we're interested in going private," Eakin said. "We're serving the state. Clearly we're a state university."