New York Times on 'Privatization' of Public Universities

This article ran in the Sunday paper. This touches on many of the issues that I have raised in this blog over the last few months. The percentage of state spending and the spending per student has dropped precipitiously in the last decade. The article focuses extensively on Wisconsin, and our continuing problems. Have we really lost the debate on the public good of higher education? I hope not, but the trend seem to be headed in the wrong direction. . .



I am going to paste the whole thing here so you don't have to go there and register:

October 16, 2005
At Public Universities, Warnings of Privatization
By SAM DILLON

Taxpayer support for public universities, measured per student, has plunged more precipitously since 2001 than at any time in two decades, and several university presidents are calling the decline a de facto privatization of the institutions that played a crucial role in the creation of the American middle class.

Graham Spanier, president of Pennsylvania State University, said this year that skyrocketing tuition was a result of what he called "public higher education's slow slide toward privatization."

Other educators have made similar assertions, some avoiding the term "privatization" but nonetheless describing a crisis that they say is transforming public universities. At an academic forum last month, John D. Wiley, chancellor of the University of Wisconsin-Madison, said that during the years after World War II, America built the world's greatest system of public higher education.

"We're now in the process of dismantling all that," Dr. Wiley said.

The share of all public universities' revenues deriving from state and local taxes declined to 64 percent in 2004 from 74 percent in 1991. At many flagship universities, the percentages are far smaller. About 25 percent of the University of Illinois's budget comes from the state. Michigan finances about 18 percent of Ann Arbor's revenues. The taxpayer share of revenues at the University of Virginia is about 8 percent.

"At those levels, we have to ask what it means to be a public institution," said Katharine C. Lyall, an economist and president emeritus of the University of Wisconsin. "America is rapidly privatizing its public colleges and universities, whose mission used to be to serve the public good. But if private donors and corporations are providing much of a university's budget, then they will set the agenda, perhaps in ways the public likes and perhaps not. Public control is slipping away."

Not everyone agrees with the doomsday talk. Some experts who study university finance say the declines are only part of a familiar cycle in which legislatures cut the budgets of public universities more radically than other state agencies during recession but restore financing when good times return, said Paul E. Lingenfelter, president of State Higher Education Executive Officers, a nonprofit association.

"Let's not panic and say that the public commitment to higher education has fundamentally changed," Dr. Lingenfelter said. "Let's just say that these cycles happen, and get back to work to restore the funding."

But the future of hundreds of universities and colleges has become a subject of anxious debate nationwide. At stake are institutions that carry out much of the country's public-interest research and educate nearly 80 percent of all college students, and whose scientific and technological innovation has been crucial to America's economic dominance.

Margaret Spellings, secretary of education, noted her own worries in announcing the appointment of a national Commission on the Future of Higher Education last month.

"We still have the finest system of higher education in the world," Ms. Spellings said. "But we're at a crossroads. The world is catching up."

The commission, whose first meeting is scheduled for Monday, will explore universities' affordability and competitiveness. Some members argue that universities, by failing to contain costs, share responsibility for the exploding price of a degree.

The average in-state tuition nationwide for students attending four-year public colleges increased 36 percent from 2000-01 through 2004-05, according to the College Board, while consumer prices over all rose about 11 percent.

The Morrill Act of 1862 granted federal land to states to finance the creation of public universities, and one of their core missions ever since has been to provide services that promote the well-being of communities and states. Today, educators using the term "privatization" say universities are being forced to abandon this social compact. In the process, many major public universities are looking more like private ones.

For instance, the University of Virginia and other public universities in the state responded to years of dwindling financing by asking Virginia's General Assembly to extend their autonomy and to reaffirm the university governing boards' authority to raise tuition. Lawmakers granted those requests, said Colette Sheehy, a University of Virginia vice president.

Two years ago, Miami University of Ohio became the first public institution to adopt the tuition model used by private colleges, eliminating the differential between in-state and out-of-state residents.

Across the nation, educators said, public anger is rising not only about tuition but about the increasing numbers of faculty members who focus on research rather than on teaching undergraduates, and about the time that university presidents spend hobnobbing with billionaires. University administrators say all three phenomena are related to the transformation of revenues.

As private donations and federal grants make up a larger proportion of universities' revenue, more professors are paid mainly to conduct research. And as state financing drops, more building projects depend on private philanthropy.

At the University of Wisconsin at Madison, Grainger Hall, which houses the business school, was financed largely by donations from David W. Grainger, chairman of W. W. Grainger Inc., the business-to-business distributor; from his wife; and from the Grainger Foundation. The school of pharmacy is in the new Rennebohm Hall, named after Oscar Rennebohm, whose drugstore chain amassed a fortune. The Rennebohm Foundation financed the building.

"Wisconsin people see all the construction on campus and don't understand why the university is complaining about budget cuts," Dr. Lyall said. "We have this apparent incongruity of building growth at a time when resources for teaching in those buildings are shrinking."

But flagship universities are less vulnerable to financing declines than are hundreds of state-run four-year colleges that do not offer doctoral programs or conduct significant research, said David Ward, president of the American Council on Education, the nation's largest association of universities and colleges. The flagships can replace some state revenues with federal grants and private donations, but the four-year colleges cannot, he said.

"Privatization may be a good description of what is going on at our flagship campuses, but not at our four-years," Dr. Ward said. "They cannot survive without public funding."

Patrick M. Callan, president of the National Center for Public Policy and Higher Education, a nonprofit group, also said he dislikes the word.

"The air is filled with this rhetoric about privatization, but the evidence doesn't support it," Mr. Callan said. He noted that in straight dollar terms, state appropriations for public universities have not fallen much across the nation in recent years. They totaled $67 billion in 2001, $70 billion in 2002, $69 billion in 2003 and $69 billion in 2004, the last year for which nationwide data is available.

But because enrollments surged during those years by more than 1 million students, or 11.8 percent, per-student appropriations dropped more steeply than at any time since the early 1980's, to $5,721 from $6,874, according to the State Higher Education Executive Officers.

Another measure, the average percentage of state tax revenues devoted to public higher education, has declined for several decades. About 6.7 percent of state revenues went to higher education appropriations in 1977, but by 2000, universities' share had fallen to 4.5 percent, according to a study by the Urban Institute.

Stanley O. Ikenberry, a president emeritus of the University of Illinois, says he believes that most state legislatures remain committed to supporting public higher education but that as budgets shrink, it is more difficult to cut programs like Medicaid, public schools and prisons.

"The higher education budget serves as the default place to make the cut," Dr. Ikenberry said. Nonetheless, he avoids the word "privatization," saying, "It's not a productive way to talk about what's happening now, but more a way of describing where we may be heading."