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Chartered universities would improve education, quality of life

January 30, 2005 1:09 am

BLACKSBURG--After reading the commentary by University of Vir- ginia professor Jeffrey Rossman ["Charter initiative would harm students, parents, employees," Jan. 2], I worry that your readers may be even more confused about the chartered-university legislation than before.

The primary reason this proposal for improving the quality of Virginia's colleges and universities has come forward is to provide more and better opportunities for our residents.

People are clamoring to gain admission to Virginia schools, including the three universities proposing this new relationship, because of quality. And quality costs.

The concept is admittedly complex. And opponents have attached themselves to one facet or another. One can deconstruct or attack the separate points but, in the end, the proposal has been designed to enable schools to be managed like institutions of higher education, not state bureaucracies. (Bureaucracies have a purpose, but they are quite different from universities.)

Let me address a few of professor Rossman's arguments. He contends that institutional employees will have less protection under the charter plan. Phooey. There are no guarantees, and none currently. Over the past decade:

State employees went several years without a pay raise.

The state has twice reduced compensation by raising medical insurance premiums.

In the early 1990s, the state significantly reduced retirement benefits for the more than 7,000 faculty members who don't participate in the Virginia Retirement System by reducing annual contributions by almost 2 percent. That amounts to a lot of money over a lifetime of work.

Forget the guarantees.

Luckily for faculty members like Rossman, U.Va. was able to provide faculty salary increases larger than those authorized by the state because it had the financial capacity to maintain competitive salaries. By law, it could not do the same for staff employees. The charter plan would allow that.

Tuition would be less volatile under the charter system because, over the long run, the universities would be less dependent on the state for the lion's share of operating costs.

Thus, they would be less susceptible to the vagaries of the political process and swings in state funding. The charter plan would help stabilize tuition and enable long-term planning for families. Tuition has risen 67 percent over the past five years at U.Va. precisely because it is still heavily dependent on state funding and concomitant reductions.

It is interesting that charter opponents like Rossman argue for guarantees for financial aid, tuition, or employee benefits, yet no such guarantees now exist under our current structure. However, the charter agreements would, indeed, spell out in detail the accommodations schools plan to make, such as increasing enrollment, increasing community college transfers, or boosting financial aid.

Rossman argues for a rainy-day fund to offset losses in state funding during bad revenue years by setting aside 1 percent of tuition revenue. Nice thought, but look at the numbers: At Virginia Tech, that would amount to about $1.5 million per year. In fiscal 2002, we lost more than $60 million in state funding. A rainy-day fund would not be a drop in the bucket faced with losses like that.

Moreover, the annual set-aside amounts to a 1 percent loss in operating funds. That would support a lot of faculty positions year after year.

The authorities that we seek for the state schools are not very much different from those already granted in other states. Virginia has a very powerful and controlling central government structure.

Much of the discussion involves arcane "inside baseball" arguments such as whether schools need to get permission from the state to fund and erect buildings not paid for by the state (yes), or whether they keep the interest on bank balances (no).

Virginia Tech established the Virginia Bioinformatics Institute in July 2000. Even using a fast-track method, its state-funded laboratory was not completed for another four years. That's an eternity in the world of science. With further autonomy, we can do better.

The chartered-university concept is based on the belief that well-managed institutions of higher education must be nimble and provided with normal management tools.

Virginia Tech President Charles Steger says: "Universities operate in marketplaces like any other business or institution. The 21st-century marketplace is defined by responsiveness and flexibility. To compete and attract the brightest minds, colleges and universities need to foster entrepreneurial environments to create joint ventures, acquire goods and services, or build new laboratories. Our institutions need to be able to accomplish these key administrative tasks very quickly, just like the most effective businesses. Chartered legislation would provide administrative and fiscal flexibility to state schools to compete in new business-like environments."

We believe the authorities granted under the chartered concept would produce a more reliable funding stream, enable long-range planning, foster more public-private partnerships, boost strategic state economic initiatives, and, most importantly, improve the quality of education and quality of life for Virginians.

LARRY HINCKER is associate vice president for university relations at Virginia Tech.

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