How Public Universities Are Addressing Declines in State Funding
Public colleges and universities are grappling with diminishing resources, largely because of significant declines in state funding over the years.
The average state is now spending 20 percent less per student than it did at the start of the recession in 2008, according to the Center on Budget and Policy Priorities, a nonprofit research organization. Some public higher education systems are experiencing much deeper cuts.
In response, almost all public colleges and universities have increased tuition while considering other ways to raise revenue, lower costs and maintain high standards.
We asked three top educators about potential solutions to the funding problems: Janet Napolitano, the president of the University of California; Bernadette Gray-Little, chancellor of the University of Kansas; and Clifton Forbes Conrad, a professor of higher education at the University of Wisconsin-Madison.
How have your universities tackled this issue?
Chancellor Gray-Little: Starting about four years ago, we undertook a very extensive review of all business operations at the university, called Changing for Excellence. It is a top-to-bottom review of every administrative process on our campuses, including technology, purchasing and maintenance. We had an external consulting firm come in and make recommendations on how we could be more efficient or even improve the level of quality.
The firm looked at such things as centralizing I.T., being strategic in our sourcing, sharing service centers, changing the way we do maintenance. That has been a very large and very intensive undertaking; it has been quite a trial and challenge.
How much have you saved?
Chancellor Gray-Little: Since it was launched, the university has saved millions of dollars and will continue to save. We’re using some of that for a $350 million project to rebuild and update our science facilities, residence halls, parking utilities, student center and other infrastructure. Besides the savings, we will fund it through growth in enrollment, student fees, support from alumni, friends and business, and privatizing certain facilities such as parking and student housing. This is the first time the University of Kansas has used this public-private partnership model.
What about the University of California?
President Napolitano: I came in toward the end of 2013, and the university had done what it could in the face of a one-third cut in state funding over 18 months. There were layoffs, programs were consolidated and eliminated, and we tried to centralize some shared services to cope with the overall shortfall.
There’s also a whole portfolio of projects under the umbrella called Working Smarter — not just to cut costs but to create revenues. That netted about $655 million.
Can you give some examples of what you did?
President Napolitano: Centralizing payroll; that doesn’t sound very sexy, but it’s huge and complicated. Universities, because of all the different types of funding streams — from grants, from general endowments, from different types of endowments — they’re really complicated. We had 13 payroll systems, and now we are unifying into one system for the entire University of California.
Do you know how much it will save?
President Napolitano: I can’t say that yet. It will be done over the next several years.
Aren’t you worried that state residents will say, ‘Aha! We knew there was all sorts of fat that could be cut from these budgets’ and assume that you don’t need the additional state funding you’re asking for?
President Napolitano: When you run a public institution, you’re always struggling to do more with less. But at a certain point, you don’t do more with less; you have to do less with less. Classes are larger. Housing is harder to get. Students are feeling it.
What else is being done?
Chancellor Gray-Little: We’re looking at online education. We started that about three years ago, as a way to have additional students and additional revenue without having to build larger classrooms. In 2013, we announced a partnership to bring 15 graduate degree and certificate programs online over the next few years. In 2014, the school of education began offering its first course online: its top-ranked special education graduate program. Today, the school of education offers eight online programs, with 600 active students. We expect to add another 150 in fall 2016. Our school of business now offers an online M.B.A. and M.B.A. certificate program.
President Napolitano, the University of California system recently faced criticism for taking in more out-of-state and international students to help raise revenue, as they pay substantially more in tuition than in-state students. Systemwide, of freshmen applicants, 9 percent were out-of-state students and 3 percent international in 1994. The latest figures for 2015 show 19 percent out of state and 16 percent international. And for the top campuses, such as Berkeley, U.C.L.A. and San Diego, it’s higher than that. How do you respond to such criticism?
President Napolitano: If you go back to the darkest days, the Board of Regents and the president of the university basically had three choices. Faced with an almost one-third cut to state support for their core operating budget — the part of the budget that students feel — they could have reduced overall enrollment. They could have continued to raise tuition. Or they could find another source of revenue.
So when you line it up that way, you say they took the most reasonable path to enable the University of California to continue at the level it has always has, to continue to enroll the preplanned numbers of California students and to keep tuition flat.
Are you going to continue to accept increasing numbers of out-of-state students?
President Napolitano: We’ve now capped out-of-state enrollment (which includes international students) at U.C.L.A., Berkeley and U.C.S.D. at where they were in 2014-15.
What about at the University of Kansas?
Chancellor Gray-Little: There has been an increase in international students, but not at the expense of Kansas students. The 2015 class included 6.9 percent international students, the largest percentage in University of Kansas history.
State funding has always gone up and down, but it seems like there’s a fear there won’t be anymore ups in the future — that these cuts are the new normal.
Professor Conrad: What is different here is that this is a very dramatic decline; it’s pretty precipitous and has been going on for a few years.
President Napolitano: I think the notion in this day and age that we’re going to be able to return to the days of yore would be a nice thought, but I don’t think it would be a realistic thought.
So what do you think can be done in the future?
Professor Conrad: The mainstream faculty response has been a culture of complaint. There is anger, frustration, concern about jobs. We need to transcend the culture of complaint and reach out to educate people.
How would you do that?
Professor Conrad: I don’t think we’re addressing the underlying problem. There has been an erosion of the public mission of public colleges and universities in this country. Higher education has become, even in our public universities, a private good. Universities have become divorced from their missions, and we need to reclaim it and communicate that to the public.
What are concrete ways to do that?
Professor Conrad: We can create statewide panels, as Oregon did for a few years, where you bring together legislators, administrators, faculty and students, to look how we’re going to solve these problems.
I think universities also need to reach out much more to their respective communities, especially the non-flagships. We need to be open to breaking down some walls and reimagining creativity in the curriculum as well as in our teaching and learning. For example, disciplines are based on 19th century — economics, political science, sociology — while most of the problems we face in this world require an interdisciplinary curriculum.
While there are real economic reasons for the dramatic cuts to public universities, do you also think part of the problem is that Americans no longer seem to support public funding of higher education in general?
President Napolitano: I think we live in a time where all public institutions are subjected to a lot of skepticism and scrutiny, and universities are not exempt from that. And so in a way, the burden of proof has shifted: It falls much more heavily on us to justify not what we do but what it costs and how much we can charge for it.
