Aug 22, 2010/Booth Newspapers
By Dave Murray
Eric Fingerhut says his goal isn't just to save Ohio money - it's to save Ohio, through an improved higher education.
As University System of Ohio chancellor, Fingerhut is directing the state's 14 public universities and 23 community colleges from autonomy to one system, a move he says will both save money and graduate more - and better prepared - students.
University of Michigan President Mary Sue Coleman answered questions about the university's collaborative research efforts, which include Michigan State and Wayne State universities, during a press conference in July at U-M's North Campus Research Complex.
"We're moving into a global, technical, computer-based economy and the greatest asset we can have is higher education," Fingerhut said. "Ohio has an exceptional set of universities, but the problem is none of those individual assets could compete globally."
While some Michigan universities expressed concern about such a move, the University of Michigan is part of a group calling for the state’s universities and community colleges to do some sharing of administrative costs.
And U-M spokeswoman Kelly Cunningham notes U-M is already involved in cooperative agreements. She pointed out U-M is collaborating with Wayne State and Michigan State in the University Research Corridor, an economic development project to help the state.
The leading group calling for change to the way higher education is run in the state is the influential Business Leaders for Michigan. That group says the state's approach to higher education is inefficient and costly. If the universities are going to remain separate, then they need to work more closely together to lighten the burden on taxpayers.
The group's "Michigan Turnaround Plan" calls for the state's 15 public universities and 28 community colleges to "rationalize" management, sharing some administrative functions, before taxpayers should increase their contribution. The schools have a combined budget of $6.3 billion and serve 446,185 students.
The group's board is a who's who of Michigan's industrial chiefs. It also includes the presidents of both U-M and Michigan State University.
"We're encouraging school districts to share some of their backroom functions, like human recourses and information technology," said Doug Rothwell, the Business Leaders CEO. "There's no reason the colleges can't do that, too. It would create a better system and a lower cost."
Rothwell said Michigan needs a highly educated workforce to escape its economic struggles, and noted the state is 31st in the country for per-capita spending on higher education -- and support is down 10 percent in the last decade.
"Between 30 and 35 percent of the state has at least a community college degree, and that figure is going to need to be around 75 percent by 2020 to 2030," he said. "The push would go hand in hand. The colleges would get more support from the state, but they'd have to show they were doing more to make that money go further by being more efficient."
Rothwell said universities already have demonstrated some desire to lower costs, noting that some U-M employees are paying 30 percent of their health insurance premiums. Grand Valley State University recently froze most salaries and raised employee contributions to health insurance premiums from 13 percent to 20 percent.
College leaders said they don't dispute potential savings exist in collaboration, and they already belong to buying groups that have brought cheaper prices for energy, insurance and technology.
University partnerships include Grand Valley's Michigan Alternative and Renewable Energy Center, a $3.1 million project with U-M to create a wind-data collection structure on Lake Michigan.
State schools have in recent years also made it easier for students to transfer credit from one state institution to another, and nearly 15,000 students looking to complete four-year degrees by taking some of their classes at community colleges, said Michael Boulus, executive director of the Presidents Council, State Universities of Michigan.
"Our motto is 'Collaborate, not duplicate,'" he said.
Part of that motto could be "compete," said Ferris State University President David Eisler, who said autonomy forces schools to look for new course offerings that help their communities and attract students.
"Because we're exposed to market pressures, we can respond to a need," he said. "We're always looking to see where there might be a niche that we can fill."
Grand Valley President Thomas Haas, a former college coach, compares state universities to teams.
"We're competitors and we're going for the win. But when it's over, the two teams shake hands and carry on in a collaborative way," he said.
A Michigan State University leader said the state’s universities thrive with their autonomy. But there also are advantages to California’s system, which operates with large research universities in one system and other state schools under the direction of another, said Steve Webster, vice president for governmental affairs.
“The mission and the needs of Michigan State, University of Michigan-Ann Arbor and Wayne State are so different than the others,” he said. “We’re not allergic to a system. There are upsides. But we think there should be no system, or there should be two.”
But universities don't always avoid the "duplication" portion of the Presidents Council motto.
After Michigan State University announced a medical school in Grand Rapids, Central Michigan, Western Michigan and Oakland all hatched plans to open their own medical schools, which before had existed only at Michigan, Michigan State and Wayne State.
Medical school duplication wouldn't happen in Utah, said William Sederburg. The former Michigan state senator led Ferris State University for nine years and is now Utah's commissioner of higher education, overseeing 10 public colleges and universities.
After working under both types of systems, Sederburg said Michigan would benefit from a centralized approach, saying collaboration in purchasing and other areas saves millions of dollars.
Ohio is ending the autonomy of its public universities and community colleges and moving them into one system. The details:
•When it began: Gov. Ted Strickland in 2007 appointed a chancellor to build a unified system of higher education, linking the plan to economic recovery.
•Total schools: 14 universities, 23 community colleges. (Michigan has 15 universities and 28 community colleges).
•The chancellor: Eric Fingerhut, a former state senator and U.S. representative, serves in Gov. Strickland's cabinet. He is an attorney, a former professor and unsuccessfully ran for governor and the U.S. Senate.
•The process: The chancellor is appointed by the governor and has a board of regents, which approves new course offerings and potential tuition increases. The Legislature appoints trustees to university boards, and trustees select campus presidents.
He said his state's schools have flexibility, but also have oversight to prevent duplication. New academic programs are approved by state regents.
Western President John Dunn sees that as a liability and vastly prefers Michigan's autonomy.
He said Western and the others are planning medical schools because there is a demand for doctors. He said the competition from other universities in the state will maintain high standards.
Dunn said statewide systems create political or bureaucratic roadblocks that prevent schools from making "quick and appropriate decisions."
"If people want to see a system with inefficiencies, redundancy and unnecessary delays, then create a statewide system," he said.
New York leaders - who run what is believed to be the largest university system in the world - say there are advantages to Michigan's autonomy.
"The Michigan universities have an independence, and I wouldn't lose that for the world," said Monica Rimai, senior vice chancellor and chief operating officer, State University of New York.
"Michigan is unique, with the University of Michigan's chartered existence and Michigan State University's land-grant status. There are really two 900-pound gorillas, two world-class universities and that's something most states can't offer. In Wisconsin, it's University of Wisconsin in Madison and everyone else."
Fingerhut, Ohio's chancellor, said bringing their universities under one umbrella made them stronger.
Ohio lost hundreds of thousands of jobs even before the economic meltdown - only Michigan lost more in the last decade - and Gov. Ted Strickland tied improving higher education toward kick-starting the state's economic prosperity.
Under the new plan, the governor nominates the chancellor for the system, subject to legislative approval. The educator has a seat in the governor's cabinet, and the Legislature appoints trustees to the university boards. Trustees select campus presidents. Ideally, all are of common mind, Fingerhut said.
"I can sit at my desk and issue edicts all day, and I realize there are a million people who can slow them down," Fingerhut said. "So we need to have the right balance of people who buy into the vision, and have that balance of local leadership."
In Michigan, such a setup would require constitutional changes. U-M, MSU and Wayne State boards are elected statewide, while others trustees are appointed by the governor with Senate approval.
Fingerhut said he believes demonstrating the system can run efficiently is the way to get lawmakers to open the state checkbook, even in difficult times. The state government contributes about $2.8 billion to the universities.
"The fear was that if we show how we are saving money, they're just going to cut our budget," he said. "But I disagree. Who would you rather give money to? Someone you know will spend it efficiently or someone who is inefficient? I think if we show you we can spend the money well, you are more likely to invest in us and give us more."
A new Advisory Committee on Efficiency, made up of regents, students, faculty and administrators, tracks the savings projects and publishes reports and rankings.
Fingerhut said working as a system also has academic benefits. The end goal is to have more Ohio residents earning degrees.
Universities accept credit from other state colleges, but also offer classes in community college buildings.
"We need to have some lower-cost pathways," he said.
Grand Rapids Community College President Steven Ender said there's merit to the Business Leaders' recommendation, and that schools could do more - without needing a system.
He said the colleges work together largely through their association, and partner to improve their chances for large federal grants.
"The big question is, how do we get that conversation going?" he said. "Maybe it has to start at the board level."