Tuesday, December 15, 2009

Interview with Wiewel

The Oregonian interviewed Wim Wievel when PSU released the white paper last week, and it's also worth reading. As a tease, I'll quote the piece that most intrigued/alarmed me:
"Ultimately my model is to have quality education; it's not to have cheap education. Given the conditions we are in, we have no choice but to look at tuition as revenue source. And I think we can be more creative about charging more where the market will bear it and where people have very good earning opportunities in their careers, and then using some of that money to provide financial aid to more low-income students."
Go have a look.

The White Paper

Last week, PSU released a white paper outlining several reforms it recommends to governance. There is much to appreciate and something to worry about, too. The whole report--relatively brief and readable--is available here in .pdf. The six central principles are as follows:
  1. State funding floor: Because state funding has continued to decline steadily, it will be important to stop the hemorrhaging. Establishment of a floor below which funds cannot drop is a logical way to achieve this goal. In exchange, PSU would agree to specific performance and accountability goals designed to ensure the university continues to meet the needs of Oregonians and provide the state a good return on its investment.
  2. Tuition Flexibility: With 28,000 students, tuition plays a very important role in determining what programs and services PSU can offer. With greater local control, PSU could more strategically set tuition levels to reflect both costs and market factors and to provide students greater access to scholarships and other financial aid. Increasing the availability of scholarships and financial aid is essential given the number of economically disadvantaged students attending PSU.
  3. Bonding Authority and Assumption of Debt: With the fastest growing student population of any university in the state system, PSU needs the ability to control capital expenditure decisions and issue its own bonds. It will be important, however, that the state continue to repay existing debt that it has issued on behalf of the University over time. Given the tight financial circumstances PSU has faced over the past two decades, absorbing the old debt would compromise its chances of success. A continued partnership with the state on capital projects of mutual interest will also be important. California has been successful in operating under this model, with the University of California system taking responsibility for issuing the majority of its own debt while having the authority to approach the state to obtain state-backed bonds for projects that the Legislature and electorate have a particular interest in moving forward.
  4. Access to the Ballot for Funding Initiatives: Community colleges in Oregon have the authority to appeal directly to voters for funding support. With state support continuing to trend downward, it is important that PSU have similar access to voters. Remaining a traditional state agency could prove an impediment to success at the ballot, however. In informal conversations earlier this year, metropolitan area business leaders expressed interest in helping PSU achieve its goals, but were skeptical about approving local funding for the University as long as it remains a state agency. Many cited the basis for their concern as past experiences in which the legislature had reduced funding for programs in response to such local initiatives.
  5. Student-based Funding Model – Funding should be based on the number of students educated. OUS’s Resource Allocation Model (RAM), which allocates funding based on a combination of student levels (undergraduate and graduate) and cost adjustments for various disciplines (cell values) is one method for accomplishing this goal. Other states employ simpler models which might be more easily understood. Regardless, the chosen model should be statutorily or constitutionally authorized.
  6. Operational Flexibility – Accountability and responsibility for managing operational functions such as information technology services, purchasing, vendor relations, auditing, financial reporting, personnel and benefits are key to PSU’s ability to function in an efficient and cost-effective fashion. OHSU’s experience is instructive. Since converting to a public corporation in 1995, OHSU has realized significant savings and enhanced revenues through its ability to control operations and act quickly to take advantage of marketplace opportunities. Direct management of personnel matters has also proven valuable to both OHSU and its employees, allowing workplace issues and employee benefits to be addressed in a manner responsive to the unique needs of an academic health sciences environment.
In addition to these points, the paper outlines various models of governance that could accommodate these. The whole piece is worth a read. Huge implications should these get further than recommendations.