2008 State Policy Developments Overview

The slowing national economy has headed the news, but the effect on states has been just as profound. Almost half of the states are facing budget cuts in the upcoming year, and many of them have already undergone mid-year budget tightening to address shortfalls as revenue collections have failed to meet expectations. Given public higher education's reliance on state support, universities in some states facing severe budget problems (Alabama, Arizona, and Florida, in particular) are coping with substantial reductions in their operating budgets.

Despite tight budgets, governors across the country have ambitious plans for higher education. Their state-of-the-state speeches have emphasized the role of public higher education in creating jobs and spurring economic growth, training workers for an evolving economy, and increasing the educational attainment of state residents. In their speeches, governors asked more of governing boards and higher education leaders in such areas as improving transfer rates from two-year to four-year institutions, opening doors for non-traditional students, and integrating higher education and secondary education.

Some governors, such as Ted Strickland of Ohio and Deval Patrick of Massachusetts, have been implementing reorganization plans for higher education this spring that were part of their early legislative priorities. Others, namely Bob Riley of Alabama and Bobby Jindal of Louisiana, have sought to impose additional ethical requirements on higher education leaders, although both struggled in their efforts. AGB has also been active in the discussion over the ethical responsibilities of board members, releasing The New Ethics of Trusteeship, a report on the new fiduciary expectations of public college and university trustees.

Legislatures have been actively engaged in higher education governance as well. The Louisiana Legislature has demonstrated a willingness to consider ceding control over tuition to university boards this session, and the New Jersey Legislature has introduced proposals to improve accountability at public colleges and universities. However, political gamesmanship and power struggles are inescapable at times, as is evidenced in Florida. There, key legislators attempted to radically alter the governance structure of the State University System as a result of a dispute with the Board of Governors.

A willingness to work together in Massachusetts drove Gov. Patrick's reorganization plan to strengthen the presence of the executive office in higher education governance, as it passed with the overwhelming support of the legislature. The plan creates a secretary of education with broad powers and provides the governor with control over the appointment of the chair of the University of Massachusetts Board of Trustees, a unique power for a governor.

In Ohio, Gov. Strickland's new chancellor of higher education released his ten-year strategic plan for the newly named University System of Ohio. The plan calls for offering more degree programs at regional campuses to provide lower cost options closer to home for students. The plan also seeks to provide more avenues for students to receive college credit and suggests a significant funding increase from the state for higher education.

Funding higher education is not just an issue in Ohio though. Several states have been working on how to counteract reductions in state support or fund increasing demands for access to higher education without resorting to major tuition increases or eliminating state scholarship programs. California, long a leader in low-cost, high-quality higher education, has seen one funding proposition for community colleges fail at the ballot this year and currently has a second proposition in the signature-gathering phase. That student-led proposition would create an additional tax on incomes over $1 million, with revenues to be divided between higher education and K-12 education.

Two other states with low tuitions, Louisiana and Florida, are addressing responsibilities for setting tuition. The Louisiana Legislature, which controls tuition at state colleges and universities by requiring two-thirds legislative approval for any proposed tuition increase, is considering a much-needed change to allow governing boards a trial run at setting tuition. It is also considering allowing Louisiana State University to charge a supplemental student operations fee to improve the university's financial health.

Florida, which already allows some universities to charge a supplemental fee through its tuition surcharge program, expanded the surcharge program this spring to allow additional universities to increase tuition above the base rate. It is also still in the midst of a bitter battle between the Board of Governors and the legislature over tuition-setting authority. In response to the board's suit to gain control over tuition-setting authority, state legislators introduced a bill to effectively abolish the board and place oversight responsibilities in an elected secretary of education. The proposal had substantial early momentum as it easily passed the Senate, but stalled in the House.

However, the Florida Legislature did pass legislation this past session to expand access in a cost-conscious fashion by creating the Florida College System under the oversight of the board of education to oversee the continued expansion of two-year institutions offering four-year degrees in workforce-related fields. In contrast, California is addressing the issue of community college success by considering legislation that would launch a pilot project to improve the transfer rate of students from the community college system to the university systems.

Other states have also recently focused legislative efforts on community colleges. Wyoming governor Dave Freudenthal created a blue-ribbon panel on community colleges last year that resulted in legislative changes concerning oversight and coordination this year. The West Virginia Legislature acknowledged the unique mission of community colleges this past session by changing their governance structure, as some community colleges in the state had long shared governing boards with four-year institutions. The legislature provided each community college that shared its board with a four-year institution its own governing board this session, noting that two-year and four-year institutions have different missions. The legislature also approved Vision 2020, a plan to prioritize objectives for higher education, improve accountability, and create goals and a blueprint for achieving them by 2020, all in an effort to improve workforce quality and educational attainment of the state.

New Jersey is also addressing the issue of accountability, but is doing so in response to a state watchdog report that highlighted concerns at state universities. Active legislation focuses on financial accountability and audits, empowering the Commission on Higher Education to create and enforce standards. Among other components, the legislation requires an institutional board committee to oversee professional services contracts and provides the commission with oversight of universities' facilities plans.

Ultimately, states are looking to higher education to drive their success, and Kentucky has been particularly active in that regard. Recently, the Kentucky Council on Postsecondary Education renewed its focus on the state's goal to improve the quality of life of its citizens through the release of its Double the Numbers plan and accompanying Project Graduate. The plan seeks to double the number of college graduates in the state over the next 12 years under the belief that the quickest way to improve quality of life is to increase the number of degree holders. The plan is an extension of Kentucky 2020, the state's public agenda for higher education enacted and pursued for a decade. The council has also begun Project Graduate to recruit former students just shy of graduation back to college to finish their degrees. At the same time, the state faced a lawsuit over the political composition of governing boards and controversy over the search for the council's president that threatened to derail progress towards the state's ambitious goals. Although the former issue was effectively resolved, Kentucky is still searching for a full-time council president.

Louisiana and Texas are two other states also working on master plans for higher education, both with AGB's assistance. The Louisiana Board of Regents is nearing conclusion of its new master plan, which was delayed two years by Hurricanes Katrina and Rita. The new master plan is evolving into a major public agenda for Louisiana's public colleges and universities that will likely mean new expectations for the involvement of the four university systems and their boards of Supervisors.

In Texas, the Higher Education Coordinating Board continues to champion the need for progress on the state's higher education plan, Closing the Gaps by 2015. The plan calls for reducing the disparities in the college-going rates between different ethic groups while increasing enrollment by 630,000 students and increasing the number of bachelor's degrees, associate's degrees, and certificates awarded to 210,000 annually. The coordinating board, as well as system and institutional executives, are regularly educating, updating, and orienting the state's governing boards on the plan and progress towards its goals. Governing boards have been increasingly engaged in supporting system and campus initiatives that increase student participation and success, especially for underserved populations.

However, some states have been unable to avoid budget cuts affecting higher education that threaten to derail the success of programs, such as Kentucky's Double the Numbers plan, that require enrollment growth and increased outreach. As states such as Kentucky face tight budgets, institutions and their governing boards will be asked to achieve more with fewer resources. Under these conditions, it is crucial for states to support good governance practices and board members who embody the spirit of citizen trusteeship. Only then can governing boards be effective stewards of higher education and work collaboratively with state legislatures and governors.

Prepared by Greg Ogle, assistant for Policy Analysis, Ingram Center for Public Trusteeship and Governance.