2007 State Governance Action Report

Welcome to the Ingram Center’s State Governance Action Report. Compiled in this report are state policy developments, including legislation, commissions, and studies, affecting the structure, responsibilities, and operations of public higher education governing boards and institutionally related foundations.

Governance and governance-related issues are at the forefront of higher education policy debates in several states. And if the states’ fiscal outlook continues to sour over the next year, as early warning signs from groups such as the National Conference of State Legislatures indicate, then higher education governance may become even more of a target for change by state policymakers. State-level governance restructuring may be seen (oftentimes, incorrectly) as a means to greater efficiency. It also may be seen, however, as a way to increase secondary and post-secondary collaboration and enhance the state’s higher education policy capacity in order to address several other issues on the state’s public agenda. Higher education institutions also may see a downturn in the economy as a viable means to achieve greater fiscal and management autonomy if state support of public higher education is subject to budget cuts.

Some boards, particularly those with statewide responsibilities, have made addressing state needs an internal priority. The University of North Carolina Board of Governors, for example, created the University of North Carolina Tomorrow initiative to study future challenges facing the state and how the university system and its 16 campuses can address those challenges. The Florida board of governors, the statewide governing board for all the state’s public universities, focused on the future of the Sunshine State when it commissioned a consultant to create a blueprint for higher education. The blueprint’s proposed radical changes in the university structure were the subject of widespread criticism and discussion. Yet, the blueprint was a reasonable attempt to match the aspirations of Florida’s universities with the fiscal constraints and needs of the state.

Ethics was also a focal point in some states, as improprieties at the University of Medicine and Dentistry of New Jersey (UMDNJ) and Alabama’s two-year college system led to the evaluation of governance at both institutions. A court-appointed federal monitor uncovered numerous financial problems at UMDNJ, which led to the legislature increasing the size of the board and requiring it to develop a code of ethics. The legislature also created a separate board of trustees to oversee the university’s hospital in Newark. In addition, New Jersey Governor Jon Corzine made ethics a priority, issuing an executive order in 2006 with strong conflict of interest requirements for all public college and university governing board members. In Alabama, several administrators were forced out over charges of nepotism and money laundering, and ethics education was required of all administrators and staff. The issue of board ethics has been a concern of AGB’s Ingram Center as well, as we are finishing an analysis of recent state ethics policies to be released this fall. The 2006 elections provided an opportunity for substantial changes to higher education governance in several states through both ballot initiatives and governor’s races.

Changes in board member appointment processes were on the 2006 ballots in Nevada and Hawaii. A constitutional amendment in Nevada would have provided for gubernatorial appointment of most members of the statewide board of regents, but failed to gather enough votes. (The board is currently chosen in the general election). The legislature has started the amendment process again in 2007, passing a similar but improved amendment that will go to the voters in 2010 if passed again in the next legislative session. A constitutional amendment did pass in Hawaii to create a candidate advisory council to advise and assist with appointments to the statewide board of regents. Enabling legislation outlining the composition of the advisory council passed in the 2007 legislative session, but it was not without controversy and passed over Gov. Linda Lingle’s veto. This year, Massachusetts and Minnesota also underwent changes in board member appointment processes.

Several governor’s campaign platforms and initial actions also addressed the importance of higher education governance. Gov. Ted Strickland of Ohio was successful in his legislative efforts to make the chancellor of higher education a cabinet-level position. The board of regents, the state’s higher education coordinating agency, previously selected the chancellor as its head, but the bill enacted this year made the chancellor a gubernatorial appointment and changed the board of regents so that it is an advisory board to the chancellor. Gov. Deval Patrick of Massachusetts created the Readiness Project to improve K-16 education and included in the project a proposal to offer free tuition at the state’s community colleges. Shortly after announcing the project, he added a review of the University of Massachusetts System, including structure and campus interaction, to the project’s agenda in the wake of proposals to change the operations of the system.

TABOR amendments (the “taxpayer bill of rights” first enacted in Colorado) were on the ballot in three states in 2006. Statutory TABOR language was also introduced in three state legislatures in 2007. The amendments and bills would have imposed strict limits on state spending, but failed in all six states. Despite the defeat, backers are likely to try to get TABOR on the ballot or on legislative agendas again in 2008.

As always, tuition is a hot political issue for state policymakers. The Maryland General Assembly and new governor Martin O’Malley extended what had been a one-year tuition freeze at the University System of Maryland another year after major tuition increases and budget cuts in the early part of the decade. Legislatures in Minnesota, Missouri and Washington did not go so far as to freeze tuition, but imposed limits on tuition increases or asked boards to limit increases as a condition of their appropriations. By far, however, the biggest tuition fight was in Florida, where the issue of tuition-setting authority between the board of governors and the legislature was ignited this summer when Gov. Charlie Crist vetoed the legislature’s 5 percent tuition increase at the state’s public universities. Former governor Bob Graham and others sued the legislature, arguing that the statute giving legislators power over in-state undergraduate tuition conflicted with the constitutional authority of the board. The board of governors joined Graham’s lawsuit shortly after it was filed. In a separate move earlier this spring, the legislature granted the board authority to establish tuition differentials for some of Florida’s public universities. Continued tuition freezes and fights over tuition like that in Florida will likely intensify if many state’s budget forecasts hold true and resources for higher education tighten in the next few years.