By Jennifer Brown
Denver Post Staff Writer
It’s a far-fetched notion: A state treasure such as the University of Colorado – born in 1877 with the ringing of Old Main’s bell, the fanfare of a brass band and the governor in a horse- drawn carriage – becoming a private school.
But national experts and university leaders say public universities are looking more like private ones every year as state funding shrinks and tuition makes up the difference. A political tug of war over funding is intensifying, igniting debate about whether going to college is a private commodity or a public good.
If CU were truly to become a private school, it would operate without any state support or oversight.
The change would require a vote by the legislature or the public because the institution was established in the state constitution. The university would have to buy its four campuses, worth billions of dollars, from taxpayers or at least work out a lease agreement. And the state would have to relinquish control over tuition rates, building projects and thousands of state employees.
What’s more likely is that Colorado’s public universities would undergo “de facto” privatization. In other words, state funding would slip until the institutions relied solely on tuition and private giving.
“No one has actually proposed, ‘Oh, it’s a great idea to privatize higher education,”‘ said Kay Norton, president of the University of Northern Colorado in Greeley. But “we are becoming more like private institutions without talking about it. Let’s say it out loud and have it be a public-policy decision that we make and not one that we back into.”
State funding for colleges and universities has eroded as K-12 education, Medicaid and jails gobble up the budget. A CU study shows state money for higher education will be almost nonexistent by 2009 if the trend continues.
Colorado ranks 49th among the states in the amount it spends on higher education per full-time student, according to the National Center for Higher Education Management Systems. Colorado spent $3,202 per full-time college student in 2004, compared with the national average of $5,721. The state ranked 47th a decade ago with $3,137.
Colorado State University president Larry Penley warned recently that the university is headed toward privatization if voters don’t pass budget-reform measures on the November ballot. State lawmakers have informally discussed the concept. And the Colorado Commission on Higher Education said privatizing some colleges is possible if Referendums C and D fail.
Referendum C asks voters to let the state keep $3.7 billion over the next five years that would otherwise be refunded to taxpayers under the Taxpayer’s Bill of Rights. It would stave off what some lawmakers predict could be a $400 million cut to higher education.
Its companion measure, Referendum D, asks voters to authorize $2.1 billion in bonds, largely for schools and roads.
Those against the referendums say higher-education officials are tossing out a buzzword like privatization to scare voters.
“I don’t think this chicken-little approach by higher education is going to win them any votes for the tax increase,” said Jon Caldara, president of the conservative Independence Institute.
But those involved in higher education nationally say Colorado’s funding is among the worst.
“I find it curious and sad that while the other states and major industrialized nations of the world are focused on the critical role that their universities play in their future global competitiveness, Colorado political leaders seem intent on disinvesting in this resource,” said Aims McGuinness with the National Center for Higher Education Management Systems based in Boulder.
Higher education is increasingly seen as a private commodity, yet privatizing universities is a politically unpopular idea, said Carl Krueger, a policy analyst for the Education Commission of the States.
“What is happening is public university presidents and officials are thinking, ‘If I’m not getting state support, I shouldn’t be held accountable by the state,”‘ he said.
National higher education experts say there are too many obstacles to privatizing. Of greatest concern is raising tuition so much that college becomes less accessible to poorer students.
Paul Lingenfelter, director of the State Higher Education Executive Officers, said true privatization of Colorado schools is highly unlikely.
“I think it’s a serious concern, but I also think it’s almost unthinkable,” he said.
CU President Hank Brown agreed, saying there are too many barriers. For one, the state says the replacement value, only a portion of the appraised value, of CU’s Boulder campus is $1.4 billion.
“I would hope very much that we would not go to privatization,” Brown said.
Rick O’Donnell, Colorado’s higher education commissioner, said he doubts there is public support for the state to pull out of higher education.
“I don’t think Colorado citizens want to see institutions they’ve helped build over the last 120 years cease to be public institutions,” he said.
UNC could survive as a private university by promoting its award-winning business school, small classes and mountain views, and possibly getting rid of its public-service programs, such as teaching and nursing, Norton said.
But the university would have to immediately double its tuition without state funding and raise it gradually to pay for building maintenance now funded by the state, she said. Eventually, UNC’s $3,837 resident undergraduate tuition could look a lot more like the $28,410 per year the private, similar-sized University of Denver charges, Norton said.
Western State College in Gunnison already has the look of a private school – students from all 50 states and several foreign countries lured to a Rocky Mountain skiing haven and an alumni fundraising arm that’s considerably more successful than a typical, 2,400-student public college, president Jay Helman said. Western State broke ground this month on a $6 million business building, the first academic building at a state school funded entirely with private money.
But Western State still gets about 20 percent of its funding from the state, and without that, its $4,702 tuition would jump dramatically, Helman said.
State funding is what keeps the average yearly tuition at public colleges in the United States near $4,200, compared with about $20,000 for private schools, he said.
Two measures passed in Colorado last year gave colleges more autonomy, but some higher-education officials say it wasn’t enough to make up for shrinking state support.
Granting universities “enterprise status” means less than 10 percent of their money will come from the state and revenues from tuition will not count under limits imposed by TABOR. But schools still must get approval from the legislature and the governor if they want to raise tuition above the rate of inflation and population growth.
Virginia is on the cusp of perhaps the nation’s most comprehensive plan to give public universities more control.
The University of Virginia, College of William & Mary and Virginia Tech offered to surrender part of their public funding in exchange for more power over tuition, employees and building projects. The Restructuring Higher Education Act, expected to win state approval next year, will include all public colleges and universities in the state, said Carol Wood, spokeswoman for the University of Virginia.
The law and business schools at Virginia already are financially self-sufficient.
The law school, which hasn’t received state money for four years, charges $28,000 for in- state students and $33,000 for out-of-state students and has a $220 million endowment, dean John Jeffries said.
CU’s law school dean has considered a similar arrangement if state funds are cut off, but the school would have a hard time attracting the neediest students if it raises tuition dramatically, said dean David Getches. Virginia’s larger endowment makes it possible for the school to pay tuition for academically qualified, poorer students.
CU’s law school charges $14,000 for in-state students and $29,000 for out-of-state students. It has doubled tuition in the last three years to make up for losses in state funding.
In Wisconsin, a former University of Wisconsin president suggested in 2003 that the state turn over its 26 campuses to an independent authority, but the idea didn’t take hold, said Katharine Lyall, UW president from 1992-2004.
Lyall said states should either provide more money for higher education or allow universities to take control of their own finances.
“It can be designed to pursue specified public goals and be accountable for their achievement, or – as at present – we can drift into privatization without a public-policy debate and wake up one day to the loss of a critical asset for pursuing the common good,” Lyall said.
Staff writer Jennifer Brown can be reached at 303-820-1593 or jenbrown@denverpost.com.
