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More Autonomy Possible for Virginia Public Colleges

February 28, 2005

Bills passed by Virginia’s General Assembly would give greater autonomy to the state’s public higher education institutions in exchange for comprehensive six-year plans detailing the institution’s academic, financial, and enrollment plans. The plans must be updated every two years. Under the complex bills, management decisions in areas such as purchasing, personnel, and facilities construction could be passed to the colleges and universities.

The new legislation, passed in late February, is a revision of an earlier proposal by three of Virginia’s state institutions – Virginia Tech, the College of William and Mary, and the University of Virginia – to rewrite their charters to create a new class of institution charged with managing its finances and operations through its board rather than through  state control. The “charter” envisioned more flexibility on the part of boards to control the revenue side of the operation through tuition policy.  In exchange the institutions were willing to commit to certain statewide goals and give up a portion of incremental state funding.  The new bills expand the proposal to incorporate all the public institutions in Virginia with three levels of autonomy accompanied by eligibility criteria and performance measures.

A continuing commitment from Virginia’s public colleges to adhere to their public missions is stressed. In order to be eligible for restructured financial and operational authority outlined in the bills, each institution’s governing board will need to formally commit to meeting a number of state goals delineated in the legislation. The new six-year plans required of the institutions would also be structured in accordance with these goals covering access, affordability, timely graduations, articulation agreements, breadth and quality of academic programs, economic development, and cooperation with elementary and secondary schools.

Financial planning in the six-year plans would reflect assumptions for various levels of state support, and would include prospective tuition and fee levels. Many hope that such plans will allow for more regular and rational tuition increases, rather than the alternating tuition freezes and spikes the state has experienced in the last decade. Institutions would also be required to commit to conducting their business affairs “in a manner that maximizes operational efficiency, contributes to economies for state government as a whole, and meets the financial and administrative management standards” in effect for public institutions.

The State Council of Higher Education is also given new responsibilities to develop objective measures of institutional performance and appropriate benchmarks for those measures. The State Council will then be charged with assessing each institution’s performance annually. Institutions that have met the performance benchmarks will be entitled to certain incentive benefits spelled out in the legislation, such as earning interest on tuition and other revenues, and the ability to carryover unexpended appropriations to the next year.

Under the recently passed bills, three levels of autonomy would be available to each institution, each level requiring additional criteria to be met, and in some cases detailed management agreements to be negotiated and signed between state government leaders and the institutions’ Board of Visitors, as governing boards are known in the Virginia system, and approved by the legislature. The highest level of autonomy would require such criteria as a minimum AA- bond rating (or equivalent) in the past five years.

The bills, which are now identical, await the signature of Governor Mark Warner.