UF, FSU ask for power of purse

By Matthew I. Pinzur Knight Ridder Newspapers (KRT) MIAMI _ Florida’s two largest public universities would be able to raise tuition as high as they want, essentially becoming semiprivate, under a novel budget plan that is gaining support among influential policymakers. If the University of Florida and Florida State University win approval, the Legislature would no longer dictate their annual tuition and spending. The plan would circumvent the political pressure that has kept state rates among the nation’s lowest and give the schools unfettered control of their own budgets. It could also inject uncertainty into the state’s popular programs of Bright Futures scholarships and Florida prepaid tuition. The schools _ which combined enroll most of Florida’s public university students _ said they cannot grow or plan effectively unless they charge more tuition and become more independent of legislative controls. “There is not nearly as much income coming to the university as is needed to operate a balanced program,” UF President Charles Young said. “The institutions which are the peers of UF are, for the most part, raising $50 million, $75 million, $100 million more a year than the University of Florida is.” To take effect, the plan must first be voted on by the Legislature, which is unlikely to take up the issue before its session ends next month. But because it has the support of top lawmakers, lobbyists and Gov. Jeb Bush, it will likely be on the agenda next year. If it were approved, Young and FSU President T.K. Wetherell promised, tuition would be stable in the program’s first year. It is now less than $2,700 a year for undergraduates who are Florida residents. Young said the schools would not commit to capping future increases, but Wetherell said they would consider it. Some higher-education observers fear that without such limits, prices would skyrocket. “Tuition will go out of sight in 10 years, because there’s no limit to what they want to do,” said Stanley Tate, chairman of the state’s prepaid college program. Young scoffed at that concern, saying that each school’s board of trustees would handle the power responsibly. “If you raise it too high, you’ll start sending students away.” Under the plan Young and Wetherell unveiled this month, the schools would sign a five-year contract with the state for a lump-sum payment in exchange for a promise to educate a set number of students. It would be a total reinvention of the current budget process, in which legislators craft the schools’ individual allocations for personnel, programs, construction and research. While a legislator might want to budget money for a sexy project such as an arts center, Wetherell said he needs the freedom to put priority on more mundane buildings for lecture halls and classrooms. If the schools miss the contract goals, they would refund part of the payment and be charged penalties, University of Florida Associate Provost Joe Glover said. Furthermore, the schools would refund tuition to any teaching or nursing student who failed to find a job after graduation _ an attractive promise in a state where schools and hospitals are bracing for shortages. “It provides a bonus for the universities to make sure that the nursing program is as good as it should be, because they have to be able to be employed,” said Senate President Jim King, R-Jacksonville, an FSU alumnus and booster. The plan would also pull the two schools closer to the blurry line separating private and public institutions, Wetherell said. He cited the University of Miami, a private school that has extensive business and educational dealings with public institutions, including the state. By knowing in advance what the budget would be for five years, the presidents said, they could better plan everything from construction projects to development of new programs. Such planning is difficult now because funding for programs is determined from year to year. “We would control our own destiny, as opposed to our destiny being controlled in a 60-day legislative session every year,” Wetherell said. To add accountability, Young said, the schools would also commit to improving certain performance indicators, such as the minority graduation rate and the percentage of students who finish in four years. The price of the contract would be negotiated, but the presidents would start by asking for per-pupil funding at the 2000 rate _ before a round of cuts to the higher-education budget. The presidents estimated that such funding would increase this year’s budget by a total of $35 million to $40 million for UF and $20 million to $25 million for FSU. Despite those increases, Wetherell said, the state would get a good deal in return, because the schools’ funding would not grow for five years, other than basic inflation adjustments. “That’s got to be one whale of a deal for the state,” Wetherell said. The plan is based on a model used by Pennsylvania State University but goes even further by using five-year contracts instead of single-year ones. “Politics plays less of a role,” Penn State spokesman Bill Mahon said of that school’s method. The proposal’s impact on popular Florida financial aid plans, however, may create some resistance. The future of the Bright Futures program, which provides merit-based scholarships to Florida’s top high-school students, is uncertain in the Legislature. The universities’ proposal makes it even foggier. The awards are based on the tuition rates set by the Legislature, which FSU and UF would be able to exceed under their plan. To address that concern, the university presidents have promised to pay the difference for students who demonstrate financial need, but not necessarily for others. Also potentially at risk is the prepaid-tuition program, which lets families lock in tuition rates when they sign a contract and then pay for college as the child grows up. Tate said the program he heads is kept afloat because the Legislature has been fairly predictable in its tuition hikes _ about 7 percent a year. That has allowed program managers to calculate how much to charge for contracts and what level of yield would be needed for the investments that cover the costs of the program. If schools were setting their own prices, Tate said, two problems would emerge: Increases would become unpredictable, and each university’s trustees could raise prices beyond what the program could cover. The plan’s supporters said Tate should be able to adjust the cost of contracts to compensate. But even if that were not possible, they said, the benefits outweigh the risk of killing prepaid altogether. The biggest challenge could be persuading the Legislature to give up its power to set tuition and massage the higher-education budget. “There’s a lot of politicians that just don’t like to give up things that are, in their mind, theirs,” said King, the Senate president. On the other hand, releasing that authority to trustees would free the elected officials from the political flak associated with voting to increase prices, which King said can be intense. Notably absent from the proposal were the state’s nine other public universities, whose presidents were never told about the proposal because, Young said, he and Wetherell wanted to keep the pilot program limited. If it works, they said, other schools could easily join. Many of those nine presidents have reacted with frustration. If FSU and UF receive guaranteed contracts, the impact of heavy cuts proposed for this year’s higher-education budget would be even greater because they would be spread among fewer schools. “It could have a very significant negative impact upon urban public institutions,” said FIU Provost Mark Rosenberg, who otherwise endorsed the idea of creative solutions to the shrinking higher-education budget. “Sure, we’d look very closely at it,” Rosenberg said. “If I could have a level and predictable playing field for the next five years, you’re darn right I would take it.” ___ ‘copy 2003, The Miami Herald. Visit The Miami Herald Web edition on the World Wide Web at http://www.herald.com/ Distributed by Knight Ridder/Tribune Information Services.