More on OUS opposition to Lariviere plan

12/15/2010: Greg Bolt has an excellent summary of the politics of Lariviere’s restructuring plan in the RG. I like the part where the UO Foundation lobbyist calls the argument from OUS Board President Paul Kelly “crazy”. Who appointed Paul Kelly, why does he hate us, and how in the world can he and the OUS board decide to oppose Lariviere’s plan without a meeting and a public discussion?

For some good background on the plan, see this Brent Walth story. While I’m on the topic of Walth, you should read his stories on the OWIN boondoggle – more than $600 million in state funds, mostly wasted. Excellent use of the Oregon public records law. The RG really needs to reprint more stuff from the Oregonian, their own coverage of state matters is just too thin.

OUS board votes against Lariviere plan

12/11/2010: From Bill Graves in the Oregonian:

“We see their position as what is good for the UO with very little consideration for the impact on others in the system,” Kelly said. 

That’s Paul Kelly, the OUS board chair. The guy who happily signed off on furloughs for the staff, raises for the OUS Chancellor Pernsteiner, and Frohnmayer’s golden parachute. Lariviere’s plan is a threat to his power to dole out money and favors, the board’s vote is not a surprise.

Curious about the debate and vote? Too bad – OUS board secretary Ryan Hagemann hasn’t put their minutes online since December 2006. Make a public records request? The minutes haven’t even been transcribed. They fired the person who did that so they could give Pernsteiner a $26,000 housing allowance for Portland, to go along with his state supplied mansion in Eugene.

Kitzhaber has asked for Pernsteiner’s resignation letter – though it’s not clear he will really get the boot, or if there will just be a tough heart to heart. Regardless, it looks like Pernsteiner and Kelly plan to do whatever damage they can to UO in the next few months.

Phil Knight on Lariviere’s plan

12/6/2010: From Alan Brettman in the Oregonian, via Alex Tomchak Scott’s excellent Commentator digest. Worth reading: Knight’s take is that Lariviere wants to privatize UO and raise tuition.

Q: What’s next to elevate the status of the University of Oregon? 

A: I think the athletic department is really the best marketing tool that the University of Oregon has. I think the university’s athletic department has really been upgraded over the last several years. You look at this year and the university has a chance to be national champions in football, women’s track and field, in baseball and in golf. That’s never happened, ever. To continue that is something you’d like to do and I know the president of the university (Richard Lariviere) is trying to upgrade the whole university. In another part of your paper we’re talking about his battles with the Legislature to do that. So, I’m hopeful that’s as successful as well. 

Q: What conversations have you had with Lariviere about next steps to improve the university? 

A: Oh, I talk to him on a regular basis. I spoke with him a couple of days ago. He was mostly talking about — his view is the next step to upgrade the academic side of the university is to get the Legislature to go along with his plan, which is a little bit complicated, but it’s to take a step — I hate to use the word because it’s an oversimplification — but to take a step toward becoming more of a private university. I think the state provides about 7 percent of the funding now, so basically it is a private university that’s hamstrung by public policy. 

Q: What kinds of things could he be able to do if that plan is implemented? 

A: Well, the simplest one is that he can set his own tuition. He’s hamstrung in the sense he can’t charge more tuition than the Legislature will let him do for in-state kids. So he loses money on every state kid that enrolls in the University of Oregon and he makes money on every kid that comes from out of state. So, increasingly, it’s become the University of California at Eugene. That’s the result of the current Legislature’s policies. 

Q: Did Lariviere consult with you before he made his pitch before legislators in October for funding the university with $800 million in state-issued bonds? 

A: He told me he was going to do it. I didn’t have much say. 

SUNY folds on its version of UO plan?

12/5/2010: As we wrote this summer, the university funding/autonomy situation in NY is very similar to that in Oregon. There is even a wealthy donor pushing an autonomy proposal and promising a big donation in return. Of course, if Phil Knight and Howard Slusher have made any promises to UO, they haven’t done it publicly – as SUNY’s donor did, in the NYTimes.

Apparently the SUNY plan was killed by the unions, and in Oregon rumor is that SEIU is at the very best lukewarm about Lariviere’s plan. And, as Steve Duin reports in the Oregonian that the unions are likely to get what they wants from Kitzhaber, at least when it comes to K-12 education:

Five weeks before the governor’s inauguration, education reformers are already lining up to see whether John Kitzhaber 2.0 cares any more about Oregon schools than the original. For many diehards, the early returns are not promising.

Here’s the Chronicle article on SUNY. The money quote: “The Legislature not only rejected all of the proposals, but also cut the system’s appropriations by more than $200-million.”

December 2, 2010

SUNY May Scale Back Top Legislative Priority and Seek Only Limited Autonomy From State

By Eric Kelderman

Rebuffed in her efforts this year to win more autonomy for the State University of New York, the system’s chancellor, Nancy L. Zimpher, is considering advocating a scaled-back approach during the coming legislative session.

In this year’s legislative session, Ms. Zimpher and her staff persuaded Gov. David A. Paterson to include a package of regulatory reforms that the state system argued would allow it to operate more efficiently and would offset the loss of state appropriations. Those changes included giving the system more control over tuition, purchasing, leasing property, and entering into partnerships with private companies.

All of those changes were opposed by the politically powerful union that represents staff members at the 64-campus system. The Legislature not only rejected all of the proposals, but also cut the system’s appropriations by more than $200-million.

Michael C. Trunzo, vice chancellor for government relations at SUNY, said on Thursday that the system would now consider shelving much of the package of regulatory changes and would work to build better relationships with the unions and with lawmakers. Mr. Trunzo spoke at a conference of higher-education lobbyists in Austin, Tex.

Instead of seeking the ability to set different tuition rates for different campuses, for example, the system may propose a regular, moderate multiyear increase in tuition on all campuses. Part of that increase would then be used to increase financial aid for students whose families earn too much to qualify for the state’s Tuition Assistance Plan, he said.

The system would largely abandon the request to enter more easily into public-private partnerships, he said, and instead seek approval for a private housing development for senior citizens on the campus of Purchase College, Mr. Trunzo said.

The previous proposal to free the system from some state procurement rules may be limited to the purchase of goods and exclude contracts for services, he said.

The new proposals have yet to be finalized and must be approved by SUNY’s Board of Trustees in order to go forward, Mr. Trunzo said. And the issues, he added, have yet to be vetted by the unions, whose support will be necessary for the measures to have any chance of passage in New York’s infamously fractious Legislature. “We don’t want a fight [with the unions] as we walk in the door,” he said.

Officials from Ms. Zimpher’s office stressed that Mr. Trunzo was not speaking on behalf of the system and that the specifics of the system’s legislative agenda have not been finalized. 

“SUNY has not shelved anything,” said Monica Rimai, a senior vice chancellor and the system’s chief operating officer. “We are still developing our legislative strategy, and it is premature to suggest that we have decided what direction that will take.”

President Lariviere in WSJ on Restructuring

11/23/2010: President Lariviere has an Op-Ed in the WSJ on his restructuring plan today, here. It’s pretty rare for the Journal to give space to a university President – they usually save it for economists. So I suppose UO Matters can do the same. Here’s the full text:

Saving Public Universities, Starting With My Own 

The solution is an endowment funded by public and private contributions. Here’s how to do it.

Oregonians don’t whine. In the face of adversity, we grit our teeth and carry on. Land use, bottle- deposit bills, beach protection—Oregon has led the nation. But Oregon’s 25- to 34-year-olds are less likely than their parents to have college degrees. We have one of the worst-funded systems of public higher education in America: Oregon ranked 44th in the latest measurement of state funding per student.

The easy response to decades of reduced funding is to simply ask the state for more. But with Oregon expecting a $3.3 billion budget shortfall for the coming biennium and a “decade of deficits,” as Gov. Ted Kulongoski recently put it, asking for more money is futile.

Boldness is a necessity—and we think we have the answer. Our plan is to stabilize the University of Oregon’s financial situation by establishing an endowment funded by a partnership of private and public monies.

Twenty years ago, the state legislature appropriated $63.3 million for the University of Oregon. Our state funding for the current fiscal year has dropped to a projected $60 million. Adjusted for inflation, that’s just $34.9 million in 1990 dollars.

State funding currently makes up less than 8% of the university’s overall budget, while tuition and fees now account for about 40%. A generation ago, state funding per student was twice the amount received in tuition. Because of a dramatic rise in enrollment and an equally dramatic decline in state funding, tuition has increased by an average of 7.5% each year for the past 38 years. But the rise in tuition has been erratic, due largely to fluctuations in state appropriations, with annual tuition increases ranging from 2% to 25% in a single year.

This unpredictability adds to the already tremendous burden on middle-class families hoping to send their children to the university. College is being put beyond the reach of too many worthy students. The goal at our university is to sustain high academic quality, while providing these young Oregonians with an affordable education.

To accomplish this goal, we propose three steps. First, the university needs careful governance by a publicly appointed board specifically charged with overseeing the university’s operations. Second, the university should be more accountable to the state-level board that oversees its educational goals and standards. And finally, we propose a first-of-its-kind formula for replacing year-by-year state appropriations to the university with a public-private endowment. Earnings from the endowment’s invested capital will replace the unpredictable muddle of state funding.

It is this third element—replacing the state’s annual appropriation with a public-private endowment—that makes our proposal unique. We are asking lawmakers to lock public appropriations for the university at $63 million over 30 years—enough to make debt payments, at a 7% taxable bond rate, on $800 million in general obligation bonds.
Meanwhile, the university will pledge to match the $800 million in bond proceeds with private donations, and we will raise the private money before the public money is used for these bonds. The combined $1.6 billion public-private endowment will create a solid base for the university’s financial operation, replacing the erratic seesaw of annual state appropriations.

Using historical returns from the University of Oregon Foundation as a benchmark, the new public-private endowment will generate $64 million in operating revenue for the university in its first year. This is more than the current annual appropriation.
Projecting returns of 9% and assuming distributions of 4%, the endowment’s annual payout will increase to $263.4 million in its 30th year. The endowment’s capitalized balance of $6.9 billion at that point will secure the university’s future.

Some have labeled our projected returns as overly optimistic. But the University of Oregon Foundation’s own endowment has returned an average of 9.8% annually since 1994 (the earliest year for which reliable information is available). That takes into account three years of negative returns—including a 17.8% loss in 2008, during the worst economic downturn since the Great Depression—as well as a strong return of 10.1% in 2009.

Over the next 30 years, there will inevitably be good times for the state of Oregon, and it will undoubtedly invest more in higher education. But we’re willing to exchange the prospect of an eventual increase in state funding for a predictable level of support—even at today’s low level. Having a steady income stream through the public-private endowment will enable us to better control the rate of tuition increases.

As the proposal heads toward legislative consideration next year, we are now also in discussions to include a requirement that the new endowment maintain a portion of its investment portfolio in local companies, so we can help jump-start the state’s economy.

Oregon’s experience with higher education funding is not unique. Economic and demographic changes are demanding a response from universities across the nation. We believe that we’ve come up with a viable answer to the question of how to provide educational opportunity without sinking our state deeper into the financial hole—and we hope other states consider following suit.

Mr. Lariviere is president of the University of Oregon. 

UO should restructure and dump OUS

11/14/2010: President Lariviere’s restructuring plan calls for more UO autonomy and the unique state bond financing plan Michael Redding drew up. The UO Senate Budget Committee report on both is here. Very thorough and is generally very favorable on both counts.

They do call for more transparency, particularly with the Foundation which will be laundering the donation money, and for a *voting* board member from the faculty. It’s crucial that the member be elected by the faculty, and have a vote, or the principle of shared governance will be a total joke.

The OUS Board has a competing proposal, which involves more power for the OUS Chancellor and less UO autonomy. They want to keep their jobs supervising UO. The OUS “Governance and Policy Committee” meets on Thursday. Their agenda includes a set of specific metrics for UO, including targets for in-state enrollment. They call for an increase of exactly 42 graduate degree awards over the next 4 years for UO. This would be 35 more than we had in 2004. Meanwhile the number of undergraduates has grown by about 4,000.

Do the math. This is supposed to be a research university. We are way below the national averages on this. This is a sad joke OUS is playing, made only sadder by the fact that the UO administration can hardly call OUS to task on it. They blow the money we do get on the Jock Box, new 4×4’s for Public Safety. Millions in tuition money and state funds have been spent on the silliest sorts of administrative extravagances. While President Lariviere is selling his proposal to the legislature, he has left Frances Dyke to make the crucial resource allocation decisions for UO. I do not understand where Provost Bean has been while this has been happening.

But on balance, it’s time for us to dump OUS and go our own way. At least then it will be crystal clear who is accountable. My take after reading the Senate report is that if you are still opposed to Lariviere’s plan, it’s your turn to explain why. You can use the comments.

Oregonian on Lariviere’s overtime

10/18/2010: From the Oregonian editorial board, not from me:

University of Oregon President Richard Lariviere is asking the Legislature to allow him to run the university as he sees fit, freed from the stifling edicts applied to the rest of state government. It looks now like Lariviere chose not to wait for an answer.

When Gov. Ted Kulongoski ordered state agencies — including the university system — to require their workers to take furlough days, Lariviere apparently approved a plan to allow as many as 1,000 UO employees to offset the lost furlough hours with overtime hours, according to documents obtained by Willamette Week.  

We’ve been impressed with Lariviere’s bold vision and aggressive leadership at the UO. But this was a misstep, one he may come to regret when the Legislature finally takes up the question of the independence he seeks.

political heat for Lariviere for doing the right thing by the UO staff

10/13/2010: This article by Nigel Jaquiss below is one UO story I would really rather have not seen in the newspaper. For one thing it’s full of mistakes. For another it attacks the UO staff without any justification. This situation is not their fault, or Lariviere’s fault. It’s Kulongoski’s fault for going for cheap political advantage, on the backs of people making $12 an hour.

There are a lot of things that make me skeptical of Lariviere’s re-structuring plan – like having no idea what we are committing to and no voting faculty representation on the board. Not to mention giving veto power over the deal that finally will emerge from the legislative back rooms to Phil Knight, but not to the faculty. But to me this story is one big argument in favor of it. Kudos to Lariviere for doing the hard thing and the right thing for the underpaid UO staff by doing what he could to protect them from this stupid money wasting furlough plan. Damn the consequences.*  FWIW, here are some quotes from the story written by Nigel Jaquiss in Willamette Week. His words and sentiment, definitely not mine:

Gov. Ted Kulongoski hammered University of Oregon President Richard Lariviere last week for creating a pay system at the school that flouts budget cuts hitting other state employees.
The politically charged dispute between the outgoing governor and the new UO president surfaced in documents WW obtained via public records request. Those documents show that rather than instructing UO staffers to take furlough days like other state employees, Lariviere approved a setup that allowed as many as 1,000 of those UO employees to replace state-mandated furlough hours with overtime hours. So, while other public employees took pay cuts due to furloughs, some university employees got paid the same amount—for doing less work.
“We were concerned to learn of the use of overtime to offset the furloughs for classified employees at the University of Oregon,” Tim Nesbitt, Kulongoski’s chief of staff, wrote in an Oct. 1 letter to Lariviere. (About 8 percent of the university’s 20,000 full-time employees are “classified” SEIU Local 503 union workers who perform various clerical and support functions.)


Patricia Snopkowski, the Oregon University System’s auditor, did a preliminary review of overtime expenditures at all seven OUS campuses for the fiscal year that ended June 30, 2010. She found that, rather than declining, overtime costs at UO increased 30 percent, from $593,000 to $772,000.
UO’s overtime increase is small in the context of the $53 million UO expects to get from the state in 2010-11 (about 7 percent of its budget). But memos show Larivere ordered his top administrators to deliberately circumvent state directives to cut costs. …
And there’s a second level to the dispute: The less-work-for-the-same-pay edict coincides with the university’s push to reduce state oversight. But Nesbitt warned Lariviere that his approach to employee overtime could have larger ramifications. “This is more than a compliance issue,” Nesbitt wrote. “It is a policy issue, and a politically charged one at that.” …

* Yes, I know that the real consequence will be that underpaid faculty like me and underpaid OAs will get screwed out of raises for a few more years, while Lariviere’s got a very sweet contract already.

But just ask yourself what would Frohnmayer have done in this situation? He would have taken another raise for himself and then asked staff, faculty, and students to pay for it. Remember his furlough plan?

NRC Graduate Rankings

9/28/2010: The NRC graduate rankings are out, Chronicle.com has a spiffy interactive tool, probably only accessible from campus. Many UO programs do very well – even without adjusting for shitty faculty pay and the fact that UO research support is 63% of average.

The new quantitative methodology adopted by NRC emphasizes productivity per faculty. The fact UO does so well on this dimension should be a big shot in the arm for Lariviere’s restructuring plan, which will presumably promise specific productivity targets. We have nothing to fear from this. Well, most of us don’t.

As a random example consider UO’s economics department, in comparison to, say, UT-Austin. Taking the midpoint of the range estimate Oregon is #51, Texas is #67, out of 118 ranked programs. UO full professor pay is 30% below that at Texas.

In these rankings, we lose the most points because we have so few new students with full support. Where did that money go, coach?

Bad news for restructuring plan

9/25/2010: State Treasurer Ted Wheeler has called for a halt to state borrowing, saying the state is at its limit. From Tim Sickinger in the Oregonian. Lariviere’s plan for a $800 million bond would reduce state costs, because the bond payments would surely be limited below current direct appropriations to UO, but it would increase state debt. Those damn accountants.

Lariviere’s "New Partnership" plan

8/26/2010: Pres Lariviere has a new blog post on his UO restructuring plan:

The Oregon University System (OUS) has adopted aspects of our proposal, including a plan to seek legislative authority for the creation of campus-level governing boards that would guide individual universities’ operations.

Now comes a critical next phase in the discussion: introducing the proposal to Oregon’s lawmakers and continuing to work with the Oregon University System. I will be making a presentation in September to the Oregon Legislature’s Higher Education Workgroup, and a major focus throughout the fall will be to expand the discussion and build support heading into the 2011 legislative session.

The plan has its own website here. (They seem to have eliminated comments and deleted the existing ones, but are still calling it a dialog. With whom?) The backstory to the legislative meeting is a disagreement between Lariviere, who wants independence for UO, and OUS Chancellor George Pernsteiner and the OUS staff, who want to keep control – and their paychecks!

OUS control makes it much more difficult for UO to get donors: they know OUS siphons off half of every dollar they give UO and sends it to other campuses, by cutting UO’s share of state higher ed support. Economists call this crowding out, and from what I can see Phil Knight knows it cold. So I think Lariviere’s plan requires independence from OUS to work, and he’s going to have to fight to get it.

Working group co-leaders are
Senator Mark Hass, D-Beaverton,
Rep. Tobias Read, D-Beaverton,
Other members:
Senators
Chris Edwards, D-Eugene
Frank Morse, R-Albany
Dave Nelson, R-Pendleton
Representatives
Sara Gelser, D- Corvallis
Michael Dembrow, D-Portland
Betty Komp, D-Woodburn
Greg Smith, R-Heppner
Sherrie Sprenger, R-Scio

NY version of UO plan fails

8/5/2010: From Eric Kelderman in the Chronicle:

One year into her tenure as chancellor of the State University of New York, the State Legislature handed Nancy L. Zimpher her first major political defeat, rejecting a package of regulatory changes meant to allow public universities to earn more money outside of state appropriations and operate more efficiently.
The changes Ms. Zimpher championed would have allowed both SUNY and the City University of New York to increase tuition without the Legislature’s approval and to charge higher rates to students in some programs and at some campuses. Known as the Public Higher Education Empowerment and Innovation Act, it also would have allowed the university systems to lease property and enter into public-private partnerships without lawmakers’ approval and loosened regulations on buying goods and services.
On top of excluding the empowerment act from the budget it passed late Tuesday, the Legislature cut $210-million from the state university budget without approving a tuition increase that could have helped the system offset those cuts. Over the past three budget years, the state system has lost nearly 30 percent of its state appropriations. The city university system took an $84-million cut in the 2011 budget.
While the Legislature’s recent actions are a setback for SUNY and the system’s chancellor, debate on the empowerment act is far from over. The process also has shown that Ms. Zimpher is a force to be reckoned with, even at the Statehouse, where the political climate has devolved in recent years to a state of near chaos….

More on OUS restructuring

8/2/2010: The details of the OUS system’s proposed restructuring plan are becoming clearer. From their Governance and Policy Planning Committee website. They are not proposing to give up much control to UO!:


3.    Board will seek new legal status with state that differs from that of a state agency.

9.    Tuition will be retained by the campus on which it is earned and remissions will be
granted by the campus in which the student enrolls.
10.    Board will enter into a performance agreement with the state that focuses on outcomes
a.    Enrollment of Oregonians;
b.    Degrees awarded;
c.    Employment of graduates;
d.    Externally funded research;
e.    Workforce enhancement;
f.    Affordability for Oregon students;
g.   State investment per degree and enrollment level related to level needed to achieve state goals;
h.   and NOTE: DETAILS AND TARGETS TO BE DETERMINED BY JULY 2010.

11. Board will enter into performance agreements with and allocate state funding to
universities based on their individual missions, programs, and other factors with the aim to use the entirety of the System’s universities and programs to fulfill the performance required by the state. The performance measures for each campus are likely to be different from one another.

12.    Board will develop and maintain performance criteria and measurements and will monitor its own and the universities’ performance in achieving Board goals and the requirements of the agreement between the Board and the state.

13. OUS and its universities are public, will fulfill public purposes, and will have public responsibilities to serve and assist all qualified Oregonians. Every university will be responsible for contributing to the achievement of Board and state goals and expectations.

14. Board will approve all academic programs and will ensure that there are sufficient programs of high quality and necessary scope in the state to meet the needs of Oregon and Oregonians generally and in areas of specific program or geographic need.

15.    Board will seek funding from the state for both operating costs and capital improvements in order to provide the resources needed to fulfill its public purpose.

16.    Board will seek authority to be able to expand both public and private resources to meet its goals and will provide such authority to universities, as appropriate.

OUS takes up athletic reform, restructuring

7/28/2010: The OUS Governance and policy committee takes up several issues at its meeting tomorrow, including more discussion on competing restructuring proposals (they call theirs “the compact”), and also “IMD Changes Stemming from Athletics Issues”.

The link includes minutes from last month, with a long discussion on the proposals, quite interesting. Regarding the Lariviere/Redding bond idea:

In respect to the UO’s bonding proposal, Chair Kelly recommended the Committee not address this issue or adopt a recommendation as it is not a proposal submitted by the Board. Provost Bean agreed and advised that the University continues to receive analysis from independent sources on the proposal, adding that this may not be the best solution at this time. Pernsteiner cautioned that the Board should address the issue in the future (possibly at the October Board meeting).