You are viewing this article in the AnnArbor.com archives. For the latest breaking news and updates in Ann Arbor and the surrounding area, see MLive.com/ann-arbor
Posted on Sun, Aug 22, 2010 : 6 a.m.

Statewide group pushes Michigan's universities to share some administrative functions

By AnnArbor.com Staff

BY DAVE MURRAY, BOOTH NEWSPAPERS

Eric Fingerhut says his goal isn't just to save Ohio money - it's to save Ohio, through an improved higher education.

As University System of Ohio chancellor, Fingerhut is directing the state's 14 public universities and 23 community colleges from autonomy to one system, a move he says will both save money and graduate more - and better prepared - students.

urc art.jpg

University of Michigan President Mary Sue Coleman answered questions about the university's collaborative research efforts, which include Michigan State and Wayne State universities, during a press conference in July at U-M's North Campus Research Complex.

AnnArbor.com files

"We're moving into a global, technical, computer-based economy and the greatest asset we can have is higher education," Fingerhut said. "Ohio has an exceptional set of universities, but the problem is none of those individual assets could compete globally."

While some Michigan universities expressed concern about such a move, the University of Michigan is part of a group calling for the state’s universities and community colleges to do some sharing of administrative costs.

And U-M spokeswoman Kelly Cunningham notes U-M is already involved in cooperative agreements. She pointed out U-M is collaborating with Wayne State and Michigan State in the University Research Corridor, an economic development project to help the state.

The leading group calling for change to the way higher education is run in the state is the influential Business Leaders for Michigan. That group says the state's approach to higher education is inefficient and costly. If the universities are going to remain separate, then they need to work more closely together to lighten the burden on taxpayers.

The group's "Michigan Turnaround Plan" calls for the state's 15 public universities and 28 community colleges to "rationalize" management, sharing some administrative functions, before taxpayers should increase their contribution. The schools have a combined budget of $6.3 billion and serve 446,185 students.

The group's board is a who's who of Michigan's industrial chiefs. It also includes the presidents of both U-M and Michigan State University.

"We're encouraging school districts to share some of their backroom functions, like human recourses and information technology," said Doug Rothwell, the Business Leaders CEO. "There's no reason the colleges can't do that, too. It would create a better system and a lower cost."

Rothwell said Michigan needs a highly educated workforce to escape its economic struggles, and noted the state is 31st in the country for per-capita spending on higher education -- and support is down 10 percent in the last decade.

"Between 30 and 35 percent of the state has at least a community college degree, and that figure is going to need to be around 75 percent by 2020 to 2030," he said. "The push would go hand in hand. The colleges would get more support from the state, but they'd have to show they were doing more to make that money go further by being more efficient."

Rothwell said universities already have demonstrated some desire to lower costs, noting that some U-M employees are paying 30 percent of their health insurance premiums. Grand Valley State University recently froze most salaries and raised employee contributions to health insurance premiums from 13 percent to 20 percent.

College leaders said they don't dispute potential savings exist in collaboration, and they already belong to buying groups that have brought cheaper prices for energy, insurance and technology.

University partnerships include Grand Valley's Michigan Alternative and Renewable Energy Center, a $3.1 million project with U-M to create a wind-data collection structure on Lake Michigan.

State schools have in recent years also made it easier for students to transfer credit from one state institution to another, and nearly 15,000 students looking to complete four-year degrees by taking some of their classes at community colleges, said Michael Boulus, executive director of the Presidents Council, State Universities of Michigan.

"Our motto is 'Collaborate, not duplicate,'" he said.

Part of that motto could be "compete," said Ferris State University President David Eisler, who said autonomy forces schools to look for new course offerings that help their communities and attract students.

"Because we're exposed to market pressures, we can respond to a need," he said. "We're always looking to see where there might be a niche that we can fill."

Grand Valley President Thomas Haas, a former college coach, compares state universities to teams.

"We're competitors and we're going for the win. But when it's over, the two teams shake hands and carry on in a collaborative way," he said.

A Michigan State University leader said the state’s universities thrive with their autonomy. But there also are advantages to California’s system, which operates with large research universities in one system and other state schools under the direction of another, said Steve Webster, vice president for governmental affairs.

“The mission and the needs of Michigan State, University of Michigan-Ann Arbor and Wayne State are so different than the others,” he said. “We’re not allergic to a system. There are upsides. But we think there should be no system, or there should be two.”

But universities don't always avoid the "duplication" portion of the Presidents Council motto.

After Michigan State University announced a medical school in Grand Rapids, Central Michigan, Western Michigan and Oakland all hatched plans to open their own medical schools, which before had existed only at Michigan, Michigan State and Wayne State.

Medical school duplication wouldn't happen in Utah, said William Sederburg. The former Michigan state senator led Ferris State University for nine years and is now Utah's commissioner of higher education, overseeing 10 public colleges and universities.

After working under both types of systems, Sederburg said Michigan would benefit from a centralized approach, saying collaboration in purchasing and other areas saves millions of dollars.

OHIO PLAN

Ohio is ending the autonomy of its public universities and community colleges and moving them into one system. The details:

  • When it began: Gov. Ted Strickland in 2007 appointed a chancellor to build a unified system of higher education, linking the plan to economic recovery.
  • Total schools: 14 universities, 23 community colleges. (Michigan has 15 universities and 28 community colleges).
  • The chancellor: Eric Fingerhut, a former state senator and U.S. representative, serves in Gov. Strickland's cabinet. He is an attorney, a former professor and unsuccessfully ran for governor and the U.S. Senate.
  • The process: The chancellor is appointed by the governor and has a board of regents, which approves new course offerings and potential tuition increases. The Legislature appoints trustees to university boards, and trustees select campus presidents.

He said his state's schools have flexibility, but also have oversight to prevent duplication. New academic programs are approved by state regents.

Western President John Dunn sees that as a liability and vastly prefers Michigan's autonomy.

He said Western and the others are planning medical schools because there is a demand for doctors. He said the competition from other universities in the state will maintain high standards.

Dunn said statewide systems create political or bureaucratic roadblocks that prevent schools from making "quick and appropriate decisions."

"If people want to see a system with inefficiencies, redundancy and unnecessary delays, then create a statewide system," he said.

New York leaders - who run what is believed to be the largest university system in the world - say there are advantages to Michigan's autonomy.

"The Michigan universities have an independence, and I wouldn't lose that for the world," said Monica Rimai, senior vice chancellor and chief operating officer, State University of New York.

"Michigan is unique, with the University of Michigan's chartered existence and Michigan State University's land-grant status. There are really two 900-pound gorillas, two world-class universities and that's something most states can't offer. In Wisconsin, it's University of Wisconsin in Madison and everyone else."

Fingerhut, Ohio's chancellor, said bringing their universities under one umbrella made them stronger.

Ohio lost hundreds of thousands of jobs even before the economic meltdown - only Michigan lost more in the last decade - and Gov. Ted Strickland tied improving higher education toward kick-starting the state's economic prosperity.

Under the new plan, the governor nominates the chancellor for the system, subject to legislative approval. The educator has a seat in the governor's cabinet, and the Legislature appoints trustees to the university boards. Trustees select campus presidents. Ideally, all are of common mind, Fingerhut said.

"I can sit at my desk and issue edicts all day, and I realize there are a million people who can slow them down," Fingerhut said. "So we need to have the right balance of people who buy into the vision, and have that balance of local leadership."

In Michigan, such a setup would require constitutional changes. U-M, MSU and Wayne State boards are elected statewide, while others trustees are appointed by the governor with Senate approval.

Fingerhut said he believes demonstrating the system can run efficiently is the way to get lawmakers to open the state checkbook, even in difficult times. The state government contributes about $2.8 billion to the universities.

"The fear was that if we show how we are saving money, they're just going to cut our budget," he said. "But I disagree. Who would you rather give money to? Someone you know will spend it efficiently or someone who is inefficient? I think if we show you we can spend the money well, you are more likely to invest in us and give us more."

A new Advisory Committee on Efficiency, made up of regents, students, faculty and administrators, tracks the savings projects and publishes reports and rankings.

Fingerhut said working as a system also has academic benefits. The end goal is to have more Ohio residents earning degrees.

Universities accept credit from other state colleges, but also offer classes in community college buildings.

"We need to have some lower-cost pathways," he said.

Grand Rapids Community College President Steven Ender said there's merit to the Business Leaders' recommendation, and that schools could do more - without needing a system.

He said the colleges work together largely through their association, and partner to improve their chances for large federal grants.

"The big question is, how do we get that conversation going?" he said. "Maybe it has to start at the board level."

Comments

trespass

Sun, Aug 22, 2010 : 9:17 p.m.

Cash & NorthMaple- The problem with merging the admissions process is that UM doesn't want it widely known the preferences it gives "special interest" students (children of politicians, big donors and other influential people). The President of the University of Illinois just got fired for running such a special admissions program and MSC would not like hers exposed.

NorthMaple

Sun, Aug 22, 2010 : 7:50 p.m.

Cash, I was thinking exactly the same thing about admissions. In fact, if all the state universities shared their admissions departments, students could immediately be accepted to all the universities the student was qualified for, preventing the need to fill out multiple applications and pay multiple fees.

Doreen

Sun, Aug 22, 2010 : 7:27 p.m.

When I look at UM's online for-credit offerings, I'm disappointed. It's great to offer classes to high school students, but why them specifically and why regional 'online centers'? UC Berkeley Extension has classes offering full University credit--they're offered online, by mail, or on-site. They are great classes--I learned over 500 Mandarin characters and was able to communicate(with that limited vocabulary) after one beginning class. Online credit classes offer those working full-time a chance to see if they can meet high level collegiate requirements(and earn advance credits), give post-grad workers ongoing education, and are an excellent way for universities to begin to merge faculties/departments. While I loved my undergrad years at UM, campus expansions should be a thing of the past. Statewide systems with online components are the way to go.

Cash

Sun, Aug 22, 2010 : 6:05 p.m.

I think some administrative/clerical departments should be consolidated....for instance, Admissions Office. Each school could have different criteria, and the central office would review apps and process them. The same could be done consolidating functions like transcripts. Instead of having a department of 20-50 staff, that could be consolidated as a state function with only one office. This is done in other states that do not use a central governance. It reduces the cost of paper pushing. Currently every school has duplicate departments providing the same services. I think the public schools should look at functions that are duplicated and merge them into a centralized function where at all possible. Now, every school will fight to keep their own little power structure. (the real meaning of autonomy) If we don't make changes our state is going down the tubes.

trespass

Sun, Aug 22, 2010 : 11:22 a.m.

@xmo- I will give you one good idea that the UM has adopted. They testified in a recent court case that the grade point average to get into the engineering graduate program has gone up in the last few years from B- to B+. Guess who the students are that are getting in instead of a Michigan family's child with a B average (They are Chinese but they pay full out of state tuition). When they go back to China they take with them expertise that will help them compete with American companies (in many documented cases IP stolen from UM professors). How is that helping UM become an engine for the Michigan economy?

xmo

Sun, Aug 22, 2010 : 9:46 a.m.

One of the good things about Michigan is the lack of centralization it costs a little more but we have competition. Competition is good because it forces the parties involved to work harder to stay competitive. When you go to a "STATE CONTROLLED" system, there is only one way to do things and you hope that it is the right way. The present system at least allows new ideas to emerge and if one system fails at least we have another two that can learn.

guyfroma2mi

Sun, Aug 22, 2010 : 9:17 a.m.

It makes me shudder to even contemplate starting down this road. If we've learned nothing else from the financial meltdown and "too big to fail" banks, not to mention Fannie, Freddie, Enron, etc, it's that the LAST people we should be looking for in terms of rooting out inefficiencies and waste is the business and banking communities; the way Big Business is run is not even in their own long-term best interests, let alone Society's. The bigger the company gets, and the more beholded to stockholders, the more likely we are to see either slash-and-burn cost-cutting to boost this quarter's financial returns (since the top management will just jump ship when it starts to go down), outsourcing of jobs to other regions with no consideration of the fact that in so doing you're decreasing your own customer base, and the less competition there is in the marketplace the more bloated a company starts to get- any improved inefficiencies are more than offset by added middle-management. Not to mention decreased innovation, entrepreneurialism, community involvement, and employee pride and loyalty. It's annoying enough to mail in a City of Ann Arbor parking ticket to New York, which may save the City a few cents up=front over handling it in-house or hiring a local company, but I suspect that it costs the City many times that when you factor in lost property taxes, register receipts for local businesses, and school funding by transferring those jobs out of state; start centralizing University functions and pretty soon students will be mailing their tuition payments to Alabama for processing and they'll be calling a Financial Aid office in India.

Steve

Sun, Aug 22, 2010 : 8:49 a.m.

Michigan's public Universities aren't private institutions, they are public, that's why the word public is used to describe them. That's why when you are on University land you are subject to State law, not local ordinance, that's why the University pays no property tax, and the list goes on. I don't believe Mary Sue Coleman has been president at UM for 20 years so it just shows your bias to try a lay twenty years of flawed decisions, at least in your opinion, at her doorstep. I also notice that while there is plenty of talk about the increase in tuition there is no balance to that my indicating by what percent the state has slashed the money given to the various Universities around the state (and every other school within the state). There is also no mention of the increased cost of everything over that same 20 years. You increase cost and decrease the amount of state funds and you get one of two things. Drastic cuts to programs or tuition increases. Not a surprise to see tuition increases win that battle. A strong set of Universities is good for this state, not a bunch of gutted schools that are mere shadows of what they are today. I'm not averse to the Universities finding ways they can cooperate to make themselves more efficient and to save some money. That being said it's a difficult thing to actually do. Each University offers something different. A different focus or specialty, some are purely instructional, some mix instruction and research, some have lots of research. Finding ways to bring together back end systems such as HR would be problematic, because the needs of the different Universities are so different. Trying to force everyone into the same mold will do more damage than good. I could see where they might try to group Universities by common factors so that like Universities are in like systems, making the sharing of some of those back end services easier (such as UM, MSU, and Wayne have found in certain areas). There are other pitfalls to be avoided by doing this, unfortunately things are never as easy to actually do than they are to say. There are always factors that sway things back and forth. Try to find ways to cooperate, but don't damage the Universities just so you can say, see we cooperated and saved 100 dollars, isn't that grand. Of course it cost 1,000 and we had to shut down a number of programs that students will now have to go out of state for, but we cooperated.

trespass

Sun, Aug 22, 2010 : 8:46 a.m.

@Inside the hall- "scoring the Pfizer property", you have to be kidding. Do you think losing all those good jobs and taking the Pfizer property off the property tax roles was a good thing. It is no secret that Pfizer had terrible relations with MSC and the UM. Why would they want to stay in a college town when they had bad relations with the college?

pseudo

Sun, Aug 22, 2010 : 8:25 a.m.

Two things bug me about this article bother me. The comparison to Ohio's system is through very rosy glasses. Ohio's state system does not really have an academically STELLAR school like U of M or Michigan State. They are required to accept any Ohio High School Graduate who applies, this means they are fairly uncompetitive. Is shows in their ratings. In essence, Ohio's state colleges have become an extension of the high schools. I don't think that would transfer well to Michigan based on the shape and performance of Michigan's grade schools. Maybe the community colleges but really the independence of our state schools is an asset that has value that should not be thrown away. My second issue is this: THe list of members of this with the veyr limited voice U of M and Michigan State have is primarily business "leaders" from various right leaning political persuasions (I see very few new technology company leaders listed). Our business leaders haven't exactly been stellar or all that competitive based on our economic results. They have fought a variety of economic reforms based on their views of the bottom line...this is not the way to measure success at our colleges. These are folks that paid others to do their dirty work: school vouchers, healthcare reform advertising, tax code etc. They have carped our business taxes that really aren't all that bad, they have demanded corporate welfare on top of that. Many (if not most) of these businesses have been unwilling to pay their fair share here in this state or accept responsibility for the damage they have done to our environment. Many have blamed unions for their lack of competitiveness and yet they have shielded the generous pay for their white collar people. 100K salaries for testing engineers is my favorite example (by the hundreds). Does anyone think these huge companies are efficient? Who should we look to for advice on how our colleges should be run? Probably not these guys.

Bones

Sun, Aug 22, 2010 : 8:04 a.m.

"The leading group calling for change to the way higher education is run in the state is the influential Business Leaders for Michigan. That group says the state's approach to higher education is inefficient and costly. If the universities are going to remain separate, then they need to work more closely together to lighten the burden on taxpayers." Taxpayers should not have to fund higher education. They are private institutions. Institutions that charge far more money every chance they get for tuition. If taxpayers are to fund higher education. Then maybe it should be like public schools. No tuition process. But as long as we have influential business dictating things. It will always be the same.

InsideTheHall

Sun, Aug 22, 2010 : 7:10 a.m.

MSC has done a credible job as President. Evidence the modernizing of buildings, scoring the Pfizer property, and creating stability after the failed Lee Bollinger experiment. Sounds like Trepass is the one with the vested interest here.

trespass

Sun, Aug 22, 2010 : 6:42 a.m.

Mary Sue Coleman will never let it happen. For the last 20 years the UM Administration has consolidated power in themselves and stripped away shared governance with the faculty. Mary Sue will never give that up and the Board of Regents will do her bidding because they all have their own business interests that are furthered by being Board members. Until there is reform, the University of Michigan will never serve the interests of the state and its citizens because top administrators are too busy serving their own interests. Vote for the constitutional convention if you want to change that. Since 2002, when the incumbent Board members Adrew Richner and Andrea Fisher-Newman were elected,The Board of Regents have presided over 60% tuition hikes, falling academic rankings, NCAA football & Basketball scandals, exclusion of more and more Michigan applicants for graduate schools, and more and more technology transfer to China with resulting job losses in Michigan. Why should we then re-elect members of a failed Board of Regents.