Virginia Governor’s Proposed Covenant With Colleges Defies Other States’ Cuts
Chronicle of Higher Education
By Eric Kelderman

February 28, 2011

Many state governors are proposing deep cuts in higher education this year. But Gov. Robert F. McDonnell, of Virginia, is bucking the trend by pledging to restore some of the cutbacks that public colleges have endured during the economic downturn, and proposing a measure that would provide institutions with a fair share of state money in the future.

The plan, which has broad support in the state’s General Assembly, is meant to fulfill his goal to increase the number of Virginians with college degrees by 100,000 during the next 15 years, and in particular the number who earn degrees in science and technology.

“These reforms will help us attract new employers to Virginia and better prepare our citizens to fill the jobs that already exist in the state today,” Mr. McDonnell, a Republican, said at a news conference in January, announcing the proposal. The cost of the legislation, which has not been determined, is an investment in the state’s economic future, the governor said, arguing that higher education returns more tax revenue to the state than it costs.

While some of the bill’s finer points are still being negotiated, it is expected to include the creation of an advisory committee that will recommend to legislators an annual per-student cost of education at the state’s public four-year and two-year colleges.

The committee, which will include higher-education leaders and elected officials, will calculate what portion of that cost should be covered by the state and what should be paid for with tuition income. If the state cannot pay its full share, the colleges could raise tuition to cover the difference.

The committee will also calculate the amount of need-based financial aid that will go to each college for enrolling students from low- and middle-income families.

The bill calls for financial incentives for colleges to increase both their enrollments and the number of graduates from programs in science and technology. And it establishes a rainy-day fund to prop up higher-education appropriations when state revenues fall short in the future.

Political Cover

College officials and higher-education experts, like lawmakers, are generally supportive of the plan, which they hope will restore the balance between state appropriations and tuition, or at least give them the political cover to raise tuition when state money falls short.

Over the past decade, enrollment in Virginia’s colleges has grown by more than 31 percent, while the state’s per-student contribution to higher education has shrunk by about half, according to a report commissioned by Governor McDonnell last year.

David S. Spence, president of the Southern Regional Education Board, said the bill was significant because it would stabilize the amount of state money that colleges receive no matter what fiscal shape Virginia was in. Higher-education support is often cut disproportionately during economic downturns and increased more rapidly when state coffers are flush.

“I don’t think it’s extraordinary for a state to look at what the cost of educating a student is,” he said, “but they’re looking at the state’s role, the student’s role, and the institution’s role.”

Teresa A. Sullivan, president of the University of Virginia, said she had been heartened by the bipartisan support for the bill and the governor’s commitment to following through on his campaign promise to make higher education a priority.

“It seemed to me … that Virginia had been on a relentless path toward disinvestment of higher education,” she said.

Alan G. Merten, president of George Mason University, said many campus leaders were just as pleased with what wasn’t in the bill, including a cap on tuition and a limit on the number of nonresident students whom the colleges could enroll.

Many details of the legislation will be left for the advisory committee to negotiate, such as developing a formula to decide the cost of higher education at each institution and determining what shares the state and students should be responsible for.

One possibility: If colleges conclude that the state’s share is too low, they could be penalized by lawmakers for raising tuition beyond what the advisory committee recommends.

Ms. Sullivan, however, said the legislature can already penalize colleges for tuition hikes through the appropriations process. For her, the committee will be most effective as a liaison to lawmakers, helping, for example, to explain tuition increases, especially when the state cuts money for higher education.

Perhaps the bill’s biggest limitation is that it is not a guarantee of state money, since the advisory committee can do no more than make recommendations to the legislature, and no revenue would be specifically dedicated to higher education.

“If the state doesn’t have the money, it can’t fund the formula,” Ms. Sullivan said. “Nobody is saying this will fix all the problems.”