States look to centralized UNC system as model for cutting costs

Even as the UNC system struggles in the midst of economic instability, other states are looking to its centralized system as a guide to cutting costs.

States like Michigan and Louisiana are examining proposals to restructure their entire higher education governance systems, which could save money by sharing costs among different state universities.

Jeff Davies, chief of staff for UNC General Administration, said North Carolina’s consolidated administrative board is working to cut unnecessary costs from the system’s budget.

“Any place that we think there might be a possible gain in efficiency with consolidation, we’re taking it,” he said.

The UNC system was created in 1971, giving broad authority to the UNC Board of Governors to set policy for its 16 — now 17 —institutions.

Aims McGuinness, senior associate with the National Center for Higher Education Management Systems, said North Carolina was at the forefront in creating these systems.

“The fights between and among institutions for resources through the legislature and state politics were basically tearing the state apart,” he said.

Richard Novak, senior vice president at the Washington, D.C.-based Association of Governing Boards of Universities and Colleges, said having a centralized system allows states to cut costs and increase the productivity of their universities.

In Michigan, there is currently no statewide higher education coordinating structure. Each university is governed solely by its own board.

A recent proposal in Michigan’s state legislature would create a commission to review changing the university governance structure.

Craig Thiel, director of state affairs at the Citizens Research Council of Michigan, said the proposal is part of a larger state trend toward cost-saving legislation.

“The state of Michigan for the last ten years has been turning over every stone and flipping over every mattress to keep the budget solvent,” he said.

But the proposal is opposed by the Presidents Council of State Universities of Michigan, which represents the state’s 15 public universities, said Michael Boulus, executive director of the council.

“Each university is different,” he said.

“Trying to make them all run under the same system doesn’t make sense to us.”

But Novak said the universities’ current autonomy leads to an unnecessary proliferation of graduate and professional programs and creates an imbalance in university quality.

“On the one hand, there are some world-class institutions in Michigan, but there are probably some others that are underperforming a bit,” he said.

In Louisiana, two state-mandated commissions have already completed recommendations for restructuring higher education governance, said Meg Casper, associate commissioner for public affairs for the state’s central Board of Regents.

In 2010, the first commission proposed consolidating Louisiana’s four semi-independent university systems into one overarching authority.

But its main recommendation was rejected by the state legislature, which later created a new commission to study the issue again, she said.

Its report, released earlier this month, did not recommend the same major restructuring as the first did, but proposed to strengthen the existing board.

“Part of what we continue to hear from experts is that there are any number of governance systems across the country,” she said. “None of them are the magic bullet.”

Louisiana’s legislature will review the commission’s recommendations later this year, and Casper said she thinks these will have a better chance of passing.

McGuinness said these central authorities, when structured properly, can bring order to an otherwise competitive and destructive system.

“The institutions are trying to survive in a very tough environment,” he said.

“And to do that they tear each other apart in competition for resources.”

Novak said having a single central authority streamlines the state appropriations process, and can save money through sharing administrative costs and increasing purchasing power.

A central authority can also make decisions regarding which programs are offered at different universities, another source of savings, he said.

“I do think North Carolina works pretty good,” Novak said. “There’s been a history of strong, effective presidents of the system.”

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