Thursday, December 8, 2016

Win-Win: Privatize University of Wyoming

Just as we feel the first pinch of winter Arctic cold, the temperature in the debate over the state's budget problems is rising to new levels. The University of Wyoming, which gets a quarter of a billion dollars annually from the state, is working on a strategic plan that could turn into a plea to shield the university from further budget cuts in the coming legislative session. The Wyoming Tribune Eagle has the story:

University of Wyoming instructors and alumni asked president Laurie Nichols to protect their programs in the face of dwindling state funds during a listening session Monday at Casper College. The meeting was the sixth of 10 such events Nichols and various UW officials will hold as the university looks to draft a strategic plan for its next five years. The university officials did not answer questions but listened to comments and concerns from some of the roughly 80 attendees. Those perspectives will be taken into account as UW makes its strategic plan, Nichols said. The majority were related to state budget cuts. UW’s board approved $10 million in cuts and adjustments in November, on top of $19.3 million in reductions rolling into effect this fiscal year. The budget cuts are necessary because of the university’s declining state block grant: The university has lost $41 million in state funding in the two-year budget cycle that began July 1.
I am sure university president Nichols is doing a fine job. Everything I hear about UW in terms of academic performance is encouraging. We have a remarkably good university here in Wyoming, especially given the small size of the state and the somewhat eclectic location of the school. 

That, however, does not mean that the university should receive some sort of specially protected status in terms of state budget priorities. So far, president Nichols has not come forward and asked for any such status; the pleas of no more cuts apparently come from employees and alumni. That said, the very fact that the university administration is doing a "listening tour" means that they are going to let their strategic plan be influenced by the opinions they hear during the tour.

The Wyoming Tribune Eagle gives an example of what the UW administration is hearing:
Indeed, a trio of men, including state veterinarian Jim Logan and college of agriculture adviser Bob Kidd, quickly defended the ag school. “The agriculture industry relies a great deal on the University of Wyoming to survive,” Logan said, pointing out that agriculture is the third-largest economic factor in the state. “Please, as you consider this strategic plan and these budgets, please remember the land-grant university programs.” He also urged Nichols to protect and enhance the school’s agriculture extensions across the state. Should the “world-class scientists” working in the vet labs retire and not be replaced, it would be a blow, Logan said, because of the reliance the agriculture industry has on veterinarians. UW has been eliminating staff and faculty positions through attrition recently, with a new round of buyouts announced in November. A rancher, Kidd told Nichols that the budget cuts had sliced through the fat already. “We’re starting to cut into bone,” he said.
Again, the University of Wyoming is essential to many parts of the Wyoming economy, from agriculture to the practice of law. That, however, still does not mean the school should be protected from budget cuts, especially since that would mean more of the burden for reducing the state's deficit would fall on the shoulders of taxpayers. 

Does that mean I want the university to suffer under the budget slicer? No. Any claim that the university only has two options - pleading for special status or accepting budget cuts - is to misrepresent available alternatives. 

There is a third one: privatize the university.

I realize that any suggestion that UW should become a private school is like cursing in church. Nevertheless, with a runaway budget deficit, and no end in sight to deficits unless we do something drastic about it, we have already run out of conventionally accepted measures. To paraphrase the great fictional character Sherlock Holmes: when all acceptable solutions to a problem have been exhausted, only the unacceptable ones remain.

By deeply rooted conventional wisdom, privatizing the University of Wyoming is entirely unacceptable. Yet, if we set aside conventional wisdom for a moment, we will see that the idea is not as outrageous as it first may seem to be. In fact, we have good reasons to believe that the UW would fare better as a private school than if it continues as a public university.

Academic performance is at the epicenter of the private-vs-public issue. Again, I am sure the faculty at UW is doing a fine job educating their students, and the Wyoming workforce is full of UW graduates who excel in their professions of choice. Nevertheless, good can always become better: private universities consistently rank higher than public universities. Of the top-20 ranked universities in the country, only one is a public school, namely University of California at Berkeley, which is tied for 20th place with Georgetown and Emory. 

The University of Wyoming is ranked 171st. 

It is an unfortunate fact that academic performance of a school as a whole - not necessarily individual faculty members - is linked to its status as a public or private institution. Having worked as a college professor in three different countries, at both private and public colleges, I have first-hand experience of this: there is no doubt that the less financial influence politics has over a university, the stronger the school tends to be academically. The reason is not that politicians exercise political influence over academia (although I have seen that happen abroad) but rather that public universities do not have the same pressure on them to compete for academic excellence as private schools do. By attracting academic excellence, especially on the research side, universities can raise more money and attract even more high-performing students. 

As a university rises academically, it becomes increasingly selective in what students it attracts. This allows for higher tuitions, further securing the school's financial future.

In short: the free market at work.

The alternative is to continue to rely on taxpayers. The University of Wyoming gets a very high share of its revenue directly from taxpayers. In fact, the share of state appropriations in the University of Wyoming budget is ten times higher than it is in the budgets of high-ranked public universities such as the University of Michigan at Ann Arbor (27th in the US News and World Report ranking). 

Actually, the UM Ann Arbor example gives us an intermediate alternative, namely a school that remains public in legal form but where taxpayers play a marginal role in funding the school. If the University of Wyoming increased its financial independence by reducing Wyoming state funds to marginal importance in its revenue, the school would become private in the practical sense of the term. 

In other words, the current state budget crisis presents the UW administration with a great opportunity. Instead of focusing on the minimization of state appropriations cuts, which I fear is going to be the main outcome of the strategic plan that the university is working on, they should welcome the reduction, ramp up their fundraising efforts and involve donors in targeted project, such as elevating the entire university to national recognition.

The university would benefit, long term, from implementing a strategic plan that purposely minimizes the schools dependency on public funding. There should be no problem implementing such a plan, especially since UW has a well-earned reputation for providing the state's economy with a capable workforce.

There are good philosophical, academic and economic arguments for a formal, or at least fiscal, privatization of UW. Since the state would save a large amount of money in the bargain, there are also good political reasons for it. The only question is: are our state lawmakers, and the UW administration, willing to think outside the box of conventional wisdom?

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