Interpretive Synthesis

System Design
Historical Influences on System Design and Governance Structures
Links Between Contextual Changes and State Priorities for Higher Education
System Performance

 

The case studies suggest that performance is influenced by contextual, structural, and leadership variables. Geography, political culture, demographics, and a state's economy present opportunities and challenges to elected leaders, who must choose over time among alternative and frequently conflicting visions of a state's future. Higher education systems are a part of these visions as well as a means to their attainment. Higher education governance structures define the transactional and institutional environments where leaders are held accountable for pursuing visions that receive political sanction.

We begin with the federal models, Illinois and Texas. We follow with Georgia, where a unified governing board provides a tight interface between institutions and state government. We then look at the confederated systems, Florida, New York and California. We end with Michigan, where institutions are the most loosely coupled to state government. Table 1 provides a brief description of each of these models.

Table 1
Types of State Governance Structures
Type of System
Representative States in This Study
General Characteristics
Federal
Systems
Illinois
Texas
There is a state agency that is neither state government nor higher education, but acts as an interface between state government and institutions. This agency is responsible for all four of the key work processes. Institutions or systems have individual governing boards.
Unified
Systems
Georgia
All degree-granting institutions are governed by a single, consolidated governing board that is responsible for all four key work processes.
Confederated Systems
Florida
New York
California
There may be a statewide board with planning and advisory responsibilities, but it has limited authority in the budget process.
Confederated Institutions
Michigan
All or most institutions have individual governing boards. There is no meaningful state agency to which the state has delegated responsibility for the work processes.

The synthesis that follows is intended to expose interactions between context, leadership and governance structures. All of these concepts contribute to performance in interdependent ways that make disentangling their individual contributions a task of considerable complexity.

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System Design

Federal Systems

Illinois
Illinois has delegated authority for all four of the work processes to the Illinois Board of Higher Education (IBHE), which in the words of its executive director is "not simply higher education or government." The board works with institutions, governing boards, and a coordinating board for self-governing community college districts through the program review and articulation processes. IBHE is the focus of the budget process through which the Governor, the Legislature, and their respective administrative agencies allocate resources while concurrently sending messages about priorities and accountability. IBHE also manages an information process that links all system participants with state government and the general public. The Legislature has preserved the decision-making authority of individual institutions by rejecting an attempt to increase board powers and by restraining board efforts to increase admission standards or merge programs. At the same time, the reserved powers implicit in the budget and program review processes prevent institutions from ignoring the concerns of state government. Even private institutions respond to IBHE initiatives as part of the price they pay to ensure they are not undercut by the public sector.

Information serves as the "glue" that holds the Illinois system together. IBHE is the collector and coordinator of most of that information. The list of reports IBHE publishes reads like an inventory of state priorities. IBHE cost studies provide a rationale for budget recommendations. The synthesis and related information IBHE provides for each higher education bill informs legislators, legislative staff, and the higher education community. To a house staff member, IBHE is the "institutional memory of higher education." Illinois is information-rich because IBHE responds quickly to requests and has been effective at getting legislators and others to use their services.

The IBHE program review process helps the public higher education community develop consensus about who should offer which programs and where. Through this process, institutions develop strong and well informed proposals, share information about their educational planning, and receive suggestions from peers about how proposals might be strengthened. IBHE uses focus statements defining institutional roles and formal criteria for program approval to exercise reasonable control over program proliferation. Through its relatively new Priorities, Quality and Productivity (PQP) Project, IBHE has pressured institutional governing boards to distinguish their programs on the basis of priorities, quality and productivity and to reallocate the resources captured to high quality, higher priority programs. Institutional leaders credit this program with strengthening their hand in a state where faculty collective bargaining often limits leadership options.

Institutional budgets and the use of information by the Board of Higher Education have been the driving forces behind Illinois' efforts to achieve priorities. The key to success is getting the Governor to approve the budget and part of the trade-off is that the board and institutions of higher education must be receptive to the messages the Governor sends. Even though the board's statutory authority extends only to recommendingbudgetary needs for operations and for capital improvements, the budget process is central to IBHE strategies for coordinating system activities. Institutions cooperate primarily because a constitutionally strong Governor regularly accepts IBHE recommendations. IBHE enhances the informal authority derived from its trust relationships with the Governor and, to a lesser degree with the Legislature, by concentrating on rational, responsible budget recommendations, and by reducing conflict among institutions and sectors.

IBHE coordinates an initiative to improve transfer that is of relatively recent origin. For much of its history, IBHE has been unwilling to jeopardize its consensus approach to program decisions by "arranging marriages" between institutions when the partners-such as the University of Illinois-have been reluctant to participate fully. IBHE has also developed a recent initiative to improve working relationships with K-12. Existing strong relationships between some two- and four-year colleges and between some higher education institutions and their K-12 counterparts are more the product of individual leadership than statewide articulation efforts.

Illinois is one of seven states that treats private institutions as an integral part of its higher education system. A large student financial aid program and the actions of IBHE to limit program duplication help ensure a strong and vigorous private sector. Privates also get more than $100 million in categorical grants annually. They provide 40 percent of all bachelor's degrees, 50 percent of master's degrees, and 75 percent of first professional degrees. Independent colleges and universities voluntarily participated in the PQP Project, although outcomes regarding the independent sector are still unclear. They also participate in such discretionary multi-institutional state programs as the telecommunications agenda, economic development, minority student achievement, teacher education, and the improvement of undergraduate education.

Texas
The Texas Higher Education Coordinating Board (THECB), like its Illinois counterpart, has responsibility for all four of the work processes. The board is charged with the unified development of the system, efficient and effective use of resources, elimination of duplication in program offerings, advocacy of adequate resources for institutions, and advising of the Legislature on higher education issues. The Coordinating Board also manages federal and state student assistance programs. It coordinates community college funding and oversees statewide articulation activities involving two- and four-year subsystems. The board is responsible for preparing a master plan for higher education and for developing the funding formulas through which 85 to 90 percent of legislative appropriations are allocated. Individual institutions determine how budgets are to be spent. The Coordinating Board approves new degree programs and some construction processes. The board strives to be seen as an impartial and objective source of information, which can be provided with or without recommendations by the board. The Legislature has acted without waiting for board advice, as in the case of several subsystem realignments that were authorized during the study. Following this action, however, the Governor, Lieutenant Governor, and the Speaker of the House issued a joint statement that such realignments would be considered in the future only after review by the Coordinating Board. The Legislature reserves the power to set tuition.

The Coordinating Board, which is the primary agency responsible for collecting data on higher education, regularly gathers information on faculty assignments, enrollment by class, and individual student-record data. Board staff members can track students across two- and four-year sectors to provide cohort data for each institution. The Legislature receives both technical and policy information from THECB. The Legislative Budget Board requests fiscal notes from the Coordinating Board on all higher education bills (300 to 500 per session). Beyond fiscal notes, the Coordinating Board receives over 200 requests from the Legislature annually for information related to higher education. Under legislative stimulus, the board has tried to pull together information on performance, an effort that has been successfully resisted to date by institutions.

The Coordinating Board works with institutions to develop a mission statement and a table of corresponding programs. Through the program approval and review process, the board applies the criteria of cost, need, and potential excellence to monitor quality and prevent unnecessary duplication. The review process is most visible at the doctoral level, where outside consultants are involved. The board has also adopted a formative quality-review initiative for community colleges to see if these institutions are performing their missions as established by the Legislature.

Close to 90 percent of legislative appropriations are distributed by formulas developed by the Coordinating Board in consultation with subsystems. While formulas may make it difficult for institutions to address specific priorities through the budget process, system participants believe the formula process is fair and that it eliminates budget battles that might otherwise occur. Despite this budget process, there is considerably less intra-system equity in Texas than in the other study states. (Intra-system equity refers to the extent to which state funding levels for the types of public institutions within a state system approximate national norms for those types of institutions.) Two practices, neither under the jurisdiction of the Coordinating Board, account for the degree of inequity. The Legislature reserves the right to distribute from 10 to 15 percent of biannual appropriations on the basis of special-item funding for which institutional and subsystem leaders compete. Success is contingent upon the effectiveness of lobbying efforts and the power of supporting legislators. Even more important than institution-specific appropriations are the proceeds from the Permanent University Fund (invested oil revenues) that go primarily to the University of Texas at Austin and Texas A & M University.

Most observers told us that transfer and articulation between two- and four-year institutions are less effective than they should be. Yet the Coordinating Board did not at the time of our study have specific initiatives to improve these rates. Community colleges and universities have developed a common course numbering system voluntarily, but there is no common core of general education courses. System discussion of transfer has, however, increased as a result of concerns about remedial education created by the Texas Academic Skills Program (TASP), which mandates testing of basic reading, writing, and mathematics skills for all students entering higher education. Those who score below established levels must undergo remediation before they can enroll in upper division courses.

Private higher education is not actively involved in discussions of state policy issues. A need-based tuition equalization grant is the primary means for including independent institutions in state plans for meeting student demand.

A Unified System

Georgia
The Board of Regents (BOR) of the University System of Georgia (USG) has the power to define institutional missions, to determine the array and size of institutions in the system, to allocate funds to institutions and to determine how much higher education will cost. Upon recommendation of the chancellor, the board acts upon all institutional recommendations regarding faculty, research, administrative and other employee appointments, including institutional presidents. Through its chancellor, the board may also set admission standards and limit enrollments. Because the University System enjoys constitutional status, the only real power reserved to state government is determining how much state money the system will receive. Strategic planning has been a cornerstone of the current chancellor's administration. Most of those interviewed said they believe that initiatives developed through this process reflect the goals and priorities of the state.

The University System collects general information about enrollments and costs. Elected leaders reported that information was often difficult to obtain and that comparable information across institutions was particularly scarce. The situation may be getting better because of advances in the use of technology. Despite legislative interest in accountability, there were no arrangements for reporting performance at the time of the study, though the University System is trying to address the issue.

The chancellor's office and the Board of Regents define and modify institutional missions. Currently, USG institutions are organized into four categories: research universities, regional universities, state universities, and two-year colleges. Each category is authorized to develop specified types of programs. All proposals for new programs undergo a rigorous preliminary review process by USG staff before being submitted to the Regents for final approval. At any point in the process, other institutions can raise questions about duplication and quality. Recently, the process was changed to add a five-year probationary period for new programs. At the time of the study, an external committee was looking at the mission of the entire system and trying to establish specific identities or missions for each institution.

The Board of Regents submits a unified budget to the Governor based on formulas for general support, special initiatives for specific institutions, a general obligation bond request, payback projects, minor capital outlay projects, and the salary request. Each requires its own separate justification. Over 90 percent of the budget is determined through the formula process. Budget battles in the Legislature occur most frequently around special initiative funding. The University System does not use formulas to allocate money to individual institutions. Those we interviewed indicated that institutions believe allocation procedures are fair. In fiscal year 1995, the Regents responded to the Governor's call for redirecting funding priorities for higher education by using funding increases for incentives. Tuition and fees are set at 25 percent of the formulas for instruction, academic support, and student services. In 1995, the Regents reduced tuition at two-year colleges by five percent to encourage more students to begin college at these institutions.

The University System brings institutional administrators together to discuss educational issues. The core curriculum which all share is often a focus. The transfer process works fairly well for the 15 two-year colleges within the system. It does not work nearly as well for the 33 technical institutions that are overseen by the Georgia Department of Technical and Adult Education (DTAE).

At the time of our visit, the University System was undergoing an extensive strategic planning process, led by the chancellor and the Board of Regents. Among the priorities identified through this process are: movement toward a semester calendar, a partnership with DTAE, and a preschool-to-college initiative that aims for systematic collaboration among all sectors of education.

To address what traditionally have been relatively poor college-going rates, the Governor instituted a scholarship program in 1993 that is funded by the lottery. The program, Helping Outstanding Pupils Educationally (HOPE), provides full tuition and fees to students who maintain a B average in high school and go on to attend a public institution in Georgia. Those who maintain that B average in college continue to receive the award.

Even though private institutions account for about 20 percent of the higher education enrollments in Georgia, they have not been actively involved in discussions of state policy issues. The private sector has been included in the statewide library system, however, and in discussions surrounding the HOPE scholarships. Private institutions are also collaborating with their public counterparts at the local level, particularly through an Atlanta organization called the University Centers of Georgia, which has brought together 17 or 18 institutions of all types to find areas for collaboration.

Confederated Systems

Florida
The Board of Regents of the Florida State University System (SUS), which has mission and program responsibility for SUS campuses, negotiates contracts with the unions through which their employees, including faculty members, are organized. The Legislature sets priorities, establishes tuition and funding levels, determines the role of private institutions, and resolves collective bargaining impasses in the University System. The SUS Board of Regents reacts to legislative priorities and attempts to blunt the effects of legislative actions on SUS institutions. The community colleges are organized separately from the University System, and local community college boards have similar responsibilities as the SUS Board of Regents. A statewide coordinating board for community colleges has only limited authority and no capacity for data collection or setting priorities. The Postsecondary Education Planning Commission (PEPC), which has advisory responsibilities to the Legislature, completes its master planning process before the University System, the community colleges, or the private and independent colleges can complete their required strategic plans. The state Board of Education (elected cabinet) is widely regarded as a "rubber stamp" for higher education policy decisions.

The SUS chancellor's office develops and manages a statewide database for public four-year higher education. Most of the information needed by the Legislature about four-year institutions comes from this source. While some policy leaders expressed frustration at the need to rely upon the University System, most said that the quality and timeliness of information are generally satisfactory when the desired information is available within the database. On specific issues, such as the number of excess credit hours students take and the levels of student income at various institutions, the Legislature authorizes special studies. There is no statewide database on community college students and no statewide information on community college performance. The Legislature produces annual statistical reports and profiles on higher education.

The Legislature may legitimately tell the University System to limit student enrollment or, conversely, to take more entering freshmen. They may not tell the Board of Regents that a new educational program should or should not be approved or where it should be located. The chancellor's office gives university presidents a fair amount of latitude in establishing the missions of their institutions. Competition for programs tends to occur where two institutions-like Florida State University and Florida A & M University-are located in close proximity and compete for some of the same programs. Decisions about program approval or discontinuance are made by the SUS office. Local community college trustees exercise similar authority over program approval at their institutions.

Each public university submits a budget to the SUS office based on historical allocations, changes in enrollment or institutional mission, and SUS priorities. The University System submits one budget directly to the Governor and the Legislature, and receives a single allocation with five or six major categories. Each campus receives a lump sum from the University System and distributes the dollars. There is no agreement between the University System and the Legislature on how resources should be allocated to the campuses. For each local community college district, the Legislature provides a lump-sum allocation derived from enrollment growth, previous year's base, and the need for new facilities and programs. Allocations are not affected by enrollment losses, which has resulted in inter-institutional inequities of as much as $800 per student. A recent incentive program established by the Legislature encourages community colleges to give up five percent of their budget in return for earning back more dollars by demonstrating success in completions, graduations and placements. Those whom we interviewed said that the 20 districts that elected to participate gained experience with the performance-based budgeting plan advocated by the Governor and the Legislature.

Although there is no single agency in Florida other than the Legislature with responsibility for articulation and collaboration, there are many statutory provisions that acknowledge its importance. Florida's two-plus-two policy promotes the recognition and use of community colleges as the primary point of entry for postsecondary education. A statewide articulation agreement guarantees community college transfers with an associate of arts degree entry to the upper division of one of the state universities. These students are not, however, guaranteed their choice of program or institution. Student transfer is supported by an articulation coordinating committee, a statewide common course numbering system, discipline-specific articulation agreements among institutions, a network of institutional articulation officers, and such acceleration mechanisms as dual enrollment, early admission, and credit by examination. Despite this abundance of support programs and services, legislators are concerned that a substantial number of excess credits are taken by community college students. There is also concern about the "bottleneck" in many upper-division majors for both native university and community college students.

Private higher education, which accounts for 36 percent of Florida's baccalaureate enrollments, is an integral part of the state's higher education system. For high demand programs, the state pays the difference between public university and private institution tuition. The state also provides need-based tuition equalization grants for student who choose to attend a private college or university and offers direct institutional grants to private institutions. In total, state aid to private institutions now approaches more than $53 million annually. Statewide master planning, coordinated by PEPC, is the process used to draw the private colleges and universities into the overall higher education system in Florida.

New York
In the State of New York, higher education's governing structures and processes must be understood in the context of the overarching state regulatory agencies that permeate them. Most staff (other than faculty) of the State University of New York (SUNY) are employees of the state, subject to civil service regulations and collective bargaining agreements negotiated by the Governor's Office of Employee Relations. Tuition is effectively controlled by statutory restrictions upon differentials and limits on the authority of trustees to set tuition schedules. Expenditure and contract authority, except for specific exemptions, is reserved to the state. The Division of the Budget has the authority to alter downward the legally approved budgets for SUNY and the City University of New York (CUNY) if the state budget is out of balance. The New York Board of Regents has responsibility for preparing a master plan for all of higher education in the state, public and private. Prior to 1995, master plans were developed every four years with amendments every two years. When Governor Pataki came into office, this planning process was lengthened to eight years with amendments every four. The Regents also have ultimate program approval authority in the state. The State Higher Education Services Corporation is responsible for the administration of student financial aid. All public higher education institutions are organized into two geographically distinct, heterogeneous subsystems, each with its own appointed governing board. SUNY has many small and diverse campuses that are widely dispersed across the state outside New York City. The 30 community college districts within SUNY have local governing boards. CUNY appears more like a subsystem due to: its history as a city university in which campuses enjoyed substantial autonomy, a relatively specific mission without the "prestige pyramid" found in SUNY, the geographical proximity of campuses and public transportation, and a graduate center that serves the entire subsystem. CUNY negotiates its own collective bargaining agreements and has close relationships with the political power base in New York City government, which provides the local share of funding for CUNY's six community colleges.

The Regents monitor graduation rates and require institutions to publish time-to-degree information, including successful completion of licensing examinations. The Regents are also working on other performance indicators that would reflect the separate directions that institutions set. The independent sector relies on information collected by the Regents and uses it to support their requests to the Legislature. SUNY central staff believe that good information about performance and relative levels of quality and activity at different institutions is available, but that neither the central office nor the SUNY Board of Trustees has used it to the extent they should. The CUNY central office is upgrading its management system, but does not at present have the capacity to collect needed information from campuses.

In theory, institutional missions are defined and modified in the eight-year statewide plans prepared by the Regents from information submitted by CUNY, SUNY, and private institutions-and then approved by the Governor. In fact, the missions of SUNY campuses appear to be defined loosely by such functional types as universities, four-year colleges, and two-year colleges. Campus missions may be modified by the Regents' program reviews when new major programs are proposed or existing ones reviewed. The Regents' reviews focus on quality and have been credited with keeping "degree mills" out of the state. In the 1970s, the Regents terminated several doctoral programs at SUNY, an action that was subsequently upheld in the courts. SUNY does not appear to have any active programs for monitoring program quality or productivity. It does review campus proposals for new programs for unnecessary duplication before forwarding them to the Regents. CUNY has a more specific mission than SUNY, calling for the strongest commitment to the special needs of its urban constituency. Through a recently adopted planning process, CUNY is beginning to review all programs for unnecessary duplication and productivity. It is not clear that this process reaches, or tries to define, quality.

Until recently, the budget requests of both SUNY and CUNY have been aggregations of campus requests after internal review. At present both subsystems are maintaining this approach for such core items as salary increases and inflation, but are consolidating special campus requests and tying them to subsystem-wide initiatives. Neither SUNY nor CUNY uses explicitly enrollment-driven formulas in developing budgets. The Governor's budget is lump-sum form, but the Legislature attaches riders with line items for specific campuses. Aside from the Governor's objective of reducing expenditures, there do not seem to be any explicit state priorities to which allocations are tied. SUNY and CUNY exercise reasonable authority to allocate appropriations among campuses cautiously. In SUNY, increases have been allocated essentially "across-the-board." Allocations in SUNY are perceived as essentially fair, although there are concerns among larger institutions about the high costs of maintaining small campuses. There are also concerns at SUNY about the significantly higher operating costs for the statutory colleges at Alfred and Cornell Universities. CUNY has begun to allocate funds to campuses to reflect the chancellor's priorities, as reflected by the decision to fund a central institute for English as a Second Language with funds requested for campus programs. CUNY also uses its control over new faculty positions to encourage compliance with subsystem priorities. New York has the most equitable intra-system allocations among the seven states, meaning that state funding for its types of public institutions closely approximate the national norms for those institutional types.

Responsibility for collaboration and articulation is implicit in the heterogeneous SUNY and CUNY structures. SUNY has tried to improve articulation by giving additional funds to four-year colleges based on their enrollments of two-year college graduates. Those we interviewed said that they believe that articulation works well within each of the subsystems. CUNY was perceived as more focused and more responsive to changing financial circumstances than SUNY. This difference seemed due to CUNY leadership, geographic proximity, and institutional traditions that include consortia arrangements. The Regents' broad responsibilities for both higher and basic education does not appear to have strengthened coordination or collaboration between schools and colleges, except in the area of teacher education. Both subsystems do have institutional initiatives that aim at closer working relationships with the public schools.

The 107 private colleges and universities in New York dominated higher education for more than two centuries. They still enroll 40 percent of the state's students and produce 58 percent of the baccalaureate degrees, 69 percent of the graduate degrees, and 83 percent of first professional degrees. Bundy Aid, administered by the Regents, provides approximately $40 million annually (down from $100 million in 1990) directly to private institutions based on the number of degrees they award. About 40 percent of the students in private institutions participate in the need-based Tuition Assistance Program (TAP), which is an entitlement program. The major vehicle for private sector participation in policy decisions is the Regents' program review process, where public and private institutions compete to offer new major programs.

California
The California Postsecondary Education Commission (CPEC), which serves as an advisory agency to the Legislature, Governor, and postsecondary institutions, has statutory authority to establish a statewide database, to review institutional budgets, to advise on the need for and location of new campuses, and to review all proposals for new academic programs in the public sector. While the commission was founded to be an independent voice on higher education, there are not a lot of teeth in the legislation. A voluntary coordinating committee, the California Roundtable, supplements CPEC, periodically waxing and waning depending upon leadership provided by the California State University (CSU) and the University of California (UC). The California system was designed to maximize the influence of professionals and to minimize external intrusions, and it achieves that objective. Institutions of public higher education are divided into three tiers with single governing boards for the two four-year segments and a coordinating Board of Governors for locally governed community colleges. UC Regents do not evaluate the president, who is a voting member of the Regents, and they do not receive information about the relative performance of the nine campuses they oversee. They typically do not get involved either in curriculum decisions or in actions involving academic personnel, as they have formally delegated these decisions to the academic senates. Much of the work on the budget is done without input from the Regents and they do not approve the formula used to distribute legislative allocations among campuses. The university is the only public segment in California with constitutional status. Although subject to less regulation than in the past, the 22-campus California State University still faces significant state control because it lacks the constitutional status of the UC subsystem. Among community colleges, the role of the state coordinating board remains unclear and faculty dominate local governance through the trustees they help to elect, the collective bargaining agreements local boards subsequently negotiate, and through shared governance, which seems to cover any contingency not resolved through collective bargaining. Many policy makers view community colleges in their present structure as essentially ungovernable. The primary powers reserved to the state (apart from close regulation of CSU and community colleges) involve the determination of annual appropriations for each segment (attenuated in the case of community colleges by voter initiatives) and the appointment of members of the UC Regents, the CSU Trustees and the community college Board of Governors. A separate Student Aid Commission administers state and federal student financial aid programs. Periodically, the Legislature or the Governor commissions studies of the Master Plan. Past reviews have been more noteworthy for the political battles they generated than for the amount of change they instituted.

Providing information may be CPEC's most important current function. Annual CPEC reports deal with such issues as faculty salaries, executive compensation, and higher education performance. There are fact books on fiscal profiles and student profiles as well as topical reports in such areas as: "three strikes" legislation; plans for record student enrollment levels expected over the next decade; improved outcomes; and community college student charges. CPEC's credibility in producing these reports is impaired by the degree to which the commission must rely on subsystem sources for data. Most policy makers believe the reports raise only those issues that the segments want to raise, and that the segments do not make an effort to provide information that might put them in a bad light. The Department of Finance, and the Office of the Legislative Analyst also publish occasional reports on higher education issues. UC receives the most criticism for the quality, accuracy, and timeliness of the information it provides to those outside the university. Most respondents indicated that CSU has been better about furnishing information. Since the two segments see themselves as being in competition with each other, they are careful about what information is furnished to whom. Information about community colleges is difficult to characterize because its sources are so diverse and fragmented. While some districts provide excellent information to their local constituencies, the overall picture is confused and chaotic. In the current policy environment, it is not clear that more or better information would necessarily have much impact. The Governor vetoed a student information system for CPEC that had been approved by the Legislature. The Governor and Legislature find it much easier to cut deals with segment heads on the basis of political philosophy and available resources than to try to make sense out of data pried from reluctant segments.

Institutional missions are embedded in the Master Plan. In the more than 30 years that have passed since the Plan was adopted, it has been revisited five times, most recently in 1986. While there have been a number of attempts to reform community college governance, the original allocation of jurisdictional responsibilities has remained intact. The program review process is primarily campus-based. There is a fairly serious review of new programs and programs considered for discontinuation by the four-year subsystem offices. CPEC keeps an inventory of programs and must review new majors, new programs (the School of Public Administration, for example), or joint doctoral programs. While there is some question as to whether CPEC could prevent a degree or program from being offered, the subsystems typically work with CPEC to negotiate around problems that develop. Community college districts can offer new courses-but not new programs-without approval from the statewide Board of Governors. In approving programs, the board looks only at duplication with the offerings at nearby community colleges and does not consider the impact on other parts of California higher education.

Subsystem heads interact directly with state government in the annual budgeting process. The Department of Finance develops the budget that is introduced by the Governor. The Budget and Finance Committees in the Senate and Assembly consider higher education as part of the single central budget that includes all state expenditures. The Office of the Legislative Analyst is the nonpartisan body that has responsibility for reviewing budgets. Recently, the Governor has taken a direct role in the budgeting process by negotiating agreements with the segment heads for UC and CSU. The president's office coordinates the development of a unified budget for the University of California. Priorities are the result of meetings among the chancellors and their planning and budgeting vice chancellors. Once the Legislature has made its lump-sum appropriation, funds are divided among campuses through a formula determined by the university. Campuses have substantial latitude over the funds they receive through whatever formula the subsystem agrees upon. The California State University develops a unified budget request that articulates priorities previously discussed with the Executive Council, which is composed of the chancellor and campus presidents. Allocations are heavily enrollment-driven with a base for each campus to which incremental changes are made based on changes in enrollment. Apart from special circumstances, institutions can gain or lose two percent in enrollment without affecting their base funding level. Campuses negotiate with the chancellor for additional monies that may be available based on increases or decreases in enrollment, enrollment targets and subsystem initiatives. State appropriations for community colleges are driven by Proposition 98, which requires that 40 percent of general fund revenues go to public schools with an unspecified proportion reserved for community colleges. In practice, that proportion has hovered around 11 percent. Allocations to districts are formula driven and largely incremental since the amount of funding for enrollments is capped. Tuition and fees are set by the state. The state also has about 20 categorical programs ranging from disabled students through economic development and increasing transfer rates. Together these programs represent from 10 to 15 percent of the total appropriation. Community colleges are widely regarded in California as seriously underfunded. Within each of the three segments, intra-system allocations are reasonably equitable, ranking slightly below the national average.

California provides many examples of collaborative activity between individual institutions. In California, however, no one is in charge of articulation. There is general agreement that the subsystems need to work together more closely to be sure that students are prepared to succeed. The Intersegmental Coordinating Council (the operating arm of the Education Roundtable) serves as a voluntary arrangement for working across segmental boundaries. Whatever is not worked out voluntarily is left to the Legislature. The Legislature has tried to fill the coordination vacuum with transfer centers, course articulation numbering systems, a mandated general education core, and, most recently, a common course numbering system. Transfer works reasonably well between community colleges and the state university, which is very dependent upon transfers to fill upper division classes. It works less well with the University of California despite the strong influence UC exercises over core courses, not only for community colleges but for CSU as well. Even where it works well, there are problems. CPEC tries to keep score on transfer successes and failures, but its efforts are inhibited by the absence of a student information system that permits cohort tracking.

Private institutions have a distinctive niche in California higher education that has not been fully exploited, partly because the California Constitution prohibits direct support to private entities. Private institutions enroll 22 percent of all undergraduates in four-year institutions, 48 percent of master's degree students, 60 percent of those seeking doctoral degrees, and 67 percent of those pursuing first professional degrees. Language inserted in the 1987 Master Plan revision requires the state to consider the capacity and utilization of the private sector in making planning decisions. Current estimates suggest that the private sector might be able to supply from 10,000 to 40,000 slots, or about ten percent of the projected enrollment surge expected over the next decade. There are three main points of contact for independent colleges with the rest of higher education: Cal Grants; the Cal Higher Facilities Bonding Authority; and voluntary informal relationships such as the California Higher Education Roundtable. While a representative of the private sector sits on the Roundtable, and individual presidents of major institutions like Stanford have influence in the state, the overall impact of the private sector in California remains weak.

A Confederated Institutions System

Michigan
Michigan has no statewide agency with significant responsibilities for higher education, and all four-year institutions have constitutional status. Each public university, with the exception of the University of Michigan's (UM) two branch campuses at Flint and Dearborn, has its own governing board with exclusive responsibility for management and control. Universities are regarded as the "fourth branch" of state government. While the 1963 Constitution charged the state Board of Education with serving as the general planning and coordinating body for all of higher education, a 1975 court decision found that UM did not need the board's approval to expand or establish programs, effectively limiting the authority of the state board to advising the Legislature on requests for funds. Universities have refused to cooperate with the State Board of Education and resist any perceived encroachment on their constitutional authority. A voluntary Council of University Presidents develops positions on the state budget, monitors legislation, provides limited data collection and dissemination, reviews academic programs, and serves as a vehicle for interacting with state government. Activities of the council are supported by an extensive committee structure involving provosts, academic deans, business officers, governmental relations officers, and others. The policy community believes that universities use the council for those issues that benefit them, but primarily stand by themselves. There are two statewide structures for Michigan's 29 community colleges. The first is the Michigan Community College Association, a voluntary association that concerns itself primarily with legislative advocacy. The association also facilitates the exchange of information among member institutions and provides in-service development programs for local trustees. The second is a Community College Board created in the 1963 constitution as an advisory body to the state Board of Education. The importance of the Community College Board can be inferred from the Governor's actions in cutting its budget significantly and in eliminating board member per-diem expenses for meetings. State government has reserved the power to determine the appropriation each institution receives each year.

Michigan has no information about the performance or participation of minority groups, the success of remedial education, how money is being spent, or what the state receives for its investment in higher education. Most of the information that is collected and used for any sort of analysis for universities goes into the Higher Education Information Data Inventory (HEIDI), which resides in the Department of Management and Budget (DMB). HEIDI is oriented to provide expenditure and faculty compensation data rather than performance data. Those who use the database describe it as inadequate and inaccurate. HEIDI is not compatible with the Integrated Postsecondary Education Data System (IPEDS) database, which resides in the state Department of Education. The department has made several attempts to get funding to improve information collection and dissemination, but four-year institutions have been successful in defeating these efforts. Because the department has responsibility for approving programs for institutions receiving federal funds, community colleges have regularly collected and reported information to ensure eligibility. Universities prefer to limit data collection to the DMB because that is where their budget decisions are made.

Individual institutions define and modify their own missions. A voluntary approval process for new programs for universities is operated under the auspices of the Presidents Council, which provides a check on quality, but does not limit program duplication. If a program fails to win approval, it will not be added to the "boiler plate" language in the legislative appropriation. Failure to win approval is not necessarily a deterrent, as evident from the pharmacy school at Ferris State and the engineering program at Grand Valley State, both of which were not approved but were implemented anyway. Universities have also begun to establish centers across the state where they offer bachelor's and master's degrees, sometimes without the requirement of attending the main campus. No one (other than the regional accrediting association) has responsibility for monitoring such institutional decisions, which have resulted in further program duplication. Community colleges present fewer problems due to their geographic boundaries and because the state Department of Education must approve programs that receive federal funds.

The only way for state government to influence higher education in Michigan is through the budget process. Universities submit their requests to DMB. Budget requests include information on current and prior year FTE positions, faculty salaries, enrollments, and tuition and fee rates. DMB pays little attention to the requests because they invariably are too high. DMB calculates the increase for higher education by looking at the percentage of revenue growth for the state. Funding is based primarily on historical funding patterns over the past 30 years. While the Legislature is attentive to the priorities of the Governor, it typically provides a lump sum to each institution at a common rate of increase. Institutions can spend their appropriation as they see fit. When enrollment growth outpaced funding at some institutions, the Presidents Council successfully called for a one-time infusion of funding into the base budget to establish a minimum funding floor per student. A funding increase for Michigan State University (MSU) in 1995-96, engineered by the Governor without council endorsement, created controversy and hard feelings. Generally, however, institutions view the allocation process as fair as long as the "pecking order" is maintained. Community colleges are funded by a formula that is largely driven by changes in enrollment. The formula does not penalize institutions that experience enrollment declines. The formula is never fully funded and not even fully used, since about half of the increases for this segment are typically distributed across the board. Michigan stands at the national average in terms of the equity of its intra-system allocations.

The relationship between institutions of higher education and K-12 schools was described by interviewees as relatively poor. Language in the fiscal year 1996 appropriation bill called for institutions of higher education to report information on the performance of students to the high schools they graduated from, but the language is not binding because of constitutional autonomy. There are also dual enrollment programs that allow high school seniors to enroll in college or university courses for credit, with the state paying the tuition. A transfer agreement between two- and four-year institutions developed in the 1970s by the Michigan Association of Collegiate Registrars and Admissions Officers defines the courses that would be accepted by each signatory as fulfilling general education requirements. The agreement is of limited value because not all of the state's four-year institutions have signed it, and those who did sign it subscribe to its provisions to varying degrees. Apart from local efforts at articulation, the state Board of Education publishes transfer surveys primarily, we were told, to embarrass universities that have poor records for accepting and graduating community college transfers.

Private institutions enroll about 15 percent of the FTE student enrollment in Michigan. The private sector is included in state policy decisions to the extent that the state provides $425 for each general bachelor's or master's degree awarded by a private institution, and half that amount for an associate degree. Private institutions also receive approximately $2,000 for each bachelor's or master's degree awarded in a health field that required clinical experience or state licensing. Because the state does not want to open an additional dental school, it provides a flat grant of $4 million annually to the University of Detroit's Mercy Dental School. There is also a need-based tuition grant program for students attending private institutions and three other small financial aid programs. Financial aid programs in Michigan do not compare-in terms of dollar amounts-with the much larger aid programs in New York, Illinois or Florida.

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Historical Influences on System Design and Governance Structures

Several historical factors-such as the constitutional strength of the governor, the constitutional status of institutions, voter initiatives, and political influences-affect system design and governance structures. Table 2 provides a summary of some of the constitutional factors that influence governance structures.

Table 2
Constitutional Factors Affecting Governance Structures

State
Type of Governance System
Constitutional Strength of Governor*
Constitutional Status of Institutions
Illinois
Federal System
Strong
No public institutions have constitutional status.
Texas
Federal System
Weak
No public institutions have constitutional status.
Georgia
Unified System
Moderate
University System of Georgia institutions all have constitutional status.
Florida
Confederated System
Weak
No public institutions have constitutional status.
New York
Confederated System
Strong
No public institutions have constitutional status.
California
Confederated System
Strong
University of California has constitutional status; other public systems do not.
Michigan
Confederated Institutions
Strong
All four-year public institutions have constitutional status.
* From J. M. Burns, J. W. Peltason, and T. E. Cronin, State and Local Politics: Government by the People (Englewood Cliffs, NJ: Prentice-Hall, 1990), p. 113.

Illinois
Illinois has a constitutionally strong Governor who historically has exercised leadership on higher education issues. In 1961, the state established a system of subsystems for higher education that was coordinated by the Illinois Board of Higher Education (IBHE), which was given relatively weak statutory authority. This system of subsystems was created partly to bring together and thereby improve the capacity of several smaller four-year institutions to compete with the University of Illinois (U of I) and Southern Illinois University (SIU), which remained as separate subsystems. One of the first actions of the new board was to create a network of locally governed community colleges, coordinated by a state community college board, which in turn was made subordinate to IBHE. Private, nonprofit institutions, historically strong in urban areas, were defined as an integral part of the Illinois system in the late 1960s, thereby limiting the growth of public four-year institutions. Concurrently, Illinois created a need-based Monetary Award Program to assist undergraduates. By 1994, this program was the third largest in the nation. In 1995, the Legislature ended the system of subsystems by abolishing two subsystem boards and replacing them with individual governing boards for seven of the eight affected institutions. Faculty in most higher education institutions other than the University of Illinois are organized for collective bargaining.

Texas
In Texas, which has a constitutionally weak Governor, leadership on higher education issues has come from the Legislature and the Lieutenant Governor. In contrast to the "orderly and rational" Illinois system, higher education in Texas seems "ever-changing" and "unplanned." Actions that converted two-year colleges into four-year colleges and that created upper division institutions that subsequently added a lower division were based on growth but not on planning. Those we interviewed agreed that governance structures are primarily the result of political influence. Depending upon whom one asks, however, the Texas Higher Education Coordinating Board (THECB) was created in 1965 either as "an attempt by the Legislature to limit its own discretion," as an attempt "to coordinate the disorganization," or as a referee or scapegoat to keep subsystems from having to make unpopular decisions. Regardless of how its role is characterized, the Coordinating Board must carry out its system responsibilities-for 40 public four-year institutions organized in a mix of six multi-institution subsystems and four free-standing campuses; 50 community college districts; and 40 private institutions-in an environment that often involves antagonism both from the Legislature and from some of the subsystems.

Georgia
Georgia's Governor exercises significant influence on higher education through his powers of appointment and his influence on the budget process. The current Governor has made higher education a priority. The Georgia system is the most simple of the seven in its design. A 1931 decision placed all degree-granting institutions under the supervision of a single governing board. Following a 1941 attempt by the Governor to intervene in the hiring and firing of administrators, the state ratified an amendment that gave the board constitutional status to govern, control, and manage the system. In 1996, the University of Georgia system included 15 two-year and 19 four-year institutions. Two-year institutions have been used less extensively than in other study states.

Florida
Florida has a constitutionally weak Governor. The Appropriations Committees of the House and Senate make most of the important decisions about higher education spending. Under single-party domination, past governors have provided significant leadership on higher education issues, but with the emergence of a more competitive political system, gubernatorial influence has weakened. The history of the Florida system includes legislative control extending to individual salaries, campus locations, size of buildings, and expansion of academic programs. In 1956, the state created an ambitious state community college subsystem. In 1968, community colleges gained independent governing boards appointed by the Governor and in 1979 a weak coordinating board whose powers were strengthened somewhat in 1983. Until the establishment of a single governing board for all four-year institutions in 1965, four-year institutions operated under the supervision of a state Board of Control. The Board of Regents, which replaced the Board of Control, was described by many interviewees as "control-oriented" in its relationships with the ten campuses that currently comprise the subsystem. In addition to the state Board of Education, which is comprised of elected cabinet heads, the Postsecondary Education Planning Commission (PEPC) has provided information and policy analysis to the Legislature and Governor since 1980. Faculty in the State University System and in most community colleges are organized under the terms of a weak collective bargaining statute.

New York
A constitutionally strong Governor in New York State has historically exercised leadership on higher education issues. A full-time Legislature divided between upstate Republicans who dominate the Senate and downstate (urban) Democrats who control the Assembly serves as "custodians" of higher education with a "fairly significant role" in setting the missions for the public campuses. In 1948, a diverse collection of two- and four-year institutions located outside New York City were combined under a single governing board as the State University of New York (SUNY). By 1996, the subsystem had grown to 64 campuses, five of which were "statutory colleges" located at private Cornell University and Alfred University. Within SUNY are 30 community colleges, each governed by its own appointed board of trustees. Through a similar metamorphosis, the City University of New York (CUNY) grew from two four-year institutions under a single governing board in 1926 into a merged two- and four-year subsystem in 1961, and ultimately to a subsystem of 13 four-year and 6 community colleges, all located in New York City. Despite these developments, private institutions dominated higher education until the 1960s. A state agency, the University of the State of New York Board of Regents, dating from 1784, has responsibilities for all education and provides limited coordination for higher education in areas related to quality assurance, long-range planning, and equity and access. A separate state agency administers student aid. CUNY has one of the first and strongest faculty unions in any public setting in the United States. Collective bargaining agreements are negotiated for SUNY (excluding community colleges) by the Governor's Office of Employee Relations.

California
California has a constitutionally strong Governor whose influence on higher education is pivotal, but recent governors have not exercised much leadership on higher education issues. Voter initiatives (including property tax limitations, income and inheritance tax limitations, set asides for public schools and community colleges, and term limits for legislators) and a severe recession have restricted state revenues as well as the continuity and freedom of action of elected state officials. The 1960 California Master Plan recognized three subsystems, each with its own, defined clientele and specified program authority. Constitutional status, as interpreted by a series of court decisions during the 1970s, lead many to describe the nine-campus University of California (UC), governed by a single Board of Regents, as "the fourth branch of state government." A powerful universitywide Faculty Senate dominates the process of selecting campus and university leaders and consults directly with the Regents on all policy decisions. The 22-campus California State University (CSU), under a single Board of Trustees has a history of being micro-managed by state agencies. The state university also has had administrative/faculty tensions that have resulted in statewide faculty collective bargaining. Community college districts with elected local governing boards have existed since 1921. Their fiscal status became problematic in 1979, however, when a voter initiative effectively ended governing board authority to levy local taxes. The 1979 initiative did not affect responsibilities for negotiating collective bargaining agreements. Reviews of the California Master Plan for Higher Education in 1974 resulted in replacing the Coordinating Council for Higher Education with the California Postsecondary Education Commission (CPEC), charged with advising the Governor, legislators and institutions of higher education on major educational policies. A 1988 review led to a strengthened statewide Board of Governors for coordinating the community colleges, as well as shared authority for community college faculty, who were already highly organized for collective bargaining.

Michigan
Michigan's constitutionally strong Governor is the state's most influential higher education leader. An historically powerful Legislature recently has been challenged by shifting political currents and term limits. The University of Michigan (UM) was the first institution in the nation to be accorded constitutional status (in 1850), partly as a result of political interference in its operations, including legislative and gubernatorial involvement in the selection and removal of faculty. Three subsequent constitutional revisions have preserved and strengthened the state's tradition of institutional autonomy, extending constitutional status to other senior institutions in the state. Each institution and the UM subsystem has its own governing board with those for Michigan State University (MSU), Wayne State University and UM chosen in statewide elections. Michigan's 29 community colleges, each with its own elected governing board, serve about 80 percent of the state's population. There is no dominant private university. Many of the 14 or 15 percent of the students served by the private sector are enrolled in career programs in business and other vocational/technical fields. While the 1963 constitution assigned the Board of Education and its advisory Community College Board with planning and coordinating responsibilities for higher education (consistent with the constitutional status of institutions), subsequent court decisions and funding cuts have completely eroded any responsibility that the Board of Education might have been intended to exercise for higher education. Both the universities and the community colleges have developed separate arrangements for voluntary coordination. With the exception of UM, MSU, and Grand Valley State University, faculty at all Michigan institutions have collective bargaining agreements.

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Links Between Contextual Changes and State Priorities
for Higher Education

Illinois
At the time of our study, Illinois boasted a healthy economy and high per capita income. Forecasts predicted stable enrollment growth for higher education. The major challenge for elected leaders involved finding ways to respond to growing demands from public safety and health care in the face of declining federal dollars. Republican domination of both houses of the Legislature and major elected state offices provided a supportive environment for system changes in governance structures with the avowed purpose of making regional universities more responsive both to state government and to their constituents. None of these contextual changes seemed of sufficient magnitude to require significant structural or performance changes in Illinois higher education.

Despite the absence of major contextual changes, elected leaders-particularly the Governor and Lieutenant Governor-sent strong messages to higher education to prioritize, to emphasize quality, "to do what you do best." Legislators invested in technology to provide a different form of access through distance learning. Elected leaders and their appointees also emphasized the quality of undergraduate instruction, affordability, productivity, efficiency and accountability.

Texas
In Texas the most important change in context involves a projected growth of 100,000 students (12.5 percent) from 1994 to 2000, with disproportionate increases among the minority population. If Texas is successful in increasing participation rates among minorities so that they equal those for Anglos, the projected increase in enrollments would more than double. The economy has recovered from a severe recession in the late 1980s, but higher education will face increasing competition for state resources. The best guess is that the growth in enrollment and student diversity will outstrip the current capabilities of the higher education system in the absence of significant change.

Priorities for higher education in Texas must be inferred more from legislative action than drawn from official statements. Higher education is always a priority for the Legislature even though this is not overtly stated. Legislators support access through a policy of low tuition in all public institutions. They are also interested in quality and accountability, as is evident from legislative support of the rising junior exam, legislative backing for the remediation embodied in the Texas Academic Skills Program (TASP), and two unsuccessful legislative attempts to implement performance funding. Through competitive programs for funding faculty research and advanced technology applications, the Legislature has spent more than $650 million each biennium since 1987 in support of a priority for economic development. And the criteria used by the Texas Higher Education Coordinating Board (THECB) in its program review process, with tacit support from the Legislature, include cost, need and quality.

Georgia
The Georgia economy has been strong and has grown in the 1990s as it has changed from a predominantly rural to a predominantly urban one. The state passed a lottery under the leadership of the current Governor, who has jealously guarded the proceeds as a supplement to education dollars. The possibility of fewer resources in the future as a result of the passage of tax reduction legislation has been addressed in part through a proposal from the Governor calling for all state agencies, including higher education, to redirect five percent of their budgets. Enrollments in the University System of Georgia increased by 50 percent from 1985 to 1995 with an additional 11 percent expected by the year 2000. Given that the higher education system has already made significant changes to position itself for the next century, additional strategic responses should be sufficient to cope with foreseeable contextual change.

While elected leaders actively identify and support priorities for higher education, as evidenced by the focus on access of the HOPE scholarships, many of the priorities arise from within the constitutionally autonomous system. At the same time, the current chancellor, who is highly regarded by elected leaders, spends much of his time communicating with the Governor and legislators to ensure support for priorities which, if not announced by elected leaders, are cleared with them in advance. The chancellor's priorities-for a seamless preschool-through-college education system, accountability, quality in academic programs, and the development of human resources-are all supported by the Governor. The Governor and the Legislature also have endorsed the system's success in preventing mission creep and in strategic planning to promote excellence, collaboration and the efficient division of responsibilities.

Florida
Florida experienced a severe recession in the early 1990s, when state revenues were stagnant for three years. The absence of a sales tax and citizen-led initiatives setting revenue and spending limits will make funding higher education increasingly problematic and competitive. At the same time, both the younger and older populations are growing, which is placing increased pressures on social services. It will be difficult for the higher education system to respond to a changing economy and increasing diversity in age and ethnicity without significant changes to the way higher education is currently delivered in Florida.

Elected officials set the policy agenda for higher education through a political process that some campus actors perceive as micro-management focused around specific strategies. As in Texas, priorities for higher education in Florida must be inferred from legislative actions as well as from the statements of public officials. The high priority placed on efficiency and improved productivity is apparent from the initiative to limit the number of state-funded credit hours for associate and baccalaureate degrees as well as the Governor's emphasis on performance-based budgeting and accountability. The Legislature remains committed to maintaining access through low tuition. The state's focus on economic development can be found in its efforts to create a highly skilled work force and in the importance placed on applied research. The Legislature has also introduced salary incentives for exemplary teaching and has reduced the importance of its rising junior exam (CLAST) as a "gatekeeper" to the baccalaureate degree by allowing students to demonstrate academic readiness through such alternatives as good grades.

New York
Public and private higher education sectors in the State of New York operate in an intensely competitive and partisan political environment. The most important contextual change was the election of a Governor on a platform that promised to cut taxes and shrink government. Although cuts have not been as extensive as the Governor originally proposed, both CUNY and SUNY received significant reductions in state funding in 1995 and 1996. The Governor's attempts to reduce state funding have increased competition for funds. Although the state economy suffered in the early 1990s, it has now leveled off. While there are no significant enrollment increases forecast for SUNY, a probable increase in demand by lower income groups has been projected by CUNY. CUNY also expects increasing numbers of non-English-speaking immigrants. Based on the current political environment and the Governor's priorities, it is not difficult to make the case that higher education in New York State faces the need for significant change.

Many people we interviewed said that the current Governor's priorities for higher education are improving educational outcomes within the two public subsystems while simultaneously enhancing economies of scale. The Assembly safeguards such CUNY interests as access, while the Senate focuses more on quality, economic development, and SUNY. Some believe that differences between the two chambers of the Legislature are more significant for higher education than the Governor's priorities. Most agree that no one is really looking out for the whole picture.

California
California continues its recovery from the worst recession since 1929. The effects of the recession are apparent in a relatively high unemployment rate, more low-paying and fewer high-paying jobs, a slippage in the educational levels of some segments of the labor force, and growth in the younger nonworking population. California is the most diverse state in the United States, with close to one-third of its population comprised of non-Caucasian groups. Hispanics are the largest and fastest growing minority. The Asian-American population is also growing rapidly. Four out of every five new Californians in the 21st century will be either of Hispanic or Asian origin. Student enrollment in higher education is expected to increase by over 450,000 students over the next decade, an increase of about 28 percent. Opinion is divided on the magnitude of the response required by higher education to address these contextual changes. Leaders within each of the public subsystems believe that the sum of their individual responses will add up to what the state needs if there is sufficient funding. Concurrently, interviews with California leaders and the general public conducted by Public Agenda, as well as our own interviews, revealed little confidence that higher education issues can be addressed with real purposefulness within the existing system.

The political environment sends few clear messages to higher education because of shifting political philosophies, uncertainties about the effects of term limits, the autonomy of the University of California, and the difficulties in governing the community colleges. Most refer to the priorities of access and quality embedded in the Master Plan, while concurrently acknowledging the state's inability to continue funding higher education at the same levels as in the past. A budget compact between the Governor and heads of the two four-year subsystems suggests continuing concern for access and affordability, as do the Governor's and Legislature's actions in buying out the first two of four years of agreed-upon tuition increases. In addition to access and affordability, some legislators attach importance to economic development through research, quality of instruction, and improved collaboration with the K-12 system. Underlying modest efforts to revisit state priorities is a sense of considerable complacency with what the higher education system currently delivers as long as the system does not cost too much money nor conflict with the Governor and Legislature.

Michigan
After years of fiscal crisis due to downsizing in the auto industry, Michigan is now experiencing relatively stable economic growth but growing budgetary pressures from corrections and Medicaid. The state faces only moderate growth in higher education enrollments. The most unsettling contextual change was the imposition of term limits, which some believe will create a more activist Legislature with greater interest in obtaining information about how appropriations are being spent. Term limits may also threaten the "pecking order" of institutions and the practice of providing incremental budget increases without regard for institutional growth, decline, or performance. Stable resources and declining numbers of high school graduates appear to insulate Michigan higher education from the need for significant change.

Elected leaders have been supportive of higher education. While there is no consensus about what the state looks for from its higher education system, implicit priorities include economic development, efficiency, quality, relevance, and affordability. Affordability was the single issue most commonly cited by those we interviewed as a state priority, reflecting Michigan's highest-in-the-nation tuition charges. Beyond affordability, the Governor has also been concerned about productivity as reflected in two actions: his veto of the Highland Park Community College appropriation on the grounds of mismanagement and declining enrollments; and his controversial attempt to alter the general across-the-board appropriations for all four-year institutions to reward those institutions that limited tuition increases and had productivity improvements.

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System Performance

Responsiveness to State Priorities

Elected leaders in Illinois are sometimes impatient with the pace of change, but most believe that higher education is doing a good job of responding to state priorities. In Texas, there is general satisfaction with the higher education system, although there are some concerns that it is "messy" and irrational. Policy makers in Georgia believe that higher education has been responsive to state priorities, particularly through the strategic planning process currently underway. Elected leaders in Florida believe the State University System stalls and resists legislative initiatives. While Florida's community colleges are seen as more responsive, leaders want more and better information from both segments. The New York State system does not appear to have priorities other than the implicit ones of access and quality, and the Governor's explicit calls for greater efficiency. There is general satisfaction with system performance on access and quality. The Governor's appointment of "activist" trustees to SUNY suggests dissatisfaction with efficiency. California has established no priorities for higher education beyond those that can be inferred from the Master Plan or from the Governor's budget compact. Although elected leaders believe that the system's recent responses have been satisfactory, they are concerned about the future. Policy makers in Michigan are satisfied with the performance of higher education, although they concede that the system is inefficient and there is too much program duplication. Their biggest concern is affordability as institutions continue to increase tuition.

Responding to Contextual Change

The Illinois system has responded effectively to such changes as the need for greater productivity in higher education through its Priorities, Quality, and Productivity (PQP) Project which is regarded as a national model. In Texas, program expansion, capital improvements and subsystem realignments in the predominantly Hispanic southwestern region, following an unsuccessful lawsuit that sought improved services, demonstrate efforts to respond to contextual change. In Georgia, a strategic planning process addresses contextual changes such as a growing student population and a potential tightening of state resources. The effectiveness of the process depends upon a supportive Governor, a strong chancellor and a good budget. Because key decisions in Florida are controlled by the Legislature, the overall system has adapted to changes in the economy and population while remaining attentive to concerns about access and affordability. There is presently no statewide plan for dealing with impending enrollment increases, though a number of legislative strategies, such as the credit-hour limitation and the new campus initiative-are intended to address this problem. The state system in New York is too fragmented and complex to deliver any unified response, especially in the absence of consensus about direction among elected leaders. In California as well, each of the public subsystems has its own approach to identifying and responding to contextual change. Each is internally driven, with the focus on the health or needs of its own institutions. In Michigan, responses are also determined individually by each institution; the most common responses to contextual changes have been raising tuition and starting new programs where there is a perceived need.

Balancing System and Institutional Interests

The Illinois Board of Higher Education balances institutional and system interests as well as enforces peace between the private and public sectors. When legislators believe the board has been too heavy-handed in promoting system interests, they intervene to preserve institutional independence. For example, the Legislature altered board-adopted admission standards and limited board options in rewarding institutions for their responsiveness to the PQP Project. The break-up of the system of subsystems was also a legislative response to a perceived lack of balance between governing board and institutional interests, and was meant to shift more leverage back to the institutions. In Texas, Coordinating Board members are strong advocates of the public purposes of higher education, and serve as a countervailing force to some of higher education's parochial interests. The Legislature attempts to ensure that institutional interests are not overlooked. In Georgia, systemwide priorities are balanced with those of institutions when there is a strong leader holding the chancellor position. Under weak leadership, institutional interests tend to prevail and there is mission creep. Florida has used a strong regulatory environment to ensure the dominance of public interests. Also, Florida's elected leaders have shown little deference to professional values. In New York, the capacity to balance subsystem and institutional interests depends upon leadership. In SUNY, the only subsystem focus at the time of our study was on articulation. In contrast, a unified board and strong chancellor in CUNY imposed such subsystem priorities as collaboration, productivity, and efficiency. Professional interests for CUNY were reflected in the actions of the Faculty Senate and in lawsuits filed by faculty unions. In California, system and institutional priorities do not conflict because each subsystem is not designed to identify priorities beyond those set forth in the Master Plan. Within the subsystems, the balance attained between institutional and subsystem interests depends upon the quality of leadership in those subsystems, as is the case in New York and Georgia. The California Postsecondary Education Commission (CPEC) serves as a neutral meeting ground for issues the subsystems are willing to discuss. Since there is no statewide planning and no one to set statewide priorities in Michigan, the actions of individual institutions are assumed to reflect the public interest.

Cost, Access, Equity, Affordability, and Retention

Comparative measures of system performance were derived by Kent Halstead and are reported in Table 3. (Also see Appendix B for a description of Halstead's quantitative measures.) Florida and California have the lowest cost systems in terms of operating costs per FTE student. Both require a majority of all first-time freshmen to matriculate in low-cost community colleges. While larger states should in theory achieve economies of scale, Georgia, New York and Michigan all exceed the national average for operating costs. There are few discernible relationships between costs and performance. The highest cost state, Michigan, ties for third on access, ranks last in equity, last in affordability, and fourth on retention. While the lowest cost state, Florida, ranks last in access and retention, it is first in equity and third in affordability. The strongest relationship is between affordability and the capacity for balancing system and institutional interests; affordability seems to fare best in those states where some agency (coordinating boards in Illinois and Texas, a governing board in Georgia, and the Legislature in Florida) is given the task of, or takes explicit responsibility for, representing the public interest in decisions that affect institutions. A similar purpose is served in California by the 1960 Master Plan, whose emphasis on access helps to explain California's top ranking on affordability. In California, however, the affordability of four-year institutions, especially UC, has been seriously eroded by rapidly increasing tuition which has outstripped available financial aid. Although Georgia ranks poorly on the adequacy of need-based aid, this measure is somewhat misleading for this state because of Georgia's extensive HOPE scholarship program, which is based on high school and college performance rather than need.

Table 3
Performance Measures for the Study States and the U.S. Average
IL
TX
GA
FL
NY
CA
MI
U.S.
Cost Per Public Student*
(1995-96)
State Appropriations plus Tuition per FTE
$6,524
$6,540
$7,312
$5,386
$7,528
$5,876
$9,057
$7,020
State Appropriations per FTE
$5,223
$4,783
$5,577
$4,121
$5,068
$4,798
$5,163
$4,801
Access**
(Fall 1994)
63.9
50.4
57.6
48.4
70.2
60.6
60.6
57.3
Equity§
(1994-95)
94
95
100
108
104
97
93
100
Affordability*** (1994-95)
% Family Share of Total Funding
19.9
26.9
23.7
23.5
32.7
18.4
43.0
31.6
Median Income/
Two-Year Tuition
109
167
115
97
55
358
91
100
Adequacy of Need-Based Aid
1.04
0.09
0.05
0.20
1.55
0.31
0.37
0.50
Retention**** (1994-95)
131
83
124
67
103
116
110
100
* The cost per student is the total of state appropriations plus tuition divided by the FTE in the public sector. Under this heading we also report state appropriations to the public sector divided by FTE, in order to provide a measure of state support through direct funding to institutions.

*** Access is the proportion of high school graduates starting college anywhere.

§Equity (termed equitable opportunity by Halstead) is an index of the degree to which minority students graduate from high school, enter state colleges, and graduate relative to the retention of white students as a state standard.

** Affordability is the family share of total funding. Under this category we also show the relationship between median income and two-year college tuition, and the ratio of available need-based aid to the amount required for a needy youth to enroll at an in-state public four-year college.

**** Retention is the ratio of the starting rate for high school graduates to the retention rate for first-time freshmen indexed to the national average.

Sources: K. Halstead, State Profiles: Financing Public Higher Education 1978 to 1996: Trend Data(Washington, D.C.: Research Associates of Washington, 1996); and K. Halstead, Higher Education Report Card 1995(Washington, D.C.: Research Associates of Washington, 1996).

 

Choice

Illinois provides a very wide choice of higher education options through a variety of four-year institutions that have differing programs, environments, clientele and admissions standards. A comprehensive array of well funded and well regarded community colleges, a strong and well integrated private sector, and an extensive program of need-based aid supplement public baccalaureate options. Information about institutional performance is available to the public, and competition between the public and private sectors is closely monitored. Texans do not speak much about the choices their system provides. Higher than average numbers of students attend public institutions with relatively few going out-of-state or attending private institutions, despite the existence of need-based tuition equalization grants. In Georgia, the HOPE scholarships act as a mechanism for public choice that allows students to attend a wider range of institutions than would otherwise be possible. HOPE also increases the award for students choosing private institutions, but it does not cover full tuition as it does in the public sector. In Florida a very large proportion of students in higher education begin college in a public institution, and more than 80 percent are required to attend community colleges. A student aid policy that supports choice produces below average outcomes. New York provides a full range of choices through the 1960s' expansion of the public sector, a strong independent sector, and extensive student aid. In California, only the top 12.5 percent of high school graduates may attend the UC and the top one-third the CSU. Those who succeed in community colleges are guaranteed a place in some baccalaureate program. Rapidly increasing tuition at UC (and to a lesser extent at CSU), weak transfer programs in some community colleges, and faculty resistance to curriculum changes threaten to limit the range of choices, especially to poor and minority students. Michigan provides many options in the public and private sectors although high tuition may narrow the effective range of choice for many students. The state has a tuition equalization plan that helps needy students attending private institutions.

Leadership

Illinois seemed blessed with strong leadership at all levels, with the possible exception of the two governing boards that were terminated during the study. Both elected and appointed leaders were described in positive terms by virtually every respondent. Presidents seemed capable and responsive. System leadership in Texas is also strong and highly regarded, although the environment for institutional leadership varies by subsystem. A number of presidents report to institutional governing boards. Presidents in the Texas State University subsystem report directly to the governing board and do most of their own lobbying. Even in the University of Texas and Texas A & M subsystems, priorities are set at the subsystem level, but implementation is left to the campuses. Only the University of Houston subsystem has recently experienced a major shake-up involving subsystem and institutional leadership. The current chancellor in Georgia is strong; the one he replaced was generally seen as weak. Institutional presidents in Georgia are a step or two removed from the political process. They serve as the chancellor's policy advisors. While some presidents would prefer to be able to act in more entrepreneurial ways and to have more freedom, the system is specifically designed to balance such aspirations against the governing board's perceptions of what is best for the system. Most presidents seem satisfied with this arrangement.

Strong legislative leadership over Florida higher education results in state and subsystem leaders that have extensive political as well as educational experience. Legislative and subsystem leadership in Florida overshadow campus leadership, but this did not seem to be a source of concern for those we interviewed. In the State University of New York, recent direct confrontations between chancellors and the Governor have contributed to rapid turnover. Institutional presidents, however, are selected by local boards and the SUNY office does not interfere with the selection process very much. The CUNY chancellor has fared better in terms of longevity, perhaps because she is better buffered from direct actions by the Governor. While CUNY presidents are appointed by the subsystem governing board, there is a long tradition of substantial institutional independence, somewhat eroded under current leadership. The recent record of UC leadership has been marred by actions that have shaken public confidence. Leaders in the UC subsystem come most commonly from within and reflect the values of faculty who play a key role in their selection. The much more bureaucratic CSU has regularly attracted strong and visible leaders. The current chancellor has been able to attract strong institutional leaders by reducing bureaucratic constraints and enhancing their role in subsystem-wide decisions. During this study, there was a great deal of turnover in community college leadership, both at the state and institutional levels. Michigan has attracted strong institutional leaders as a matter of necessity. Presidents must be strong if their institutions are to flourish because they lack the system and subsystem buffers found in other states.

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