TRAVERSE CITY- Michigan Legislators could see new recommendations on the higher education budgets when Gov. Jennifer Granholm returns from the National Governor’s Association Annual Meeting this week.

Consultants speaking to governors urged them to use funding to provide incentives for universities to help meet state economic development goals and said none of the states are effectively doing that.

States have been asking their colleges and universities to become bigger players in improving state economies, but they have maintained funding formulas that encourage the status quo, consultants told governors Sunday.

For higher education institutions to be encouraged to change course, states have to structure the funding to incent those changes. They have to know exactly what it is they want and need from universities, the governors were told.

States need to determine exactly what they need from universities and colleges, said Aims McGuinness, senior associate with the National Center for Higher Education Management Systems.

“We’ve found it very difficult to change the conversation to looking a the future of the state as opposed to being one about building great higher education institutions,” Mr. McGuinness said at a special session for the meeting. “The goal is not to develop higher education institutions in the abstract.”

Patrick Callan, president of the National Center for Public Policy and Higher Education, noted that the United States has among the best universities in the world, but is facing declining levels of education among its population.

“The younger you get in America, the less competitive we look if post secondary education is one of the factors of competition,” Callan said.

“I really appreciate having the data confirm what we are doing in Michigan,” said Gov. Jennifer Granholm, “which is using the higher education system to drive change.”

Granholm said the recent changes in high school graduation standards as well as regional skills alliances to help with retraining displaced workers are preparing new students for higher education and are getting those institutions involved in improving the economy.

But she acknowledged that state budgets currently are not driving colleges or universities themselves to make any changes that would increase the numbers of college graduates or that would ensure those graduates are in programs that would boost the economy.

Because neither chamber has yet passed a higher education budget for fiscal year 2007-08, Granholm said there was still time to look at what other incentives might be worked into that spending plan.

One area that could be addressed, at a minimum, is teacher-training programs. Superintendent of Public Instruction Mike Flanagan, also attending the meeting, told Gongwer News Service that his department is already trying to drive some programs through its authority to certify teacher education programs.

But he said the state could also use some funding to drive direction of programs or assistance with job placement. For instance, he suggested a program that would provide full state funding for students who remain in the state after they graduate, but require the universities to repay some funds allocated for students who leave the state for their first job.

The two consultants said the states should reflect their economic and workforce needs in how they fund the schools. Current funding programs are generally aimed at maintaining the institutions, not at encouraging them to attain particular state goals.

“Finance policy is the number one problem,” McGuinness said. “But states, bar none, begin with governance policy. If your underlying funding system is screwed up, you’re not going to get any change.”

The consultants noted, for instance, that states have been calling on universities to cut costs, but by and large have not controlled tuition increases.

The state’s goals for higher education also have to be relatively simple to gain public acceptance and understanding. “Most people don’t have a clue what higher education is,” McGuinness said. “So you’ve got to get this down to a message you can get out of your mouth in three or four sentences.”

That university finance policy also has to come with some guarantees of funding, McGuinness said. University funding should be protected from expected budget downfalls, he said, noting that it is often the incentive funding that is the first thing cut during such downfalls.

But university funding policies also need to include some controls on tuition increases. “Tuition ought to be policy driven,” Callan said. “If tuition is going up faster than family income, you’re making higher education less affordable.”

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com

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