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The University of Colorado and the State

The Chronicle has an interesting story about The University of Colorado System's President, Elizabeth Hoffman. The story focuses on her handling of the sex scandal associated with the Buffalo football program, of course. In an odd twist of fate, responsibility for athletics had been removed from the President's office prior to her arrival in 2000. The move is traced to the stormy relations between her predecessor Judith Albino and the Board of Regents. But the public scandal has thrown responsiblity for managing the issue back into the President's court, where it surely belongs. But what I found most interesting was this passage:

During the past couple of years Ms. Hoffman has been pushing for even more autonomy. She wants the state's General Assembly to grant the university "enterprise status," which would make it a semiprivate institution with more independence over financial matters such as raising money and setting tuition rates.

Even in the midst of the athletics scandal, she has continued to lobby for passage of a measure that would create a voucher system for students at the state's public and private colleges, bringing out pages of charts and graphs on the university's budget over lunches and dinners with state legislators. If the bill passes this spring, Ms. Hoffman says, the university's "enterprise status" is a done deal.

The new status is essential for the university's financial future, she says. The university system now receives only about 10 percent of its funding from the state. After three years of significant cuts in money from the state, she says, the university needs more autonomy to manage its finances in order to maintain quality.

This issue is not unique to Colorado. The University of Virginia is a well known example where state funding has become a small percentage of operating expenditure. Clemson has the same problem. The issue is not just "managing finances," but having the freedom to make autonomous decisions on numerous margins which affect the university. Given the dry well in public funding, schools want to be released from regulatory constraints on what they do. Increasingly, good state universities are obtaining a more private character. Schools that do not move in this direction will surely suffer in the national competition for quality students and faculty.

The Chronicle piece is very interesting in all its dimensions, and is worth reading. By the way, President Hoffman was well known among economists before entering the realm of university administration. Good luck to her as she navagates these treacherous waters.