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National CrossTalk Fall 1999
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Kentucky’s Grand Agenda
Can the state’s ambitious postsecondary education reforms continue to move forward?

By William Trombley
Senior Editor


AFTER THREE YEARS of intensive effort and heavy spending, Kentucky’s ambitious post-secondary education reforms are starting to take hold but their ultimate fate remains in doubt.

Determined to lead the state away from an outdated economy, based on agriculture and coal mining, to a new role in the “information age,” Governor Paul E. Patton, with bipartisan legislative support, has accomplished the following:
  Kentucky Governor Paul Patton has made higher education reform his highest priority since taking office in December of 1995.

  • Spending on higher education has been increased by 48 percent in the last four years.
  • A “Bucks for Brains” incentive fund has been established which has enabled the University of Kentucky and the University of Louisville to attract top scholars, endow dozens of new faculty chairs and provide more lucrative fellowships for graduate students.
  • All but one of the state’s 14 community colleges have been removed from the University of Kentucky’s control and have been placed with 15 technical schools in a new and apparently more effective Kentucky Community and Technical Colleges System.
  • The state coordinating agency—the Council on Postsecondary Education— has been strengthened and has made progress toward providing coherent statewide planning.

But many of the problems that prompted the Kentucky reforms persist. The percentage of the population with high school diplomas, and the percentage who earn bachelor’s degrees are among the lowest in the nation. Many of those who enter a college, a university or a technical school drop out. One of the consequences is that Kentucky per capita income is only 81 percent of the national average.

“We’ve had some successes but we haven’t touched the ‘quality of life’ issues yet,” said Gordon K. Davies, president of the Council on Postsecondary Education and the person charged with implementing the reform program. “The question to ask is not, ‘Is the crop good?’ but ‘Are there signs of spring?’ and I think the answer to that one is ‘yes.’”

Governor Patton, a Democrat now serving his second term, is convinced that raising the educational level of Kentucky’s citizens is the only way to move the state away from a stagnant economy, based on tobacco, coal mining, bourbon and horse racing, to a more prosperous future created by medical and pharmaceutical research and other high tech industries.

To do that, he is attempting to reduce the state’s staggeringly high illiteracy rate— perhaps one in every four adults—as well as continuing the reforms in elementary and secondary education that were started ten years ago and, now, pushing for change in postsecondary education.

“There has been a turn-around in aspirations,” said Aims C. McGuinness of the National Center for Higher Education Management Systems, who was Patton’s principal advisor on the reform program.

Some of the goals might be unrealistic. For example, undergraduate enrollments are supposed to grow by 80,000—to a total of 240,000—by the year 2020, in order to reach the national average. This will be difficult to achieve in a state of four million people, with population expected to increase only about ten percent in the next decade.

The University of Kentucky, now ranked 42nd among the nation’s public universities in National Science Foundation research funding, is supposed to climb into the top 20 by the same year, 2020. Many doubt this can be achieved.

“I consider that to be a metaphor,” said Daniel Reedy, professor of Spanish at the University of Kentucky and one of two faculty representatives on the university’s Board of Trustees. “Anybody who understands higher education knows we’re not going to be in the top 20 in everything, but it sets a goal and I think we can get there in a number of areas.”

Including funds appropriated for the 2000–2002 biennium, about $600 million in new money has been pumped into post-secondary education since Patton took office in December 1995. Spending on education beyond high school will reach 15.8 percent of General Fund revenue by 2002, a higher percentage than in most states.

Some of the new funding has come in the form of “incentive trust funds” money available to local campuses only if they raise matching amounts.

The largest of these is called “Bucks for Brains,” a program that allocated $66.7 million to the University of Kentucky and $33.3 million to the University of Louisville for the 1998–2000 biennium, to improve their academic stature. Both schools matched the state appropriations, so another $100 million (again, two-thirds for Kentucky, one-third for Louisville) has been included in the 2000–2002 budget.

Another $20 million in “Bucks for Brains” money will go to the state’s six regional universities—Eastern Kentucky, Kentucky State, Morehead State, Murray State, Northern Kentucky and Western Kentucky—in the next two years.

Other incentive trust funds seek to increase enrollment, improve graduation and retention rates, and provide additional student financial aid, among other goals.

"We've had some successes" but much remains to be done, says Gordon Davies, president of the Council on Postsecondary Education, of Kentucky's higher education reform efforts.  

Gordon Davies considers the incentive funds vital to the Kentucky reform effort. “They don’t amount to an enormous amount but they provide money on the margin for change,” he said. “They give us (the council) some leverage.”

J. Kenneth Walker, the council’s former vice president for finance, described the incentive funds as “the rudder by which the ship can be turned.”

But some regional university presidents object to the prescriptive nature of the incentive funds.

“They sound great on paper, or in some journal article, but in practice they reduce the flexibility of the campus president,” said Robert E. Kustra, president of Eastern Kentucky University.

“Categorical funds are fine but you have to jump through hoops to get them,” said Ron Eaglin, president of Morehead State. “Our biggest need is for operating dollars, and these funds don’t help us there.”

However, no objections to “Bucks for Brains” have been heard from administrators at the University of Kentucky and the University of Louisville.

The program has enabled the University of Kentucky to increase endowed chairs from 21 to 66 and to attract prominent scholars such as Enrico Santi, in Spanish; Joseph Peek in finance; Gail Robinson in vocal music; Ted Hosselbring in special education; and Henry Dietz in engineering.

The additional money also has made it possible to offer “outstanding fellowships for graduate students,” said Professor Reedy of the Spanish department. “This year, for the first time, we got five of our top six choices.”

Kentucky has adopted the slogan, “America’s Next Great University,” plastering it all over university publications and, in the process, offending many graduates who attended Kentucky before it became “great.”

Lloyd Axelrod, director of public relations, says the slogan is part of a new marketing campaign.

“I came here from a ‘Fortune 500’ company two years ago and I couldn’t believe the university had never done anything to market itself,” Alexander said. “Everybody knew we had a great basketball team but that’s all they knew about the university.”

But slogans and high hopes might not be enough to boost the University of Kentucky, whose reputation in most research fields is modest, into the ranks of the nation’s top 20 research universities by the announced target year of 2020.

Conflict of Interests? Some questionable connections for Kentucky legislators  
THE TERM “conflict of interest” does not seem to have currency in the Kentucky Legislature. Several legislators, including some who have considerable influence over education spending, are on the payrolls of state universities. They include:
  • Representative Robert “Bucky” Buckingham (Democrat), who is director of regional development in the Center for Continuing Education at Murray State University.
  • Representative Jesse Crenshaw (Democrat), associate professor of social work and criminal justice at Kentucky State University.
  • Representative Jon Draud (Republican), director of the Office of University/School Partnerships at Northern Kentucky University.
  • Representative Harry Moberly, Jr., (Democrat), who is director of student judicial affairs at Eastern Kentucky University and also chairman of the House of Representatives Appropriations and Revenue Committee.
  • Senator Joey Pendleton (Democrat), Farm Operations Manager for Murray State University.
  • Representative John Will Stacy (Democrat), who is assistant dean for development at Morehead State University and also chairs the Budget Review Subcommittee on education.
—William Trombley

However, UK President Charles K. Wethington is optimistic. “If policymakers will keep their commitment, the University of Kentucky will do its part,” he said in an interview. “We’ve moved up rather rapidly in recent years.”

Said Fitzgerald Bramwell, vice president for research and graduate studies, “If this level of support continues, we can reach the bottom rung of the top 20 by 2020, perhaps even by 2010.”

But Davies said the university’s recent record looks better only because officials have been including some non-federal funds—state money and student tuition and fee income—in their federal research totals. He criticized the university’s “scattered approach” to research funding and said, “They need to do a much better job of targeting their resources.”

Such targeting has enabled the University of Louisville to make rapid strides toward its state-mandated goal of becoming a “premier, nationally recognized metropolitan research university.”

Louisville has added 34 new endowed chairs with its “Bucks for Brains” money, concentrating on a few areas, including early childhood education, entrepreneurship and medical research.

  Kentucky's "Buck for Brains" spending enabled the University of Louisville to hire prominent bone marrow transplant researcher Suzanne Ildstad.

The university lured Suzanne Ildstad, a surgeon noted for bone marrow transplant research, and her 40-member team, from Allegheny University of the Health Sciences, two years ago.

Other top scholars hired with “Bucks for Brains” money include cancer researcher Donald M. Miller; David Gozal, a professor of pediatrics; and early childhood experts Victoria and Dennis Molfese.

“We’re not trying to be all things to all people,” said Nancy Martin, vice president for research. “The sky is not the limit for the University of Louisville, but I think we can move into the 80s or 90s on the NSF (National Science Foundation) funding list.”

As large sums are poured into business, engineering and the sciences, complaints are being heard that both Kentucky and Louisville have abandoned the liberal arts.

In a letter to the Louisville Courier-Journal last spring, a critic took University of Louisville President John Shumaker to task for allowing the campus to become “a giant trade school, turning out carefully crafted, corporately approved human widgets, with no appreciation of music, art, history or literature. A sad day indeed.”

“It’s been wonderful to have a governor who shows a real interest in higher education, and it’s been great to have that kind of support,” said Professor George Herring, who has taught history at the University of Kentucky for 31 years. “But you have to combine something like ‘Bucks for Brains’ with an equivalent effort to retain the good people you already have.”

Kentucky by the Numbers  
Fall 1999 undergraduate enrollment (headcount)
  • Doctoral institutions (University of Kentucky, University of Louisville): 31,500
  • Regional universities (Eastern Kentucky, Kentucky State, Morehead State, Murray State, Northern Kentucky and Western Kentucky): 53,100
  • Community and technical colleges: 52,800
  • Independent institutions: 24,100
  • Total: 161,500
Full-time state-supported faculty and staff (fall, 1999)
  • Faculty: 7348
  • Staff: 18,106
In-state undergraduate tuition (per semester)
  • University of Louisville: $1575
  • University of Kentucky: $1555
  • regional universities: $1040 to $1075
  • Lexington Community College: $810
  • other community colleges: $575
  • technical schools: $380
State spending on postsecondary education
  • $1.6 billion 2001–2002 academic year
Percentage of population with high school diplomas
  • 77.9 percent (44th in the nation)
Percentage of 18- to 24-year-olds enrolled in college
  • 30.8 percent (national average 33.7 percent)
Percentage of first-time freshmen who receive bachelor’s degrees within five years
  • 36.7 percent (national average: 52 percent)
Per-capita income (1998)
  • $21,551 (national average: $26,482)

Herring said the Kentucky history department “has lost three good people in the last two years and may lose more” because faculty salaries are substantially higher at nearby public “flagship” institutions like the University of North Carolina, Chapel Hill, and the University of Virginia. Average annual pay for a full professor at the University of Kentucky is $74,000, while it is $93,000 at Chapel Hill and $101,000 at the University of Virginia.

The postsecondary reform legislation called on each of the six regional universities to develop “at least one nationally recognized program of distinction” and one “nationally recognized applied research program.”

For example, Western Kentucky University, which received $2.4 million in “Bucks for Brains” money in 1998–2000 and is earmarked for up to $4.6 million in 2000–2002, will concentrate on beefing up an already-strong journalism and communications program and on building strength in areas of applied science such as coal chemistry.

If Kentucky is to realize its ambitious enrollment plans—an increase of 10,000 undergraduates in the next two years, 80,000 by the year 2020—much of the growth will have to be in the state’s 29 two-year community and technical colleges.

After a bitter fight during a special legislative session in 1997, all but one of the 14 community colleges were wrenched from the control of the University of Kentucky and were joined with 15 technical colleges in a new Kentucky Community and Technical College System (KCTCS). Only Lexington Community College, in the university’s home town, remains under UK administrative supervision.

President Wethington was determined to hold on to the community colleges, which gave the university political clout throughout the state. Governor Patton was just as determined to break the university’s hold over the two-year schools. The two sides lobbied legislators intensively and used newspaper, radio and TV ads to press their cases with the public. When the University of Kentucky basketball team played in the national championships in Indianapolis in March 1997, students handed out lapel buttons that read, “Keep us No. 1. UK and our community colleges.”

“It was a major, major battle,” said Ron Geoghegan, a lobbyist for Bell South of Kentucky and former chairman of Kentucky Advocates for Higher Education, a group that lobbies for more money for the state’s colleges and universities. “If the governor had lost that fight, he probably would have lost the whole reform package.”

But the Legislature approved the reforms, including consolidation of all the two-year schools into the KCTCS, with 28 member institutions, credit enrollment of 46,000, non-credit enrollment of more than 150,000 and an annual budget of more than $380 million.

Patton still savors the victory. “We think we’re getting the University of Kentucky away from being the biggest empire in the state, to being the biggest contributor to the state,” the governor said in an interview.

IWethington, the loser, will leave the University of Kentucky presidency next year.

Michael B. McCall is president of the newly formed Kentucky Community and Technical College System.  

It is one thing to create a new structure for the community and technical schools, and quite another to make it work. That job fell to Michael B. McCall, who was executive director of the South Carolina technical college system before becoming KCTCS president in January 1999.

One of McCall’s goals is to improve cooperation between the community and technical colleges—in some cases, one school will not accept the other’s credits, even if they are in the same town.

Gordon Davies thinks McCall is succeeding. “Nobody is going to be able to take that system apart now,” he said. “We’re driving toward a system in which the distinction between community colleges and technical colleges will disappear.”

McCall also hopes to provide “faster and better service to business and industry” by training young people for the Kentucky workforce and also by upgrading the skills of those who already have jobs.

He pointed to a joint effort by KCTCS and the University of Louisville to train workers for United Parcel Service, which McCall said was a factor in a UPS decision to keep its regional headquarters in Louisville.

Perhaps the most difficult of the Kentucky reforms has been to establish the Council on Postsecondary Education as a credible state planning agency.

In the past, higher education policy often emerged from a series of turf battles between powerful campus presidents, with little thought given to what was best for the state as a whole. There was a coordinating agency but its recommendations were routinely ignored by campus officials, who went directly to favorite legislators with their requests.

“There was no system, just a collection of feudal baronies,” said Walter Baker, a former state senator who is now a member of the Council on Postsecondary Education.

Governor Patton made several strong appointments to the council, and the council then selected Davies as its first president. Davies had been director of the State Council of Higher Education of Virginia for 20 years before he was fired in 1997 by council appointees of George Allen, a conservative Republican who was then Virginia’s governor.

“I considered his dismissal in Virginia to be a positive,” said Leonard Hardin, former chairman of the board of the First National Bank of Louisville. Hardin was chairman of the Kentucky Council on Postsecondary Education when Davies was selected. “We needed a hardnosed, tough guy who would not be buffaloed by anyone, and we got one,” he said.

To enhance the prestige of the council presidency, the reform legislation says the job should pay more than any of the state’s university presidents earn. Davies’ current annual salary of $274,000 is higher than that of University of Kentucky President Charles Wethington, although a presidential house and other perquisites probably provide Wethington with a larger total compensation package.

Before agreeing to take the job, Davies insisted on meeting the governor and came away convinced that Patton was committed to spending the money needed to make sharp improvements in the state’s colleges and universities. “For this governor, higher education was the starting point for the budget, not something you fill in later,” he said.

Davies has used the incentive trust funds to bring about change and also has introduced “benchmark budgeting,” an approach that bases each university’s budget on comparisons with similar schools across the country and with a few better financed campuses outside the state.

For instance, Kentucky State, the only historically black institution in Kentucky, is compared not only with similar universities like Morgan State, in Maryland, and South Carolina State but also with racially diverse schools such as Northern Michigan University and California State University, Bakersfield.

“Benchmarking” has been controversial.

In its budget recommendations to the governor for the 2000–2002 biennium, the council proposed that campuses which had been funded inadequately in the past in particular, Northern Kentucky and Western Kentucky universities—should get larger increases than the other six regional campuses.

  Eastern Kentucky University President Robert E. Kustra, shown with the campus behind him, thinks Eastern Kentucky has been short-changed in the state budget process.

This brought howls of protest from other campus presidents, especially President Kustra of Eastern Kentucky University. At a state Senate hearing last February, and in subsequent public remarks, Kustra accused Davies and the council of playing favorites.

“I have some skeptics on my staff who think the council was using the budget to restore the balance of power because they think Eastern Kentucky has too much political clout,” Kustra said in an interview.

One of these skeptics (and the major source of political clout) is Harry Moberly, who is director of student judicial affairs at Eastern Kentucky and, more importantly, chairman of the House of Representatives budget committee.

“That flawed formula cost Eastern a lot of money,” Moberly told the campus newspaper last spring. “That’s just the result of incompetence and favoritism in the Council on Postsecondary Education.”

In an interview with National CrossTalk, Moberly said, “Gordon Davies plays favorites with the institutions, depending on his personal relations with the presidents of the various universities.”

Moberly claims the council budget provided Eastern Kentucky with $1,000 less per full-time-equivalent student than Western Kentucky. He predicted that the “current benchmarking system won’t survive—too many legislators are unhappy with it.”

However, council officials say Eastern Kentucky has received annual budget increases averaging 10.9 percent over the last 12 years, more than any other campus.

Davies said he is not “playing favorites” with campuses but is trying “to move from a ‘keep everybody happy’ approach to making the most of our opportunities.” He added, “My job is not to make them all equally happy—my job is to invest the state’s money wisely, and that’s what we are doing.”

As for benchmark budgeting, “it’s not gone if I have anything to do with it,” Davies said.

However, an aide to Governor Patton said “there are likely to be some adjustments” in the benchmarking process.

Kustra and the presidents of Morehead State and Murray State tried an end run around the Council on Postsecondary Education, appealing to the Legislature to increase their appropriations. They did receive small increases but for the most part Governor Patton’s budget proposals, based on the council’s recommendations, were upheld by a bipartisan legislative coalition.

This was especially noteworthy in a year of harsh partisanship. The House of Representatives was controlled by Democrats, the state Senate by Republicans—the first time in Kentucky history that the Republican Party has controlled either house—and the two sides quarreled over almost every issue.

Another obstacle the governor’s higher education budget had to overcome was the fact that at least half a dozen legislators work for public universities (see sidebar) and are not shy about promoting their campuses in the state capitol. Several, like Harry Moberly, are in key positions.

“We’ve gotten into a very bad situation here in Kentucky,” said council member Walter Baker. “The schools go out and hire their own legislators.”

“I think it is a negative for a legislator to be voting for the higher education budget and holding a position at one of the institutions at the same time,” said Richard Belisles, state chair of Common Cause of Kentucky. “But our state seems to be going that way.”

Moberly defended the practice. “I take a paid leave when the Legislature is in session (60 days, every other year),” he said. “We have a citizen legislature in Kentucky. Everybody has another job, so in that sense you could say all of us have a conflict of interest.”

Moberly and others made several attempts to alter the budget but largely failed. The Legislature “recognized the role of the council and the existence of a (higher education) system, and I’m very pleased about that,” said Charles Whitehead, a northern Kentucky business executive who is chairman of the Council on Postsecondary Education.

The budget victory is seen by many as an important step toward creating a higher education system in Kentucky, reducing the power of the individual campuses and their legislative allies, and putting a stop to the endless turf battles. But the war is not over.

“Kentucky is a state of fierce regional loyalties, and the regional universities are a major part of that feeling of loyalty,” said Dick Wilson, former capital bureau chief for the Louisville Courier-Journal.

As the council moves on to other issues— increasing enrollment; improving retention and graduation rates; eliminating academic programs that graduate few students; nurturing the state’s new “virtual university”; and tackling the problem of adult illiteracy—bad feeling from the budget fight might hinder progress.

Davies and the council appear to have the support of four presidents John Shumaker of the University of Louisville, James Votruba of Northern Kentucky; Gary Ransdell of Western Kentucky and Mike McCall of the Kentucky Community and Technical College System. But three others—Kustra of Eastern Kentucky, Ron Eaglin of Morehead State and Kern Alexander of Murray State—are openly opposed, and University of Kentucky President Wethington reportedly refers privately to Davies and the council as the “evil empire.”

Can the Kentucky reforms move forward in the face of such divisions? How long will Davies, now 62, be willing to remain as president of the Council on Postsecondary Education, a position in which he acknowledges he has become a “lightning rod for criticism?” How long can Kentucky afford to spend such a large share of its revenues on postsecondary education? And will the Patton reforms survive the governor’s departure from office in December 2003?

“The reforms will get sidetracked somewhere along the way. It’s bound to happen,” the Courier-Journal’s Dick Wilson said. “But things will never be the same as they were before Patton came in. In 20 years this is going to be a better system of higher education than we ever could have expected.”

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