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Mega-Merger in Minnesota
Anticipated gains in savings and efficiency prove to be elusive



By William Trombley
Senior Editor

Key House Democrat Lyndon Carlson resisted the merger
ST. PAUL, MINNESOTA
SIX YEARS AFTER the State of Minnesota merged all of its public universities and two-yearcolleges (except for the University of Minnesota) into a single system, there appear to have been more losses than gains.

÷Until recently, the Board of Trustees of the new Minnesota State Colleges and Universities system (MnSCU÷ called "minn-skew" by its friends and "miscue" by its detractors) has been badly divided by both substantive disagreements and personality conflicts.

÷In six years the system has worked its way through one chancellor, two interim chancellors and an "acting interim" chancellor. The lone regular chancellor, Judith Eaton, resigned last April after 22 turbulent months, and the system now is run by the governorâs former chief of staff.

÷Few of the hoped-for benefits of merger, including smoother transfer policies, elimination of course and program duplication and cost savings, have been realized.

÷Many who opposed the merger, including key legislators and some campus presidents, are still hoping it can be undone and are dragging their feet on implementation measures.

÷Morale is low in the central office in St. Paul, where 50 percent of the jobs were eliminated by former Chancellor Eaton.

÷This is a mega-merger that would have been difficult under the best conditions," said Joe Graba, who has been close to Minnesota public higher education for more than 30 years and now is acting dean of the Hamline University Graduate School. "It has been made worse by a weak and divided governing board and by weak leadership in the chancellorâs office."

Senate Majority Leader Roger Moe insisted on the merger
"It has turned out to be an absolute disaster," said Roland Dille, who was president of Moorhead State University for 26 years before retiring in 1994. "I happen to believe that central governing bodies can be effective, but they canât govern 50-plus campuses."

Even the former chairman of the Board of Trustees, Duluth geologist William Ulland, said "the system is just too big·it has become very difficult for the board to get a feel for individual institutions."

The merger was essentially the work of a single man÷Roger Moe, who has been majority leader of the state Senate for a remarkable 17 years.

Moe had become convinced that Minnesota higher education was too costly and too inefficient and that it was not preparing the state for the economic demands of the 21st century. Although the state had a higher education coordinating board, the board had done little, the majority leader thought, to halt the proliferation of courses and programs, to encourage campus specialization and to make it easier for students to transfer from one system to another, among other shortcomings.

The board included "many good, skilled people who were out front on a lot of things," Moe said during an interview in his State Capitol office, "but I never sensed that they really wanted to take some of the tough medicine."

Moe thought combining the stateâs seven state universities, 34 two-year technical colleges and 21 community colleges into a single system would save money and might also allow higher education to play a larger role in Minnesotaâs economic development plans.

Moe muscled merger legislation through the 1991 legislative session, despite strong opposition from key members of the House of Representatives and from administrators, faculty unions and student organizations in the three systems that were to be joined.

"I have never seen him spend so much political capital as he did on this," said a Capitol observer who has watched the Senate majority leader for most of his 27 years in the Legislature.

On the last night of the session, after the lower house had voted overwhelmingly against merger, Moe threatened to hold key House bills in the Senate and to force a special legislative session if the plan was not approved. As the midnight adjournment deadline approached, the House reluctantly voted for merger and MnSCU came into being.

Some people believe Moe pressed the issue so relentlessly because his political mentor, former Senate Majority Leader Nicholas Coleman had tried, and failed, to merge all four of Minnesotaâs higher education systems (including the University of Minnesota) in the 1970s.

"Coleman said reorganizing higher education is a lot like rearranging a cemetery," Moe recalled. "You donât get a lot of internal support."

Whatever the motivation, Minnesota created, almost overnight, one of the largest higher education systems in the land÷145,000 students on 53 two- and four-year campuses.

"It was a system born in politics, with lingering animosities that have undermined their ability to work together and to let the system function," said a lobbyist who watched the action closely.

Moe acknowledged that the forced marriage of the three segments left hard feelings.

"It was one of those things that when you think you have to do something, you do it, and I forced it," he said. "That really upset the House of Representatives and I respect that, I understand that. So what they did was spend the next three years trying to undo it."

In each of the next three legislative sessions, the House voted to return to three separate systems, but each time the move was defeated in the Senate. However, the House votes encouraged merger opponents to think the action could be reversed.

The legislation provided for a four-year transition period, during which the new 15-member Board of Trustees was to organize itself and work out the difficulties of making one higher education system out of three.

The four-year gestation period was "a major flaw in the legislation," said Archie D. Chelseth, a member of the Board of Trustees. "It provided much too long a time for people to create mischief."

Not only did the House of Representatives vote repeatedly to dismember MnSCU but the House and Senate provided only $1 million for planning purposes, and Governor Arne J. Carlson vetoed even that amount. "That sent a political shock wave that there was only lukewarm support for the merger," Chelseth said.

Interim Chancellor Morrie Anderson was the governor's chief of staff
While many people accepted the new arrangements, others÷the strong faculty unions that existed in all three segments; the very vocal student organizations; those who lost their jobs or were demoted in the transition process÷continued to fight a rear-guard action against its implementation.

"Many people thought, Îyeah, weâve got a merger but it doesnât mean we have to change anything,â" said Judith Eaton, who took over as the first regular chancellor of the Minnesota State Colleges and Universities in July 1995.

For these and other reasons, not much has been done to solve the problems that presumably led to the merger.

Although some "articulation" agreements have been reached, the state universities still balk at automatic acceptance of credits earned in the two-year technical colleges.

"The whole idea of Îseamlessâ transfer of credits is nonsense," said Dille, the former Moorhead State president. "If a student takes Îaccountingâ at a technical college, thatâs really just bookkeeping, and heâs usually not ready to move into a second-year accounting course at a four-year campus."

No one seems to know how many credit transfer complaints there have been over the years. Whatever the number, there is little evidence that it has been reduced by the MnSCU merger.

To save money and increase efficiency, 28 community colleges and technical colleges have been consolidated into 11 comprehensive two-year schools, with mixed results.

Some new community college districts report that administrative costs have been reduced, that identical courses no longer are taught at both the community college and the technical college, and that students have more program choices.

But a visit to Ridgewater Community College, in Wilmar (population 17,531), in the flat Minnesota farmlands 100 miles west of the Twin Cities, made it clear that merger has done little to end the long feud that has raged between the academically-oriented community colleges and the technical colleges.

"The conflict was worse on this campus because the two colleges were side by side," said Mary Retterer, who was president of the community college and now runs both campuses, as well as a third in Hutchinson, 50 miles away.

Instructors in the technical college earn less and work longer hours than their counterparts across the road, creating fertile ground for discord. "They donât meet together," Retterer said. "They wonât even eat lunch together."

Each faculty is represented by a different union, and the two unions fight constantly over class assignments and other matters.

"Until these kinds of turf-grabbing issues are settled (and they must be settled in St. Paul), we arenât going to make much progress," the president said.

Early predictions by Senator Moe and others that the merger would save money have proved to be incorrect. One action alone÷ creating a statewide pay schedule for technical college faculty and support staff÷has cost an additional $13 million a year.

Some money was saved when a community college and a technical college were joined and one administrative staff could serve both. But those savings were wiped out by other "up front" costs of the consolidations.

Ridgewater Community College has spent about $350,000 on such items as publicity, new signs and new stationery, and it will be at least five years before savings from administrative cuts catch up with those expenses, President Retterer said.

The notion that merger would save money was "pie in the sky," Trustee Archie Chelseth snorted. "Itâs costing more, not less."

One way to save money would be to close small, costly campuses in small-population areas (in 1996, Minnesota had 23 public two-year colleges with enrollments of less than 1,000. Of those, a dozen were below 500), but that would collide with the stateâs commitment to provide higher education within commuting distance of every eligible student.

It also would mean closing campuses in districts represented by powerful legislators, so it is not likely to happen.

Former Chancellor Judith Eaton resigned after 22 turbulent months
Judith Eaton made some progress toward merger goals during her 22 months as chancellor.

Eaton, who is described by friend and foe alike as intelligent, articulate and possessor of a high energy level, plunged into her new role as a "change agent," which is what, she said in an interview, "the board hired me to be."

She replaced several campus presidents and cut the central office staff in half, after Governor Carlson attacked it as as a "staggering and scandalous bureaucracy."

But the cuts were widely criticized as a "meat axe approach" that eliminated many important jobs. For example, the facilities planning staff was so depleted that "they simply were not getting the work done," said Lyndon Carlson, chair of the House of Representatives education committee.

Eaton tirelessly pushed the idea that student success, whether in a two-year or a four-year program, should be based on sound assessment of what the student has learned, not the number of hours spent sitting in a classroom.

She produced a much-praised "strategic plan" for MnSCU, with a heavy emphasis on the development of specific job and career skills, and then held 12 town meetings around the state to sell the plan to local citizens.

Although Eatonâs high-powered approach grated on the nerves of many Minnesotans, the chancellorâs first year or so on the job seemed to go reasonably well. But the last few months before her abrupt resignation last April were a nightmare.

She was sharply criticized by many legislators for presenting a financial reallocation plan that would have provided less money for small campuses in remote areas, and for not following legislative instructions in drawing up plans for a new Metropolitan State University campus in or near Minneapolis.

During one hearing, House Speaker Bob Carruthers shook his finger at Eaton and asked, "How many times do we have to tell you before you get it right?"

Representative Gene Pelowski, who chairs the higher education finance division of the House Education Committee, called Eatonâs performance a "meltdown."

But the former chancellor said no answers she might have given would have satisfied the Legislature because some of its most influential members have their own ideas about where the new campus should be built.

"The underlying issue is who is going to control the system÷the Board of Trustees or the Legislature?" she said. "I had supposed it was the board but many legislators did not see it that way."

Meanwhile, Eatonâs relations with her own trustees were worsening. Some of the board members who hired her were gone, and their replacements took a more activist approach to the role of trustee.

In the last year the board "has changed from being an honorific board to being a policy board," said Trustee Robert Erickson, who made a lot of money in the supermarket business and later was vice president for finance at the University of Minnesota. "Just as they have in corporate life, education boards have become aggressive with their CEOs (chief executive officers), as opposed to just passing things through."

But Eaton thought the board was engaging in micro-management on some occasions. Staff members report angry exchanges between the chancellor and some trustees at private dinners and other events not in the public eye.

As troubles mounted, some of Eatonâs weaknesses as an administrator became more apparent. She insisted on making most decisions herself, delegating little responsibility to her staff, former aides said. In part this was because she apparently trusted very few people, either on her own staff or on the campuses.

"She was like the Lone Ranger, but even the Lone Ranger had Tonto," Trustee Chelseth said.

"I once asked her who she trusted on her staff, and she replied, Îno one,â" said William Ulland, the former board chair. "You canât survive that way for very long."

But businessman Gary Mohrenweiser, who was board chair when Eaton was hired, praised the chancellor for doing what the trustees asked her to do.
Related information

MnSCU Statistics

THE SIX-YEAR-OLD Minnesota State Colleges and Universities system is the second-largest collection of two- and four-year colleges and universities in the nation. Only the State University of New York is larger.

  • Enrollment: 145,172 headcount; 111,460 full-time equivalent (fall 1996)

  • Number of campuses: 53

  • Employees: 20,000 full- and part-time faculty and staff

  • Students: 81 percent white, 54 percent female; 97 percent are undergraduates and 55 percent attend full-time; one-third are 30 or older.

  • Operating Budget: $988 million for fiscal 1998 ($502 million will come from the state, $236 million from tuition, $250 million from fees, grants and other revenue sources)


"Judith saw herself as a Îchange agent,â as a hatchet man, or hatchet woman if you will," Mohrenweiser said. "We asked her to make some tough decisions÷downsize the St. Paul office, do some hard bargaining with the unions, show some evidence of savings÷ and she carried out a lot of that·Maybe she didnât always have the best technique. Maybe she was sometimes like a bull in a china shop. But she did what the board had in mind; she didnât flinch from that."

Some trustees said Eaton was encouraged to look for another job but Ulland, Eaton and others deny that. In any case, when she was offered the presidency of the new Council for Higher Education Accreditation, Eaton accepted and left Minnesota for Washington, D.C., on June 30.

The new interim chancellor is Morrie Anderson, 54, who was Governor Carlsonâs chief of staff for two and one-half years before his appointment. He also served one year on the MnSCU Board of Trustees.

Anderson has been in city, county and state government since 1971 and is said to be an excellent manager. He also is thought to have the respect of both Republicans and the Democratic-Farmer-Labor Party, which controls both houses of the Legislature.

"He is a seasoned administrator," Trustee Robert Erickson said. "Weâve had so much turmoil, there was a feeling we had to get the nuts and bolts in place before we can do anything else. We think Morrie can do that."

But Anderson has had no experience as a higher education administrator, and his appointment smacks of politics to many observers.

Andersonâs early moves have been well received, especially the hiring of Linda Baer, the highly-regarded academic vice president at Bemidji State University, to be vice chancellor for academic affairs in the central office.

Current and former staffers report that the level of tension in the central office has subsided since Anderson arrived.

In-fighting on the Board of Trustees seems to have died down, as well. In September the board unanimously elected Michael Vekich, who runs a management and financial services company, as board chair. It was the first time the chairmanship was not decided by a single vote.

But most of the work of transforming this large, awkward mixture of universities, community colleges and technical colleges into an effective higher education system remains to be done.

Senate Majority Leader Moe remains hopeful.

"This new system has great potential for the state, although we have yet to see the fruits of it," he said. "But with a new chancellor and a more unified board, that might change. I hope so."

Photos by Steve Woit for CrossTalk

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