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programs in 2004, and is the
largest employer in Richmond.
But a crucial difference
exists between VCU and its
much older counterpart, UVA.
Virginia’s flagship university
has an endowment in excess of
$2 billion, which contributed
$83 million last year to campus
Further, it can easily attract
out-of-state students willing to
pay $35,000 a year for a UVA
degree, and it could also raise in-state tuition substantially
and have no difficulty filling its classrooms. In short, UVA has
financial clout, or what is known in Virginia higher education
circles as “market potential.” And market potential is a major
factor in earning a high bond rating.
Virginia Commonwealth University, on the other hand,
has little in the way of endowment, and, with many of its
students coming from lower-income families, has limited
capacity to raise tuition. It lacks market potential, and
President Eugene Trani says the university will forego a Level
III application. “I want all the operational flexibility I can get
(from the restructuring),” said Trani. “But the truth is that
operational flexibility pales in importance to other issues at
VCU.”Those other issues can be boiled down to scrambling
for more funding from the state.
DuringWarner’s tenure the state began employing
a conceptual figure for each institution known as “base
adequacy.” Essentially, base adequacy is a dollar figure that
the state calculates will be needed to operate a campus over a
fiscal year. Pursuing base adequacy has become the Holy Grail
for schools like VCU because they have few other sources of
“When I see the governor I don’t talk so much about
restructuring,” said Trani. “I say, ‘Governor, what about
our base adequacy?’ Over and over again, I talk about base
adequacy. For us, it’s far more important than restructuring.”
In one sense, then, the restructuring legislation has divided
Virginia’s public campuses into two groups: At the top sit
UVA, Virginia Tech, andWilliam andMary, who are pursuing
Level III status in the hope they can make maximum use
of their “market potential.” Below them are the remaining
campuses, without market potential or Level III status, who
will be left scrambling for base adequacy funding.
“In Virginia, there are no statewide bodies like you have in
California with the Board of Regents,” commented one state
official. “So when it comes to making a deal with the state,
each campus operates on its own. Those with the most moxie
usually win, and that’s been the case with restructuring.”
Even for the top three, the value of the restructuring prize
Most college administrators
seem guardedly optimistic
that the new management
agreements with the state
will leave them better off
than before.
Virginia’s Restructuring Is a
“Work in Progress”
April 2008
he attempt by Virginia’s public colleges and universities to
obtain more freedom from state control has produced mixed
National CrossTalk
reported on this subject in summer 2005,
legislation had been passed to grant public institutions autonomy over
some operations, in exchange for their agreement to pursue a set of state
goals. Since then, the schools have gained considerable autonomy in the
areas of capital outlay, purchasing, human resources and information
technology. However, the most important change they sought—the
authority to set tuition rates—has remained in the hands of the
governor and the legislature.
“They got sort of half a loaf,” said DavidW. Breneman, director
of the Master’s in Public Policy Program at the University of Virginia,
“but that’s pretty good” for a new set of policies that involves so many
changes from past procedures.
“Overall, there are more positives than negatives in the new
approach,” said Colette Sheehy, UVA’s vice president for management
and budget.
So far, most of the changes have taken place at UVA, Virginia Tech
and the College of William andMary—designated as Level III schools
in the plan. (Virginia Commonwealth University became the fourth
Level III institution in 2008.)
These institutions now plan and build their own academic buildings
without prior approval from state agencies, as long as no state dollars
are involved.
“Basically, we now
have authority to manage
a project from beginning
to end, including a
certificate of occupancy,
without getting approval
fromRichmond,” Sheehy
said. “This saves time and
money.” New buildings for
the College of Engineering
and the College of Arts and
Sciences, both financed
by private donations,
have been added to the
Charlottesville campus
since the new policy was adopted.
Samuel E. Jones, vice president for finance at William andMary, said
the college was free to build a new $75 million business school, paid for
by donations and college-supported bonds, without prior approval from
the state. This has cut several months off the process, Jones said.
Officials of the Level III schools agreed that the ability to do their
own purchasing, instead of depending on a central office in Richmond,
has been helpful. But all three reported some problems in implementing
their new authority to handle information technology.
Moving responsibility for “human resources” (including job
classification and pay scales) from the state level to individual
institutions has been a slow process, encountering many obstacles, but
none that seem insurmountable.
However, the all-important ability to set tuition rates for in-state
undergraduates, which UVA, Virginia Tech, andWilliam andMary
The most important
change Virginia’s public
colleges and universities
sought—the authority
to set tuition rates—has
remained in the hands
of the governor and the