Political Ponderings: Why Not Truly Free SUNY and CUNY?

by Raymond J. Keating

August 4, 2010

Apparently, it’s not easy figuring out how to spend other people’s money in New York, as state lawmakers passed a budget more than four months late on Tuesday night.

Central to this year’s tardiness was wrangling over a bill to provide the State University of New York and City University of New York with greater autonomy from Albany’s dysfunctional politics. But this higher education “empowerment” measure was pushed aside so lawmakers could pass the second latest budget ever.

According to reports, however, legislative leaders have agreed to continue negotiating on the SUNY and CUNY matter. But how about even more fundamental reform: Why not complete autonomy for SUNY and CUNY through privatization?

Given New York’s big government ways, it’s not surprising that SUNY ranks as the largest public university system in the nation with 64 campuses. What’s the largest urban public university system? CUNY, of course, with another 20 entities. SUNY and CUNY combine for about 736,000 full-time and part-time students, and approximately 55,000 full-time equivalent employees, according to state budget documents.

As proposed by Governor David Paterson in January, the Public Higher Education Empowerment and Innovation Act would provide SUNY and CUNY with greater freedom in various operations, such as contracting and land use. But the key issue, naturally, is money. Tuition would be removed from the state budget process, with SUNY and CUNY officials setting tuition increases (within some limits), establishing different tuition rates for campuses and programs, and keeping and spending tuition and program revenues.

As negotiations proceeded, there was talk of uniform tuition increases across SUNY – rather than by campus – and commensurate increases in the Tuition Assistance Program for low and middle-income students to absorb higher tuition costs. For good measure, state subsidies would not be reduced.

But if government is going to be involved in the business of higher education, why not do it in a far more focused and cost effective manner than subsidizing these massive public university systems?

Keep in mind that, according to the latest complete data from SUNY, net student tuition and fees amounted to only 12 percent of the SUNY system’s total 2008-09 revenues, while state appropriations came in at 36 percent. And that state taxpayer share did not include TAP nor legislative grants for specific projects.

It also is important to recall that public universities sprang to life for a variety of reasons. But the central justification for the creation of SUNY and CUNY, and the subsequent vast expansion of each, was the provision of higher education services for low-income residents who could not afford private tuition rates. But once government went down the path of setting up its own colleges and universities, special interest pressures, combined with politicians seeking votes and support, inevitably led to a vast expansion of the agenda and mission, and increase in total costs.

In fact, these days, SUNY is trying to bill itself as an economic engine for the state. But the notion that government colleges and universities will somehow drive economic growth is rather silly, given that other states have comparable or better public institutions of higher education, and more critically, do not have the enormous tax and regulatory costs that drive entrepreneurs, businesses and jobs away from New York.

For taxpayers and students, the answer is to grant complete freedom and autonomy to SUNY and CUNY, with government’s role re-focused on aiding those who have the skills and intellect to pursue a college degree, but truly do not possess the means. Real, productive reform means two steps.

Turn SUNY and CUNY into private institutions. Allow that process to rationalize and depoliticize these entities, with the systems being broken up, various campuses closing, others combining, and some going it alone. At the same time, focus whatever taxpayer support of higher education deemed appropriate on students in need, no matter where they go to school in the state.

This will shift the incentives across higher education away from a broad and costly system of serving political interests, to one where colleges and universities work and compete to serve students well. If such fundamental reforms were undertaken in New York, they would spread across the nation. Imagine New York actually serving as a positive example to the rest of the nation for a change.

The governor was absolutely right to emphasize autonomy for SUNY and CUNY. But his plan does not go nearly far enough.

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Raymond J. Keating is the publisher and editor of Keating Reports and the Long Island Sentinel. He can be reached at keatingreports@aol.com.

Mr. Keating regularly speaks to groups and assemblies on economic, political, policy and cultural topics. To inquire about having Mr. Keating speak to your gathering, e-mail him at keatingreports@aol.com.

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