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High Stakes in Ohio

October 27, 2010

As many states face billion-dollar deficits and struggle to maintain their quality of education with increasingly stingy budgets, few have remade their higher education systems as aggressively as Ohio has. Under Gov. Ted Strickland, the structure and financing of higher education have undergone dramatic changes, not least of which is a performance-based funding system that awards institutions government money based on retention and educational attainment.

But those developments -- along with a 10-year strategic plan for higher education initiated in 2008 -- may now hang in the balance of the 2010 midterm elections. Strickland's Republican opponent, the former U.S. Representative John Kasich, has led the hotly contested governor’s race since August, maintaining an increasingly convincing lead. (As of Tuesday, Kasich was up in the polls, 48.0 percent to 45.3 percent.)

Many observers suspect that the structural and other changes that Strickland put in place could be scuttled by a new governor, either because they are too expensive (with the state facing an $8 billion budget shortfall) or because they're not his own. It is uncertain whether Kasich, were he to win, would retain Eric D. Fingerhut -- a close political ally of Strickland's who carries out his agenda as chancellor of the newly created University System of Ohio -- or replace him with his own right-hand man. Some college officials worry more generally that Kasich, as a budget hawk in Congress, would take a different approach to higher education funding given Ohio's financial mess, declining to favor colleges and students as Strickland has.

Yet others say the chancellor’s long-term plans have enough traction and support in the legislature that people are worrying needlessly. Fingerhut himself says higher education is a bipartisan issue in Ohio.

Many are cautiously optimistic. State Representative Ted Celeste says higher education reforms were birthed from a bipartisan legislative effort, so one would think -- or hope -- that they would be sustained under a new administration. But, he notes, “The politics of a year when reapportionment and redistricting are at stake -- when the governor’s race is at stake -- politics take over. Policy moves down on the radar screen and politics move up.”

A 'Leader' in Higher Education Policy

Strickland has made higher education a cornerstone of his four years in office, vowing to reform the state's relatively decentralized public college system. In March 2007 the legislature passed a law allowing him, rather than the Ohio Board of Regents, to appoint the higher education chancellor, streamlining his newly created University System of Ohio and -- by default -- politicizing its head position. Despite the fact that Fingerhut, a former Democratic state senator, was appointed before the new law made the chancellor's position a cabinet-level job, he and Strickland have worked closely to usher in a new era.

While directly appointing the chancellor allows the governor to manage higher education without dealing with a lot of time-consuming negotiation, it also can make for turnover in leadership because, at all levels of politics, cabinet members tend to leave when administrations change.

“The issue is sort of executive agility versus checks and balances and stability,” says Paul E. Lingenfelter, president of the State Higher Education Executive Officers. “The need for continuity over time -- and also a sustained capacity over time -- is an argument to have higher education leadership one step removed from the political process,” says Lingenfelter, who opposed the restructuring for that reason. (The structure gives the chancellor a five-year term compared to the governor's four-year one, theoretically protecting the chancellor for getting the immediate boot if a new governor takes over.) But in Ohio’s case, he acknowledges, “having the governor deeply engaged certainly created momentum, and I think it did move things along.”

Strickland sought more control to tackle issues such as rising tuition (it had increased 9 percent annually in the decade preceding his election) and substandard educational attainment (33 percent of adults had an associate degree or higher in 2006, ranking the state 38th). He did so aggressively: in the first two years of his governorship, tuition froze throughout the university system -- which comprises 14 universities with 24 regional branch campuses, 23 community colleges and 200 adult work force centers for working adults seeking a degree -- and tuition increases were limited to 3.5 percent in each of his second two years.

A new funding system adopted under Strickland and Fingerhut awards state money based not on enrollment, but on who actually finishes courses and gets a degree. Part of a 10-year strategic plan aimed at graduating more students, keeping more graduates in Ohio and attracting more degree-holders from out of state, the funding structure is designed to contribute to the plan’s goal of raising enrollment by 230,000 students and the number of graduates 20 percent by 2017.

Photo: Kasich/Taylor for Governor

John Kasich, Ohio candidate for governor, at a job training forum

“It may not be perfect, but there’re some things that really stand out about Ohio,” says Aims McGuinness, senior associate at the National Center for Higher Education Management Systems. Perhaps most significant is the change in finance policy, which required an elaborate process to carry out. “A lot of other states talk about it, but the bottom line is, it’s probably not going to happen.”

Ohio has been rewarded for its efforts, too. Last November, the state received a $950,000 grant from the Lumina Foundation for Education in recognition of its approach to raising educational attainment with less public funding. The grant allowed the university system to combine administrative functions, potentially saving up to $100 million annually to be reinvested into student aid and other purposes.

And in January 2008, the Bill and Melinda Gates Foundation contributed a $12 million grant to support the Ohio Science, Technology, Engineering and Math Learning Network. That money would promote STEM education for high school students who, ideally, would go on to help meet the state goal of doubling the number of college graduates with STEM field degrees by 2015 and thereby boosting Ohio’s economy.

Brenda Albright, an Ohio consultant who has written annual reports on the state of the university system that Fingerhut submits to the legislature, says “there’s no question at all that Ohio is a leader” in higher education policy. “It’s important that higher education think and fund for the future, and connect the future to big goals.”

Albright praised Ohio’s 10-year plan for its incentives for colleges to achieve attainment goals, and for tying funding to educational attainment. The state has also formed programs creating low-cost degree pathways, like its Seniors to Sophomores program that lets high school seniors spend their year earning credit on college campuses, or its program that allows students to spend their first two years of earning a bachelor’s degree on a community college campus.

“(Ohio is) really trying to reach out and provide services that are needed to individual students,” Albright says. “There’s always a positive tone. By that I mean the sense is, ‘This is what we can do and this is what we want to do to help the citizens of the state.' Fingerhut always emphasizes the urgency of taking action.”

But the system is not perfect. In fiscal year 2011, state colleges and universities will receive only 11 (of 12) monthly payments. It’s an effort to ensure that the current budget stays balanced, but it will cost colleges $127.5 million -- though Strickland says they’ll get that money eventually.

According to the spring update on the strategic plan, enrollment at Ohio colleges has “surged,” and the state has saved more than $180 million through more efficient system operation.

Cause for Concern

There is no shortage of worry over the governor’s election. People who praise Strickland and Fingerhut’s work question whether Kasich would show the same commitment to higher education. (The Kasich campaign did not respond to multiple interview requests throughout last week.) And Fingerhut, who has been popular among college leaders, could even get the boot once his five-year term expires in 2012 and the time comes for the governor to either reappoint Fingerhut or choose a new chancellor.

Ron Abrams, president of the Ohio Association of Community Colleges, says Kasich has neither shown the public he has a plan for higher education nor acted favorably toward the sector in the past. Higher education is clearly at risk for budget cuts, particularly with the huge deficit and since the performance-based funding model increased state money for several colleges. (However, Celeste said it would be difficult for Kasich or the legislature to do away with the system because it’s been good for higher education and many people outside the state are talking about it -- in many cases as a model for their own university systems.)

Abrams believes there is much concern at a variety of levels over the status of Ohio’s reforms. “A lot of work in the strategic plan is just getting off to a start. Obviously, it depends on multi-year efforts to continue to move in a certain direction. If, come November, we get a new governor elected, I think everybody truly believes that a lot of what we’ve done will possibly go by the wayside,” he says. “I think it’s very clear that if Kasich wins, he’s going to make sure that he puts a Republican person in [as chancellor]. And when you look at what happens when that happens in other kinds of government positions…. they kind of set aside what their predecessor did.”

Governors can only take on certain things, so they need to make their own mark, McGuinness says. It’s rare for someone to enter an office and pick up his predecessor’s agenda; he’s more likely to create a new agenda for his incoming staff. “My issue is for the long-range implications of this, of maintaining a long-term agenda for the future of Ohio,” he says. “It really matters to have consistency of leadership. That’s what’s at risk in Ohio.”

But this was not an unforeseen dilemma. When the legislature made the chancellor a cabinet position, tying the post so closely to the governor, it did so with the knowledge that it could cause instability down the road. Still, the pros seemed to outweigh the cons. “At the same time that concern was going on, there was also the reality that the governor was supporting higher education,” Abrams says. “Now that there’s the reality that things could change, that concern is kind of resurfacing.”

It’s not a problem unique to Ohio. Of the five other states in which the governor either directly appoints the higher education leaders or must approve a commission’s hire, three have seen significant turnover in recent years, Lingenfelter says. Multiple people have filled the position in New Mexico, which adopted this system shortly before Ohio did. Minnesota has had two leaders in the past two years. And Colorado, which has had five different people in charge in the past six years, is now discussing the possibility of changing its appointment process. (The other two states with such a process are Maryland and Arkansas.)

McGuinness says it’s “good practice” for a board to appoint a chancellor or higher education executive, in consultation with the governor.

“I think in general, it is not good for higher education to have state policy go through dramatic swings based on a gubernatorial election,” Lingenfelter says. “I think higher education does best when there’s kind of a working bi-partisan concensus about the direction of a state. And that may exist in Ohio -- it might persist through the gubernatorial election no matter who is elected governor. But it might not.”

‘Of Interest to Everybody’

There are some indications of bipartisanship when it comes to higher education in Ohio. Optimists including Albright point to the first two years of Democrat Strickland’s governorship, when both the House and the Senate were controlled by Republicans. There was also strong support from the legislature for the Third Frontier program, for which voters recently approved a $700 million re-funding. The economic initiative -- which aims to create new technology-based products, companies, industries and jobs -- links universities and companies through research and development and is a source of pride for Ohio’s leaders.

“With some exceptions, this tends to be a bipartisan agenda,” McGuinness says of the state’s broad goals like widespread educational attainment. “This is of interest to everybody.”

Fingerhut, in an interview last week, was reluctant to speculate on the election’s potential consequences. But he believes the Ohio legislature supports higher education. “I would certainly say that the progress that has been made has been strongly bipartisan,” he said. “It has been both by design and necessity.”

And of course, one must keep the big picture -- the budget situation -- in mind. C. Todd Jones, president of the Association of Independent Colleges and Universities of Ohio, says college presidents within the association have spoken to both Fingerhut and Kasich in the past few weeks, and felt good about the outcomes. While Fingerhut "has done a great deal of work," Jones says, "his status as chancellor is probably ultimately less of an issue than the financial shortfall facing the state."

 

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