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Our view: Thunder from the west signifies a growing political storm for UVa

posted August 5th, 2016

The Roanoke Times | Posted 10 hours ago

The sound you just heard was either a summer thunderstorm boiling up — or, perhaps a shot across the bow of the University of Virginia and maybe even other colleges across the state.

Earlier this week, seven Republican legislators from Southwest Virginia (joined by an eighth from Southside) and two Democratic legislators from Northern Virginia sent letters to the university’s governing board to complain about its controversial $2.3 billion “strategic investment fund” and call for the school to freeze or roll back tuition.

It’s fair to say that Republicans from the state’s rural, western corner and Democrats from its biggest suburb probably don’t agree about much — so when on the same day they both call for essentially the same thing, well, perhaps we should pay attention, eh?

They’re not alone, either. Earlier, a quartet of Republicans from Hampton Roads — led by Sen. Bill DeSteph, R-Virginia Beach — sent letters to the state’s attorney general, auditor of public accounts and inspector general calling for an investigation of how this $2.3 billion fund came to be. In military terms, this would be called a pincer movement.

Before we look at where this might all be headed, let’s briefly recap how it started.

On July 6, Virginia Beach developer Helen Dragas — who had just completed her second and final term on the University of Virginia’s governing board – wrote a commentary piece in The Washington Post in which she accused the school of amassing what she called a secret $2.3 billion “slush fund” at the same time that it was raising tuition 74 percent over the past seven years.

The university countered that this fund was no secret at all, and that it was actually prudent and far-sighted fiscal management to allow the school to make “transformational investments in the quality of a UVa education, of its research and its health care services, without relying on tuition or tax dollars.”

Still, the revelation that the university had accumulated $2.3 billion without much public oversight got the attention of politicians in both parties. “An extraordinary amount of money that seems to have magically appeared out of nowhere” is how the Republican legislators from Southwest framed it.

Keep in mind this key fact: This fund is part of the school’s endowment — which sits at $7.5 billion.

This has the feel of an issue that is going to only get bigger. The politics are too inviting for it not to. What politician doesn’t want to be seen getting outraged at the “discovery” of this fund at a time when tuition keeps going up and up?

The Southwest legislators — led by Del. Terry Kilgore, R-Scott County — have a special reason to be concerned: The University of Virginia oversees UVa-Wise so, from their point of view, any money being stashed away in Charlottesville to build a $50 million yoga and meditation center is potentially money not being spent in Wise. Or, as they put it, this is “a stunning revelation we simply cannot accept.”(You can read both letters on roanoke.com as part of this editorial.)

There are some serious policy questions being raised here, so let’s get to them:

  • Who does this $2.3 billion really belong to? “In its July press disclosure, the University talked about an investment plan for the fund, as if these funds solely belong to the University, a state agency, and can be spent at its discretion,” write state senators Chap Petersen and Scott Surovell, the two Fairfax County Democrats. “We beg to differ.” They don’t complete that thought — just who the money does belong to? — but their implication is that the university isn’t an independent actor.
  • Who really controls this money? State colleges are governed by independent boards, appointed by the governor, and traditionally operate like quasi-independent principalities. The General Assembly can apply some pressure, although its record on that is mixed.
  • What should this $2.3 billion be used for? The legislators weighing in so far say it should be used to freeze or even roll back tuition increases. University rector William Goodwin says the money should go “to improve academic quality, help minimize tuition costs and student debt, conduct research that benefits society, and offer world-class medical care.” What’s the highest good here — lower tuition or “research that benefits society” and “world-class medical care” through the university’s hospital? That’s a good policy debate worth having. This, of course, raises many other questions:
  • What does it cost to operate a first-rate state university — and is the state providing enough money for that? The answer to the first part of that question may be debatable, but colleges would say the answer to the second is clearly “no.” Only 9.3 percent of the University of Virginia’s budget comes from the state — and over time, that percentage has been declining (even if the actual dollar amount has gone up). That, of course, raises the question of whether it’s truly a state university at all. (At Virginia Tech, the figure is still just 18 percent.)
  • Why is tuition going up so much — and what would it take to hold it down? CollegeBoard.org reports that in-state tuition and fees at Virginia colleges have gone up an average of 111 percent since 2004 — while the rate of inflation was just under 28 percent. Virginia now has the seventh-highest average tuition in the country, CollegeBoard.org says.
    The State Council of Higher Education for Virginia says that ideally, students should cover 33 percent of the cost of their education. Instead, the council reported this week, they’re paying more than half. To reduce the students’ share to the official goal, however, would require more than $600 million in state funding.

That, the council said, would cut average tuitions by as much as $2,500. It’s easy to look at UVa’s $2.3 billion fund and do the math on how much the school could cut tuition, but what about other colleges that probably don’t have such money? That, of course, brings us to this:

  • Do other state colleges have similar funds? Will the focus on the University of Virginia lead to forensic accounting at other state schools? Perhaps it should, so we can have a true picture of everybody’s funding. (Virginia Tech, by the way, says it doesn’t have such a fund.)
    For all the commotion so far, there are some politicians who have been silent. Will they remain so?

URL: http://m.roanoke.com/opinion/editorials/our-view-thunder-from-the-west-signifies-a-growing-political/article_3b30d7c2-01af-55ef-a0b3-effefecf32f4.html?mode=jqm

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