Chancellor Jim Petro Introduces Enterprise University Plan

News Release Date: 
08.12.11

Universities get mandate relief, freedom to innovate, new Preeminent Scholars Program option

COLUMBUS, OH, Aug. 11, 2011 – Ohio Board of Regents Chancellor Jim Petro today charted a new course for higher education in the state, presenting a plan allowing Ohio’s 14 public universities to be free from mandates which stifle efficiency and innovation. 

“Ohio’s universities are a driver of economic development in the state. By allowing our universities to be free from mandates and operate as an enterprise of the state, Ohioans gain increased efficiency, effectiveness, and competitiveness that will help drive our 21st Century economy,” said Ohio Board of Regents Chancellor Jim Petro.

This summer the Ohio General Assembly and governor passed a State operating budget which takes bold steps toward improving Ohio’s already great universities. Historic construction reform, commercialization expansion, and the ability for universities to enter into lease-back agreements were accomplished to help universities realize cost savings. The Enterprise University Plan, in concert with the tuition cap and the three-year degree program, is aimed at giving universities freedom to innovate while helping keep university costs manageable for Ohio families.
 
While keeping in place the tuition cap of 3.5% per year for the two-year budget, The Enterprise University Plan can:

• Free our great universities from burdensome, duplicative, and sometimes outdated laws which restrict universities’ abilities to innovate as entrepreneurial enterprises.

• Increase the accountability and productivity of the universities resulting in higher attainment leading to more degrees.

• Create the Preeminent Scholars Award Foundation, as an option, or other focused initiatives to provide the incentive to attract and retain the best and brightest students, and reverse the brain-drain trend in our state.

The Enterprise University Plan would remove mandates.  For example: The Plan would eliminate statutory enrollment limits for public universities, eliminate the requirement that the state controlling board must approve funds for the purchase of real property and allow universities to discount tuition to maximize the utilization of campus facilities. 

“With a stagnant population we can no longer delay taking bold action to allow our public universities to drive economic development through innovation.  By implementing the proposals in this report, the Ohio General Assembly can take the next step to ushering in a return to prosperity in the Buckeye state,” said Petro.

The Enterprise University Plan consists of two phases that will each require enacting legislation:

Phase One provides all of Ohio’s 14 public universities with the reduction of mandates and regulations. Universities will be asked to submit three reports that will help the Board of Regents and the state better determine campus and technology utilization, and their impact on Ohio through jobs placement.

Examples of mandate relief:
• Allow the Board of Trustees to determine the length of term for Board officers.

• Allow Boards to meet by videoconference/other technological means.

• Eliminate enrollment limits in statute for Ohio’s public universities. 
o Currently 5 universities (Bowling Green State, Kent State, Miami, Ohio, and Ohio State  Universities) are subject to enrollment caps enacted in 1969 to ensure growth in the state’s newly incorporated municipal universities.  Since these municipal universities (Akron, Cleveland State, Cincinnati, Wright State, Toledo, and Youngstown State) have been allowed to thrive, the enrollment limits which have not been adjusted since 1989 are no longer necessary.

• Eliminate the requirement that controlling board must approve funds for the purchase of real property.

• Allow universities to differentiate the cost of tuition based on size and facility reasons. 
o Currently universities may not discount tuition. Campus buildings are sometimes going unused during “non-peak” hours (i.e. – Evenings, Weekends).  Allowing universities to offer a discount of tuition during these non-peak hours would result in better facility efficiency and cost savings.
 

• Allow universities to mandate electronic paycheck deposits for all employees for cost savings.

Phase Two provides a framework for Ohio’s 14 public universities to receive greater autonomy from the state through further reduction of mandates. Universities which agree to strive for aspirational benchmarks measuring fiscal and academic stability can enter into an agreement with the Board of Regents to become an Enterprise University. As part of this agreement a university would agree to invest a portion of their State Share of Instruction (SSI).  One proposal calls for this investment to be made to the Preeminent Scholars Award Foundation. 

Enterprise Universities which meet very high benchmarks measuring fiscal and academic stability would be eligible to advance to International Enterprise University status. These universities will receive the highest level of autonomy through the reduction of mandates and duplicative oversight. These agreements require universities to sustain maintenance of effort that could raise benchmark standards.

Benchmarks to Earn International Enterprise University status are:
1. Unallocated net assets of 30% of total operating expenses
2. 5-year graduation rate of 75%
3. 1st to 2nd Year Retention Rate of 85%
4. Endowment of 30% of total operating expenses
5. Research Expenditures of $250,000,000 or more
6. STEM Degree Percentage of 20%
7. Affordability Measured as a Percentage of Consumer Price Index (CPI) – Bonus for institutions who lower tuition
8. 20% of FTEs Participating in intern/co-op programs
9. Direct Articulation Partnership w/ Community Colleges

The Board of Regents will work with universities, the Ohio General Assembly and the governor’s office to aggressively pursue a culture of continuous improvement at Ohio’s universities to ensure the maximum benefit for Ohio and its economy. 

Throughout the process of creating The Enterprise University Plan, care has been taken to engage key stakeholders including meeting with the American Association of University Professors, the Inter-University Council and the administrations of Ohio’s public institutions. Input will be sought through the upcoming legislative process.