Reforming Florida Higher Education A Report For Governor’s Blue Ribbon Task Force On Higher Education Reform By Tom Auxter President, United Faculty of Florida (UFF) July 26, 2012 What does reform mean in Florida higher education?In Florida, it is easier to start with what reform is not. In our state, reform is not reorganizingthe structure of higher education. Florida higher education is already organized to succeed in itsmission. More reorganization is not reform; it is a waste of time and resources. We are alreadyheaded in the right direction and need to invest without delay in what we already know works.Certainly, this was clear by 2009 when the major stakeholders in higher education gathered atthe Florida Atlantic University (FAU) Jupiter Campus to see if they could forge a consensus onpriorities and funding. Dave Spence, President of the Southern Regional Education Board(SREB), was invited to speak at the beginning of the meeting.1 He emphasized that Floridaalready has the structure it needs to succeed.Florida, he said, is a model for the entire nation in how to design a system that gives studentsmaximum access to higher education at the lowest cost. “You have the best communitycollege and transfer system in the nation.” The integration of academic curricula across highereducation means that Florida produces community college graduates who enter publicuniversities or colleges with acceptance of academic credits already earned. In this articulationsystem, community college graduates are ready to begin the last two years of a bachelors’program without retaking courses and without the need for remedial work.1 SREB is dedicated to finding reforms that work in the 16 Southern states that are SREB members. It also publishesresearch on best practices. It is funded by major foundations and by several corporations.
The effectiveness of the Florida system became clear to stakeholders by 2009. It recentlybecame clear to citizens across the state when they heard the news that the U.S. Chamber ofCommerce ranked Florida first in the nation in access and affordability. As Dean Colson, chair ofthe Florida Board of Governors, said when the results were published, “Florida was the onlystate in the nation to achieve an ‘A’ … for both four-year and two-year public institutions in theStudent Access and Success category.” Florida scored another first place rating in the categoryof Efficiency and Cost-Effectiveness with the cost of a university degree set at only $46,071. 2The median national cost for a degree is more than $68,000. Only one other state also had acost of less than $50,000. Only five other states had a cost of less than $55,000.In other words, our investment in higher education is used to reap efficiencies which areextremely beneficial to Florida and to its higher education system. Florida’s investment is well-spent and pays off in graduates with less debt incurred. Now, both SREB and the U.S. Chamberof Commerce single out Florida as a model for other states to follow.What does this mean for reform? It means we have already developed the structure -- andproven its value through documented results -- for a model higher education system.Reforming the system cannot mean reorganizing the system, and it cannot mean making itmore accessible and effective in comparison with other states.Reforming Florida’s system means designing a mechanism for funding that builds on thisfoundation. We need to identify where more funds can best be used as they become availableand increase the production of degrees within a verifiably effective system. Reform also meansasking how much more we could do if funds were available for the task. What are the economic benefits of higher education?There was already a consensus among the stakeholders in 2009 that answering the questionrequires creating a knowledge-based economy that draws heavily on the contributions ofhigher education. The problem is that Florida’s economy currently depends on tourism, newhousing sales, and agriculture. Because tourism and new housing only thrive when familieshave a significant amount of disposable income, Florida is prone to deeper recessions thanthose states, e.g., North Carolina, that have already diversified their economies. This is whyFlorida is first to enter a recession when disposable income declines and is last out of arecession when the nation finally has enough extra income to pay for things like tourism andnew housing.North Carolina started making the transition decades ago -- away from an economy based ontourism, housing, and agriculture. North Carolina decided to diversify its economy through thedevelopment of its universities in the Research Triangle, thereby drawing research dollars to2 . National Center for Education Statistics (NCES), U.S. Department of Education.
the state and spawning commercial enterprises through research-based innovations. At thesame time, the state expanded enrollment in universities. Legislators and opinion leaders wereclearly expecting to educate a workforce that measures up to the task of working in these newbusinesses. They were also hoping to prepare citizens who will be up to the task of governing ina growing economy.We have seen why investing in a knowledge-based economy is the best path out of a recession-prone state economy. What steps can we take to implement this kind of reform?The first step is to restore the funds cut in the past five years from what has proven to be a veryefficient system that serves a critical economic need in the state. About a third of state supportfor the universities disappeared during this time. As Dean Colson said, restoring funds is moneywell-spent. We know Florida’s accountability system works well in producing graduates ataffordable costs. If the evidence from the SREB report and/or the evidence from the Chamberof Commerce rankings are not enough to convince us that the investment is worthwhile, thenconsider the following.A study conducted this year by a team of economists at the University of Florida (UF) andFlorida State University (FSU) found that the universities generate $52 billion annually for thestate’s economy.3 Seven per cent of the state’s economic activity comes from universities.However, this figure does not include all the wealth generated by a university in a Florida city.For example, sports events and cultural activities draw thousands -- often for an entireweekend. This fills up motels and restaurants and adds customers to stores and vendors --making it possible for businesses to survive in a weak economy. A point that needs emphasis inFlorida now, with its recession-prone economy, is that universities insulate communities againstthe worst of recessions.What is the economic benefit that graduates generate? The study found that each universitygraduate earns an additional $1 million in salary over a lifetime compared with a high schoolgraduate. That means more dollars coming into the state economy and more taxes paid bysomeone who is employed and not dependent on state social services or expensive lawenforcement remedies.Although Florida currently has an unemployment rate of almost 10%, those who have a B.A. orB.S. degree are much less likely to be unemployed; the unemployment rate is cut in half. Thosewho have only a high school diploma are four times more likely to be unemployed thansomeone who went on to complete a four-year degree.3 University of Florida News, February 13, 2012.
What difference would better funding make?For students, it would mean more classes open for enrollment so they can sign up for coursesneeded to complete a degree. Hiring more faculty is critical for improving how the systemworks. It is inefficient when we have a skeletal staff of faculty in most departments to teach allthe courses across the range of specializations required to finish a program with the knowledgenecessary to be proficient -- either for entering a career or pursuing graduate studies for acareer later. When one faculty member gets a grant, or is on leave, a specialization taught onlyby that person must be covered by someone who is not a trained specialist. Otherwise, thecourse is not offered for a year -- depriving students of an opportunity to achieve competencyin an area required for proficiency in a field, or delaying their graduation until the next year.We waste time and money in Florida when students have to stay an extra semester or yearbecause there are not courses open for them to get what they need to graduate on time. Itwastes the time they could have been productive after an early graduation, and it wastes themoney they have to pay back when extra student debt is incurred because of the delay. It isalso very inefficient to have universities and colleges fund the infrastructure to offer degrees,and then not have the funds to provide enough extra classes for more students who arequalified and seeking admission to programs for which we already pay the start up costs forlaunching. The consequence is that the student/faculty ratio at Florida universities is muchworse than their counterparts in other states, and we suffer in national rankings andcompetitiveness as a result.The problem is compounded by “salary compression.” What is it, and what is the effect?Salaries become compressed when the longer faculty members stay in Florida, the worse theirsalary becomes in comparison with their counterparts in other states. Compare the salary of aPh.D. who accepted a job in Florida at market rates a decade ago with the salary of acounterpart (someone who also got a Ph.D. from the same institution the same year, butaccepted a job at the same starting pay at a comparable university in a different state). Afterten years, the salary of the faculty member staying in Florida is typically $10,000 behind thesalary of the counterpart. For each decade after, that faculty member is an additional $10,000behind. Someone who stays in Florida for thirty years will have a salary $30,000 behind thesalary of a counterpart. The effect is to drive faculty away from Florida. The result is a “braindrain” away from Florida universities at just the time faculty are desperately needed to movethe state toward a more diversified and productive knowledge-based economy.FSU President Eric Barron explained to the Task Force on June 25, 2012 that because Florida is astate that generally does not give salary raises after setting the starting pay at market rates,
universities in other states easily make attractive offers to pick off talent in Florida. He spokeabout the most recent round of outside offers made to 58 arts and sciences faculty members.All but eight accepted the offers, which averaged $20,000 more than their salaries at FSU. Afterfive years of budget cuts in Florida, there are no funds to keep talented faculty here. “They’reletting us become the farm team for other states,” he said. News reports tell us that thesituation is just as bad, or worse, in business school disciplines.4Jennifer Proffitt, a FSU professor and Vice President of United Faculty of Florida at FSU, alsoemphasized the seriousness of the problem. She discussed a survey of faculty taken by UFF inMay 2012 and what it revealed about why faculty are leaving FSU in record numbers. Facultybelieve they are not rewarded for their loyalty, their efforts, and their accomplishments. Formore than a decade, it has been very hard to keep faculty when salaries are so low. But now,when the legislature actually is reducing state contributions to retirement plans 5 and evenreducing salaries to pay for retirement benefits previously covered, we see the straw thatbreaks the camel’s back for many faculty previously committed to staying. Today, it is hard tofind faculty who are not looking for jobs elsewhere, or being recruited for jobs elsewhere,because the level of dissatisfaction is so high. Their colleagues in some other places they knowabout are not treated like this, and now Florida faculty are thinking it may be time to join them.In short, the restoration of state funds cut in the last five years is the sine qua non condition forreforming Florida higher education. There are no reforms that can take root without improvingthe student/faculty ratios, and there is no way this can happen without restoring the one thirdof budget funds that were cut by the state legislature in the recent past. This would be a steptoward reversing the downward spiral and declining national rankings that threaten the entireuniversity system and also compromise student access and quality in the college system. This4 Tallahassee Democrat, June 2, 2009 and November 27, 2011.5 At FSU, for example, 74% of faculty are enrolled in the Optional Retirement Plan (ORP), adefined contribution plan. This past spring, the Florida Legislature passed HB5005, which cutstate contributions from 7.42% to 5.14% and will cost participating faculty members tens ofthousands (and in some cases hundreds of thousands) of dollars in retirement benefits. Facultyin the UFF-FSU poll cited this as devastating to morale, and some commented that this waseffectively the last straw, prompting them to begin looking elsewhere for employment. (Otherfaculty saw 3% subtracted from their Florida Retirement System (FRS) defined-benefit plan theprevious year and have reacted in similar ways.)5
will begin to address the problems students face when they are looking for courses and workingtoward graduation.But it will not address the problem Florida has with retaining faculty talent. Faculty salarieshave not been competitive for three decades. The debilitating brain drain we now suffer cannotbe fixed without investing in the talent Florida expects to retain and help build a knowledge-based economy. We waste enormous amounts of time and money recruiting talent, only to seethem leave within a few years (the farm team system). The inefficiency and waste in this systemwill remain with us until we decide to retain faculty on a competitive basis.Students, parents, and alumni also want to know their higher education dollars are a goodinvestment, and they want to see the value of the degrees in which they invested continue toappreciate. The state also needs to protect its citizens’ investments in higher education byproviding funding sufficient to make the degree recognized as a meaningful achievement in thefuture.New funding, not just restoration of recent funding cuts, is what it will take to rev up theeconomic engine that Florida hopes will drive the economy. It will take nothing less than this tobe economically competitive on a global scale. Now is the time to invest in Florida’s universitiesand colleges.