Wednesday, July 28

Kansas universities should become efficient


From Kansas Policy Institute

Kansas Universities Should Find Efficiencies instead of Burdening Students with Price Hikes, Program Cuts, or Service Stoppages

By Patrick Parkes

Kansas  legislators’ decision  to reduce state spending on public higher education, which amounts to a paltry 0.7% annual reduction in General Use operating resources, will take place over the next two years. Unfortunately, the university administrators’ narrative on this subject has centered on the potential tuition hikes, program closures, and service stoppages to which their universities may resort. Given the mounting debts Kansas’ university students continue to face in financing their higher education programs, it is imperative that students do not suffer the potential hardships mentioned above when universities have other options at their disposal. Our April 2013 study of state aid in higher education identified five cost-saving measures Kansas’ public universities could employ in order to operate more efficiently while shielding their students from the potential impacts of the aforementioned reductions in state aid. These recommendations suggested that the universities:

1). Tap into their cash reserve surpluses to cover potential cost shortfalls.

2). Pursue deregulation of earmarked “restricted use funds” to create the financial flexibility they need to meet their most pressing cost obligations.

3). Free themselves up to focus on their core academic missions by outsourcing non-academic services (e.g. dining services, landscaping, campus bookstores, etc.) to private contractors.

4). Designate a portion of athletic profits, research project royalties, and other non-academic revenues to fund academic programs.

5). Revisit the state’s Legislative Post Audit Efficiency Study from 2009 to identify additional opportunities for cost savings.

In addition to the five recommendations above, our study also pointed out that vaguely defined “institutional support costs” at Kansas’ public universities had risen to more than three times the rate of inflation from 2002-2012. This escalating cost trend was most recently the subject of an August 2013 article from KansasWatchdog.Org, which defined institutional support costs as [costs encompassing] “general administrative services costs, legal and financial operations costs, personnel record keeping costs, logistical services costs, and other miscellaneous costs.” The additional exposure of this alarming trend is encouraging. At the very least, the trend deserves further examination going forward as yet another opportunity for cost savings. Overall, well-planned and well-executed cost savings will ensure that Kansas students receive a high-quality education that is decoupled from artificially high tuition rates. Furthermore, such cost savings will also help ensure that taxpayer dollars in Kansas are used in the most efficient way possible with regard to public higher education.