UNIVERSITY EFFICIENCY

Unlike Gov. Arnold Schwarzenegger, who proposes to cut nearly $400 million from the California State University System’s budget, Maine’s chief executive has spared the state’s higher education institutions from his budget-cutting plans. Instead, Gov. John Baldacci has asked the colleges and universities to look for cost savings and use that money to minimize tuition increases and boost scholarships.

The University of Maine System responded by launching an “Agenda for Action,” a five-point plan that includes financial stability, environmental leadership and student success. The system also will join with the Maine Community College System and Maine Maritime Academy to look for areas of greater cooperation, such as joint purchasing.

This is all helpful, but the university system can do much more to meet the governor’s challenge, and to answer persistent complaints that it is not as frugal as possible, through an independent audit that would assess campus costs against their missions and comparable institutions.

Chancellor Richard Pattenaude has launched what he is calling “Operational Audit II” to look for additional cost savings at the system’s seven campuses and central office. His goal of $3.6 million in administrative savings over three years is too modest for a system with an operating budget of nearly $500 million a year.

Former Chancellor Terrence MacTaggart cut more than 10 percent, or nearly $3 million, just from the central office, which had been allowed to grow under his predecessor. A meaningful audit of the campuses would aim to shave the same percentage, which happens to be the same percentage Gov. Schwarzenegger aims to cut costs across the board in California, which is facing a $14 billion shortfall.

As Chancellor Pattenaude launches his review, he is right to focus on what percentage of campus expenses go toward instruction and research and to emphasize that cost savings should move Maine’s universities toward national norms. As for national norms, Maine’s public four-year tuition for in-state students is about $1,000 above the national average, according to the College Board. Incomes, however, are below the national average.

This is why the governor is right to push for cost savings but focus on minimizing tuition increases and increasing financial aid in an effort to ensure cost is not a barrier to Maine students going to and completing college. Maine also lags in state support for higher education. But with a chronic state budget shortfall, more money for higher education is not likely. Instead, the university system must reallocate its own resources. Analyses that show the university system spends more on administration than the national average highlight the need for a closer look here and elsewhere.

The university system faces other financial challenges – a large unfunded retirement liability that it must pay down and rising health insurance costs for its employees. These challenges are further reason for conducting an audit, not a rationale for postponing such work.

It can either do the work, or Maine can bring in the “Governator” to do it.