Remarks by James H. McCormick to the Senate Higher Education Budget Division

Tuesday, March 9, 12:30 p.m.

Thank you, Chair Pappas and committee members, for the opportunity to be heard on this bill. For the record, my name is James McCormick, and I serve as chancellor of the Minnesota State Colleges and Universities System.

First, I want to make it clear that I respect your job as legislators to make the ultimate decision on how Minnesota's public higher education system is organized. It is my responsibility to advise you on how we can be best organized to deliver quality education at an affordable price.

I oppose this bill because it will disrupt an excellent system of public higher education, one that has become a national model. The days when the Minnesota State Colleges and Universities System could be considered an experiment have passed.

I am here to tell you that the system has come into its own. It is a dynamic organization - a powerhouse for the state of Minnesota. We are truly integrating educational opportunities and services on behalf of the citizens of Minnesota.

You have designed a system that is working exceptionally well. Its current and past governing boards all have contributed to building a sound foundation and a stable academic enterprise for Minnesota.

We believe this bill will lessen accountability, result in inefficiency, waste taxpayer dollars, and hurt our students.

You have given our Board of Trustees the responsibility of leading the system, and you expect them to make tough decisions about managing the system and dealing with economic downturns.

These Minnesota leaders are focused on public stewardship, and they have been doing an excellent job.

You rely on the board to review and set bonding priorities. You rely on the board to establish budgets and tuitions. You rely on the board to pursue efficient administration and alignments.

Let me give you an example of a tough decision. In northwestern Minnesota in 2002, we realigned the five campuses that made up Northwest Technical College. The college had been through several previous realignments, and I can understand how some of those campuses might have wanted to separate from the system at some point. I consulted with Senator Skoe - then Representative Skoe - and Senator Larson, Senator Stumpf and Senator Langseth about reorganizing the college. Senator Larson, I think we have done a good job. We combined the five campuses with other institutions, eliminated one presidential administration and saved about $700,000 in one year.

Some people may not like the tough decisions the board has made, and would view this bill as a way to have their own board, their own policies, their own tuition rates, their own computer systems, and their own authority to create programs without any statewide oversight. They may want it their own way, but it would not be the right way for Minnesota.

I urge the committee to think hard about how this bill would change your role. Here are several examples of questions that come to my mind:

• How many competing budget requests would this committee have to sort through?
• How many competing bonding projects?
• How would you ensure that reports to the Legislature from these newly independent public institutions would be consistent with the rest of public higher education?
• Who would fund the increased expenses of campuses that decided to opt out of the system? They likely would have to create new systems to do things that are now done centrally - keeping student records accurate and up to date, financial accounting, facilities planning.
• What about program coordination and duplication? Right now, if two institutions want to start the same program, we look into it and work that out. I see nothing in this bill that would ensure that kind of coordination.
• What would happen with transfer of credits between institutions?
• Let me tell you about what we've been able to accomplish over the past eight years because we are a group of institutions that work together for our students and the citizens of Minnesota:
• Demand is at an all-time high - we serve 5,500 more students this year than last fall, a 3.3 percent increase in students taking credit-based courses. We serve about 240,000 students in credit-based courses per year and another 130,000 in noncredit courses - 370,000 students in all. We educate 67 percent of Minnesota's undergraduates - a vote of confidence from the people of Minnesota in the quality of their higher education system.
• Because of the way we are organized, we have made much progress in making it easier for students to transfer from one institution to another within our system. It would be a shame to go backward and lose the gains we have made.
• Because of the way we are organized, we have been able to save taxpayer dollars by providing services centrally that would be expensive to duplicate on every campus. An example is the student records system, where we are able to collect student data centrally so that each campus doesn't have to build its own expensive computer system. The same is true of services such as finance and facilities management. For example, we have eliminated more than 15 separate systems for payroll and accounting, human resources and financial reporting and now are operating on one system.
• Because of the way we are organized, we've been able to streamline. Before 1995, we had 45 presidents; today, we have 32. We have done this through consolidations and reorganization.
• Because of the way we are organized, the system has been able to streamline overall employment. At the same time that enrollment has been growing, system employment has been declining. In one year alone, from 2002 to 2003, the number of employees systemwide was reduced by about 700, from about 17,200 to 16,500.
• Because of sound financial practices, the system has received unqualified opinions from Deloitte and Touche, meaning our financial records are clean and exemplary.
• Because of the way we are organized, we have been able to develop new initiatives more quickly and efficiently than individual institutions would be able to on their own. An example is online learning; in the past four years we have rapidly expanded course offerings. Now, we have more than 1,000 courses and about 70 programs that are completely or predominantly online. In 2003, nearly 17,000 students took courses online.
  

  This coordinated effort of online offerings allowed 11 of the Minnesota State Colleges and Universities to be responsive to our National Guard soldiers in Bosnia, Kosovo and nearby countries and allows them to continue their education while serving the state and the nation.

  Thank you so much for your time. I wanted to come here to personally testify, because with the support of our elected officials, we have been able to do so much good for our students and communities. As a system, we can do more together than any of us could do alone. In my opinion, the Minnesota State Colleges and Universities System is properly aligned to meet the needs of the fast-changing 21st century.