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NO.
 As a public university, Florida State must continue to find new and creative
ways to raise the revenues necessary to supplement the higher education funding
shortfall.
Public-private alliances and priva ways to raise the revenues necessary to
supplement the higher education funding shortfall.
Public-private alliances and privatization can work. As long as they comport
with the university's mission of teaching, research and service, these
relationships can produce revenue and reduce costs without jeopardizing quality
higher education.
Florida and other state governments face increasing demands on state
resources. At the same time, the federal government's effort to cut its budget
deficit places additional demands on state government. The funding pressure
trickles down more every year as the 21st Century approaches.
Today, the federal government and American families must work together to
find ways to secure a Social Security system threatened by economic factors and
by changing demographic patterns. As similar threats loom for higher education,
the Florida State Family members need to work together to help maintain the high
level of quality education offered here.
Universities can and should do more by working with the private sector
through alliances in which both can benefit. There is nothing wrong with applying
an entrepreneurial spirit to the operations of a university, and there are many
things right with attempting to operate a university more like a business.
Privatization of some university services, such as the operation of food
services or a bookstore, have already proven more cost-effective and efficient at
Florida State and many other universities. To cite just one factor leading to
cost savings, the companies that operate these services have far better buying
power than universities do.
According to the American School and University's recent 4th Annual
privatization survey, nearly 53 percent of the colleges and universities surveyed
expect an increase in the number of non-educational services they will contract
out to private firms in the next few years. Of the colleges and universities
surveyed, the top services "outsourced" are food services (74%), vending (65%),
bookstore (33%), custodial, academic buildings (30.7%) and laundry (18.8%). The
top five reasons cited for "outsourcing": "Improves operations, saves money,
others can do a better job, saves management time and provides professional
management."
Public-private alliances can help universities cut higher-education costs by
sharing the costs and making maximum use of educational facilities. Alliances can
not only bring revenue to the university but also scholarships, internships and
future employment for students.
The quid pro quo for the private sector can be access to expertise and higher
caliber research facilities that are not only beyond a company's budget but also
surpass its long term needs.
Public-private alliances are not far removed from small business-incubator
programs, under which emerging businesses often pay low rent and receive free
expert advice. Such programs, operated both in and outside universities, have led
to many success stories.
In Colorado, for example, incubator businesses have run the gamut of success
in antifraud software for cellular phones to lead-acid batteries for power tools
-- from a high-tech sleuthing tool that verifies signatures to a buyers' club for
aviation parts.
Privatization and alliances between the university and the private sector
should be pursued. They can relieve some pressure on the state budget.
However, this effort should not infringe upon our continued campaign to
deliver a reminder to the Florida Legislature as it faces the many demands on the
state budget and sets priorities. That reminder might be best stated through some
paraphrasing and combining of a well-known adage and the words of Chancellor
Charles Reed and others: Education costs money, but then so does ignorance -- we
must ask ourselves whether we want to invest in education or invest in prisons.
Cowart's Response
Frank Murphy's argument tells part of the story. Here are three points in
response:
* Privatization will change the emphasis of the university from the expansion
and transfer of knowledge to cost efficiency and profit.
He says many university services like office supplies, food and copying are
privatized and cost efficient. Of course they are, because they charge high
prices and earn profits, as documented in auxiliary fund cash balances:
In November 1996, university stores (office supplies) had a cash balance of
$747,802, food service $524,656, and copy center and centralized copy program
together, $266,943.
That is not efficiency; that is cost shifting to students and academic units
at a price that yields a tidy profit, and that profit does not support
scholarships or academic units.
* Privatizing goes beyond the academy. For example, firms hire faculty to
develop educational content using new technology for private courses.
This business model approach to higher education creates a competitive
market in direct competition to FSU. How will this affect the unencumbered search
for knowledge?
*Finally, privatizing higher education increases the burden on the public.
How much can Americans be expected to pay? There are now proposals to
encourage citizens to pay for their education, create medical savings accounts
and save for their pensions.
If we require each citizen to pay for all services, we will soon be a country
with two sharply defined classes: the few who become educated, receive medical
care and have income security in their old age, and the many who cannot.
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