Pruning the Deadwood

One of my higher-ed bugaboos is that Virginia’s public colleges and universities continually create new programs, but they rarely prune obsolete or unpopular programs. The relentless accumulation of academic superstructure makes it difficult to control costs, and, I have conjectured, has contributed to the steady inflation of tuition.

But let it not be said that Virginia institutions never trim their programs. According to documents presented to the State Council of Higher Education for Virginia (SCHEV), the higher ed system has announced this month the shedding of two:

  • Norfolk State University is discontinuing its Bachelor of Arts journalism program, originally established in 1974.
  • Radford University is discontinuing its post-baccalaureate certification program in professional educational-leadership development.

Successful enterprises continually review their product lines and business lines, sell or liquidate under-performers, and reinvest the capital in more promising ventures. The idea is to redeploy capital to its highest and best use — a a discipline that colleges and universities should pursue more vigorously.

How Big Is UVa’s Diversity Bureaucracy?

Marcus Martin, chief diversity officer at UVa

The University of Virginia is paying its Chief Officer for Diversity and Equity, Marcus Martin, $349,000 a year — the highest salary of any of 50 higher-education diversity officer identified by Campus Reform, a project of the conservative, non-profit Leadership Institute.

How much money are public universities devoting to their diversity bureaucracies, Campus Reform asks, and could that money provide a greater benefit to minority students in the form of financial aid?

While Michael Poliakoff, president of the American Council of Trustees and Alumni (ACTA), acknowledged to Campus Reform that “colleges today are educating a much broader range of students,” he suggested that “it is certainly worth asking whether runaway expenditures on inclusion and diversity staff are actually helping to create a campus where students of different backgrounds share their experiences and views.”

“Too many institutions spend lavishly on teams of highly-compensated and narrowly-focused administrative specialists,” he added, noting that the University of California at Berkeley “spends $18 million annually on a staff of 150 in its Office of Inclusion and Equity.”

“Let’s turn these funds instead to bringing more deserving students from underserved backgrounds to Berkeley,” Poliakoff continued. “It is crucial for boards and leaders to ask whether spending on new administrative salaries will serve the genuine needs of students or just fulfill the wishes of certain administrators.”

So, how big is UVa’s diversity bureaucracy? It’s difficult to say from a perusal of the website. Unlike academic departments, which typically list all professors, instructors and staff on the Web, the Office of Diversity and Equity does not. But we can glean some details.

UVa’s Office of Diversity and Equity (ODE) describes its mission this way:

[The Office] assists and monitors all units of the University in their efforts to recruit and retain faculty, staff, and students from historically underrepresented groups and to provide affirmative and supportive environments for work and life at the University of Virginia.

[It] provides leadership, information, consultation, coordination, and assistance to the various units and constituencies within the University of Virginia in an effort to embrace diversity and equity as pillars of excellence, synergize actions at all levels of the institution, and cultivate inclusiveness and mutual respect throughout the community.

While the ODE does not list its employees, it does link to various committees including the Diversity Council, which pulls in 38 committee members from around the university; the Disability Advocacy and Action Committee, which lists a chairperson and staff member; the LGBT Committee, which also has a chair person and staff member; the Women’s Leadership Council, which consists of 15 committee members; and the President’s Commission on Slavery and the University.

Individual schools at UVa also maintain their own mini-diversity bureaucracies. For example, the McIntire School of Commerce has an Office of Diversity, Equity & Inclusion. The Engineering school has a Center for Diversity in Engineering. The law school and Darden school of business also cite extensive activities and partnerships relating to diversity.

Last but not least, the University also has something called the Idea Fund, which enjoys a “close relationship” with the Office for Diversity and Equity, and is staffed by that office. The Idea Fund lists the following:

  • Marcus Martin, M.D. – Vice President and Chief Officer for Diversity and Equity
  • Meghan Saunders Faulkner – Assistant to the Vice President and Chief Officer for Diversity and Equity for Programs and Projects
  • Jessica McCauley – Virginia-North Carolina Alliance Program Coordinator
  • Kristin L. Morgan – Director, University & Community Relations and Development
  • Gail Prince-Davis – Administrative Assistant to the Vice President
  • Debra White – Director of Business Operations and Grants Management

Here’s what the Idea Fund does:

IDEA Fund Trustees generally advocate for the promotion of the Fund’s values within the University. Through meetings and communications with alumni, administrators, staff, students, community members and faculty, IDEA Fund Trustees are committed to staying abreast of, collaborating on, and sponsoring events, programs, committees, symposia and appointments that serve its values. Examples of this are collaborations on past annual MLK celebration events, sponsorships of symposia, statements of support and concern to University leadership on topics that are relevant to the Fund’s mission, and providing mentoring support to minority/underrepresented students, faculty, and staff at the University through focused alumni networking and contacts.

Whatever else these people do, it’s evident that they hold a lot of meetings and participate in a lot of events, programs and symposia. Whether all this activity adds up to substantive support for minority students or mainly constitutes a lot of ivory tower navel-gazing is less clear.

So, how effective is the Office of Diversity and Equity? Take a look at the Office’s Diversity Dashboard, and you’ll find that UVa, despite its commitment to ethnic diversity, isn’t very diverse. Here’s the breakdown of undergraduate students:

That’s the flattering graph. The stats for faculty, graduate students, and staff show even less diversity — although the university is making an effort to change that. Thirty-one percent of the Tenure Track & Tenured professors hired in 2015-16 were non-white.

The underlying assumption of all this bureaucratic activity is that ethnic minorities need more than financial aid to attend UVa. They need the ministrations of a small army of diversity administrators. That’s a convenient assumption for university administrators to have. Perhaps someone should ask minority students which they would prefer: more diversity administrators or more financial aid?

Hat tip: Elena Siddall

Another Useless, Irrelevant Debate

Sterile

Ed Gillespie, Republican candidate for governor, has gotten himself in a political pickle. According to press reports, he has been blasting his Democratic rival Ralph Northam for backing the 2013 transportation tax package as “the largest tax increase in Virginia history.” But as Democrats have been pointing out, Gillespie was gubernatorial campaign chairman for Bob McDonnell, who pushed the bill through the General Assembly with significant Republican support.

The criticisms don’t address the substance of what Gillespie is saying — Northam did back the biggest tax increase in Virginia history. But the pushback raises an obvious question: What would Gillespie have done differently? How would he have proposed to fund Virginia’s pressing transportation needs?

Frankly, both Republicans and Democrats are incoherent on the subject of transportation funding. Both sides base their arguments on three untenable propositions: (1) that building more roads or commuter rail will solve our transportation problems, if only we build enough of the right thing; (2) that someone else should pay; and (3) that current transportation solutions will be relevant in the rapidly approaching era of driverless cars, transportation as a service and Uberization of transportation.

Let’s address these issues point by point.

Building more roads and commuter rail will not address transportation congestion unless local governments allow developers to transform what we commonly call “suburban sprawl” into traffic-eating walkable urbanism. Pedestrian-friendly, mixed-used development built at moderate densities substitutes foot travel for car trips, substitutes short car trips for longer trips, and makes mass transit a attractive to more riders.

While this market-driven transformation is taking place in fits and starts — mainly in Virginia’s urban-core jurisdictions and around Washington Metro stops — it is not taking place nearly fast enough. There will never be enough money to provide congestion-free transportation for sprawling, low-density land use patterns.

The second problem is that everyone wants a better transportation system, but no one wants to pay for it themselves. Having long ago abandoned the idea of a user-pays system, Virginia politicians excel at singling out others to pay. The result is an absurd system in which there is no connection between those who use transportation infrastructure (roads and rail alike), and those who pay for it. Thus, 85-year-old, blue-haired ladies who drive 2,000 miles a year pay sales taxes to subsidize road warriors who drive 20,000 miles, Dulles Toll Road users pay inflated tolls so Silver Line riders can enjoy below-cost fares, and everyone subsidizes tractor-trailers whose taxes don’t come close to covering the wear and tear they cause on roads. The perverse result: When people don’t pay the full cost of their travel decisions, they travel more.

The third problem, approaching insanity, is that Virginia continues to build roads and rail on the assumption that driving and commuting patterns will be the same in 20 years as they are today. But that is a manifestly idiotic assumption. The advent of driverless cars will drive down the cost of taxi-like, bus-like and jitney-like transportation services, making shared ridership services a more attractive option. The rise of subscription-based transportation-as-a-service enterprises will provide an alternative to individual automobile ownership. There is no way to forecast with any certainty how these innovations will affect driving habits and the need to build more highways and commuter rail.

The debates that politicians should be having, but aren’t, are these:

  1. How can we relax zoning codes to encourage land use patterns that put less strain on the transportation system?
  2. How can we reform transportation funding to support a user-pays transportation system?
  3. How should Virginia position itself to take maximum advantage of the fast-approaching driverless/electric/transportation-as-a-service revolution?

None of these conversations are occurring. Ed Gillespie isn’t talking about them — but neither are his critics. The debate is more sterile than a mule with a vasectomy. Virginians should demand better.

Everything Is Better with Bacon

Ambrosia of the gods.

Quick, load up on bacon while you can! The national craving for bacon is pushing U.S. pork belly prices to record highs, reports the Wall Street Journal. Americans purchased 14% more bacon at stores in 2016 than the previous year, and stocks of bacon in commercial freezers have begun running low. Farmers increased the size of the national hog herd by 3% last year, but not fast enough to keep up with demand for the yummiest food ever created.

More Choices this Election — in a Two-Party Duopoly Kind of Way


Fired up by Donald Trump, Virginia Democrats aren’t just proclaiming themselves the “Resistance,” they are running one of the biggest slates of House of Delegates candidates of recent years.

The graphic above, taken from the Virginia Public Access Project, indicates that two-thirds of the House seats are being contested by either a major party candidate or “other” candidates (independents and Libertarians, for the most part).

What’s not clear from this snapshot is how many of these races are truly competitive. All “other” candidates are a long shots, and even some of the major-party nominees  in gerrymandered districts are running kamikaze missions.

I’m heartened to see the heightened interest in state-level politics, but I’m concerned by the dearth of outsiders running for office. In this time of dissatisfaction and unrest, the two-party duopoly still has a stranglehold over the political process. Nothing much will change in an election that whittles down the Republican majority in the House by five or six seats. But just imagine the new political dynamic if five or six independents (preferably of a libertarian persuasion) won election.

Virginia’s political system is poised for an upheaval. As it stands, Virginians have a choice between economically liberal, socially liberal Democrats and economically conservative and socially conservative Republicans. Yet a majority of the electorate, I would argue, is libertarian — economically conservative and socially liberal. (That’s an oversimplification, but it holds true as a generality.)

Bottom line: It’s a good thing that Virginians will have more choices at the ballot box this year. But the range of choices is limited. Political competition is not nearly as robust as it needs to be.

Building a Better Business Climate

Governor Terry McAuliffe wasn’t the only one to welcome Virginia’s No. 7 status in CNBC’s 2017 “Best States for Business” ranking.

“Good news? Of course it is!” wrote Chris Saxman,  executive director of Virginia FREE in an email blast yesterday. “Better is better and moving back into the Top Ten is important for a number of reasons especially since Virginia’s rankings have fallen recently. “

But there was cause for concern, Saxman warned. Virginia’s ranking for the “cost of doing business” category was a crummy 35th.

“Virginia FREE has pointed this glaring problem out in previous commentaries. We also have urged legislators and candidates talk with local business owners in their districts to discover what drives business costs and how state government can mitigate those costs,” he wrote.

Legislators need to work with policy experts in chambers of commerce “to see all sides of the policy changes that are necessary,” Saxman urged. Tackling undue regulatory burdens would help address the poor Cost of Doing Business, he suggested. “However,” he added, “Virginia should get these reforms done correctly and that takes time.”

That’s a key point I made in my previous post about the best-state-for-business ranking. Improving the business climate takes time. It takes dozens of incremental, often obscure reforms. And it takes more than the superman exertions of a single governor. Ideally, if the reforms are to last, they should arise from bipartisan consensus. In an era of polarized politics, consensus may be harder to achieve than ever — but it’s more necessary than ever.

Taking a Peek Behind the CNBC Best-State-for-Business Ranking

Click for more legible image.

Governor Terry McAuliffe said yesterday that he was “thrilled” Virginia had moved up six spots to 7th place in CNBC’s Best States for Business 2017 rankings — and when McAuliffe says he’s thrilled, you can take that to the bank. Whatever else you think about the job he’s done as governor, there is no denying his ardor for his job as Virginia’s chief economic-development salesman and his enthusiasm for every Virginia accomplishment large and small.

In a prepared statement issued yesterday, McAuliffe put his spin on what the news said about his leadership as governor.

“The effects from federal sequestration in 2013 did substantial damage to our economy. When I took office, we came in with a clear and simple plan to diversify our industries and make Virginia less dependent on the whims of Washington. Thanks to significant reforms and historic investments in our education system, innovative workforce development strategies and the record-breaking recruitment of new business capital and jobs, we are mitigating the damage of federal dysfunction and building an economy that works better for everyone.”

McAuliffe isn’t doing anything that any other governor wouldn’t do — taking credit for good news — but the public should take assertions like this with a grain of salt. Dramatic rises and falls in CNBC’s rankings could reflect changes in the economy and CNBC’s scoring methodology as much as anything that McAuliffe (or his peers and predecessors) did.

Take a look at the chart above, which breaks down CNBC’s overall score by 10 categories. Virginia performs worse in five categories since McAuliffe took office in 2014: infrastructure, cost of business, technology & innovation, education and business friendliness. Despite what McAuliffe terms the state’s “historic investment in education,” Virginia’s education rank is lower than when he became governor.

McAuliffe can claim credit for improvements in access to capital, cost of living, and quality of life if he wants to, but it strains credulity to suggest that the incremental policy changes he made as governor had much effect on them. 

Virginia’s gain as a best state to do business – from No. 8 to No. 7 — over McAuliffe’s tenure can be attributed mainly to the Old Dominion’s higher rankings for “workforce” and “economy.”

CNBC gives “workforce” the heaviest weight in its ranking — 425 out of 2,200 points, reflecting the increasing emphasis that businesses give the attribute. Fortunately for us, that is Virginia’ top-performing category. The Old Dominion ranked No. 2 in the country this year. As a bonus, the weight that CNBC assigned the category increased from 400 points last year. To some degree, Virginia owes its better best-place-for-business rank to changes in the way the network calculates its scores.

Now, it’s also true that Virginia’s workforce rating improved as well. Here’s what goes into CNBC’s scoring for that category (my emphasis):

We rate states based on the education level of their workforce, the numbers of available employees and the states’ demonstrated abilities to retain college-educated workers. We consider each state’s concentration of STEM (science, technology, engineering, and math) workers, increasingly in demand by business. We measure workforce productivity based on each state’s economic output per job. We look at the relative success of each state’s worker training programs in placing their participants in jobs. We also consider union membership and the states’ right-to-work laws.

Virginia scores well in the “workforce” ranking in large part because of the state’s ability — or perhaps I should say Northern Virginia’s ability — to recruit educated workers from outside the state. It is true that Virginia’s higher-ed system is producing more STEM degrees than ever before, but producing STEM degrees is no guarantee of keeping STEM degrees in the state — just ask the state of Michigan. It is also true that McAuliffe signed the Virginia GO workforce legislation, but that program has not been in effect long enough to have a material influence on workforce training programs.

Clearly, Virginia is doing something right when it comes to building a 21st-century workforce, but it’s far from clear that recent actions emanating from Richmond can explain the short-term fluctuations in the CNBC scoring for the workforce indicator.

Virginia’s “economy” rank has improved as well in the past year, accounting for 300 points in CNBC’s 2,200-point ranking. McAuliffe has done an effective job as Virginia super-salesman. And he has worked to diversify Virginia’s economy from its reliance upon federal defense spending, touting everything from drones and cyber-security to Virginia’s ports and renewable energy. But have his actions been so extraordinary as to move the needle on Virginia’s “economy” score?

Here’s how CNBC computes its score for that category:

We look at economic growth, job creation, consumer spending, and the health of the residential real estate market. We measure each state’s fiscal health by looking at its credit ratings and outlook, as well as its overall budget picture. Because of their own economic impact as well as the ripple effect, we consider the number of major corporations headquartered in each state.

Consumer spending and the residential real estate market are not sectors that state policy affects. Overall economic growth is influenced mainly by (a) the level of federal spending and (b) Virginia’s mix of fast- and slow-growth industries. As for the state’s fiscal health, well, the governor shares responsibility for that with the General Assembly.

Bacon’s bottom line: My purpose is not to discredit McAuliffe’s performance as economic-development chieftain, which has been pretty good overall, but to dampen expectations that this governor (or any governor) has much impact on year-to-year changes in Virginia’s business climate. Burnishing a state’s business climate takes a long-term commitment from governors, legislators, business and civic leaders, and local government officials. I’ll have more to say about that in my next post.

What the Numbers Tell Us

How do Virginia’s public higher-ed institutions rate on the goals established in the 2005 Restructuring Act and embedded in state code? The data is incomplete.

This is the fourth of four articles exploring higher-education accountability in Virginia since enactment of the 2005 “Restructuring Higher Education Financial and Administrative Services Act.”

The 2005 Restructuring Act created a new covenant between the Commonwealth of Virginia and its system of higher education. In exchange for greater freedom from state regulation, colleges and universities would be held accountable for achieving 12 core state goals. Those goals are still part of the state code. But over the intervening years, priorities have changed and many benchmarks have been dropped.  The state publishes no comprehensive report card for individual institutions based on achievement of those goals.

Yet the State Council for Higher Education in Virginia (SCHEV) does compile much of the data needed to track progress in achieving the state goals. The numbers can be extracted from a searchable database the council maintains on its website.

In the concluding chapter of this series, Bacon’s Rebellion extracts that information to see how Virginia’s higher-ed system has performed since 2005. The task of extracting the data for each of the state’s public institutions would be too arduous to undertake within a reasonable time frame, so we show data for the system as a whole.

Goal 1: Ensure Access to higher education, including meeting enrollment demand.

Virginia’s system of higher education has expanded significantly since enactment of the 2005 Restructuring Act to accommodate a growing student population. Between 2005 and 2016, total enrollment at public, four-year institutions increased 11%. However, almost all of the increase took place by 2011. Enrollment has leveled off since.

Are Virginia’s public colleges and universities keeping up with demand for higher education? That’s impossible to say. SCHEV has not defined enrollment demand or set any benchmarks.

A related metric is the number of degrees awarded. A stated goal of higher education policy is not simply to increase enrollment, it is to increase the number of Virginians graduating with degrees. Indeed, the 2011 Top Jobs Act, which amended the 2005 Restructuring Act, set an explicit goal of increasing the cumulative number of two-year and four-year degrees awarded by public colleges by 100,000 over 15 years. To award more degrees, colleges must enroll more students and/or increase the retention rate.

As with enrollment, the number of degrees granted each year increased at a robust pace from 2005 to 2011 — and then plateaued. Ironically, that tapering off coincided with the Top Jobs legislation, which was enacted with the goal of boosting enrollment. It is not clear why enrollments have plateaued. One possible explanation is that students signed up during the depths of the recession because so few jobs were available; once economic recovery took root, students returned to the job market. Another is that students began balking at the rising cost of attendance.

The Top Jobs Act put special emphasis on awarding more STEM (science, technology, engineering, math) and health degrees. SCHEV data indicates that the higher-ed system boosted the output of STEM-H degrees by 11.1% between the 2011-12 and 2015-16 school years — double the 5.3% increase for all degrees. STEM degree awards are on an upward trajectory.

Goal 2: Assure affordability, regardless of income.

As discussed in Part III, SCHEV did not develop an overall affordability metric for individual institutions. However, its annual Tuition & Fees report does provide a measure for the higher-ed system as a whole: average undergraduate charges (tuition, fees, room, board) as a percentage of per capita disposable income. After bottoming out at 31.8% in 1999-2000, charges rapidly outpaced Virginia earnings. By the 2016-17 school year, a year’s charges consumed 47.6% of per capita income. Continue reading

What Virginia Needs Is a Good Local-Government Report Card

Speaking of government report cards for states (see previous post), Virginia could use a good system for rating its local governments. As it happens, the Virginia Tea Party Federation is mobilizing to grade Virginia local governments on the basis of 20 to 30 key performance indicators on fiscal health and quality of government services.

The data will be extracted whenever possible from authoritative sources such as local Comprehensive Annual Financial Reports (CAFRs), Mark Dougherty, chairman federation’s Local Government Committee (LGC), said yesterday at the Tuesday Morning Group gathering of conservative and libertarian activists. The LCC hopes to release results in late 2017 after fiscal 201 data becomes available this fall.

The goal is to educate citizens and local government officials and to highlight opportunities to improve governance, Dougherty said. CAFRs run 200 to 300 pages long, and they are difficult for ordinary citizens to plow through. The Tea Party is looking for volunteers willing to compile data for each of Virginia’s 95 counties and 38 cities.

It will be a challenge to create a “fair” rating system, acknowledged Daugherty, who hails from Staunton. Virginia localities vary in size and needs from sparsely populated Highland County, with a $7 million annual budget, to massive Fairfax County with more than a million people and a $7 billion annual budget.

The Tea Party report cards will rate Virginia’s localities on the basis of standard measures and ratios that apply to all, but may adjust for a locality’s unique attributes. Bonus points might be awarded, say, to a county that posts its checkbooks online for public inspection, while penalties might be levied for self-declared sanctuary cities (on the grounds that the presence of illegal aliens runs up local government costs).

As an example of the kind of analysis he hopes citizens will be able to conduct, Daugherty cited Henrico County, where 20 fire-and-rescue stations serve 330,000 residents. Of its 47,000 calls last year, only 825 responded to fires. Clearly, the vast majority were non-fire related. Before Henrico builds another fire station, might it be feasible to have a light fire/rescue vehicle to patrol areas of the county that generate the most calls?

Another example: City of Richmond public schools have between 2,000 and 3,000 students in each of its elementary school grades but only about 1,200 in its high school grades. Are kids dropping out? Are parents keeping their kids in elementary school but then yanking them out of middle school, either to put them in private school or to move out of the county? That would be helpful to know in formulating educational policy. Another question arising from the data is whether the school has adjusted its infrastructure — number and size of public school facilities — to the lower number of high school students.

Daugherty pointed to Goochland County’s “Strategic Plan Report Card,” with five goals and 23 measures, as a potential template for what the Tea Party has in mind. Goochland not only looks at its property tax rate but tracks the ratio of commercial to residential property, new taxable commercial investment, and new taxable investment within its eastern growth management area. The report also measures financial liquidity, the debt-to-expenditure ratio, patrol area covered per deputy, emergency response times, and annual government employee turnover, among other indicators.

We’re No. 18! We’re No. 18!

Virginia has the 18th strongest fiscal condition of the 50 states and Washington, D.C., according to the 2017 edition of the Mercatus Center’s “Ranking of the State by Fiscal Condition.” The ranking is based on 13 measures of fiscal solvency, ranging from cash on hand to unfunded pension liabilities.

The overall ranking integrates measures for five broad categories based on fiscal 2016 data. These include (listed in the order of Virginia’s performance):

Service-level solvency. Virginia scores 4th best in the nation for this set of measures indicating how much “fiscal slack,” or leeway, a state has to raise taxes or increase spending. States with low levels of taxes, revenues, and expenses as a percentage of personal income are ranked the highest. 

Trust fund solvency. Virginia also scores well for this category, 11th, which reflects exposure to pension risks and other post-retirement benefits. 

Long-run solvency. Virginia scores 16th for long-run solvency, a set of measures capturing a state’s ability to meet its long-term liabilities.

Cash solvency. Virginia ranks 27th by this set of measures indicating a state’s ability to meet short-term liabilities.

Budget solvency. Virginia ranks 31st for this composite of two measures indicating whether a state’s revenues match its expenses.

Virginia’s ranking slipped from 15th place the previous year — not a good sign.

But if it’s any consolation, CNBC has just rates Virginia as the 7th best state to do business.