Higher Education: The Commonwealth, Colleges Stand at a Crossroads . . .

Having had the honor to serve on the State Council for Higher Education of Virginia (SCHEV) for the past four years, and having completed a two-year term as its chair, it is abundantly clear to me that the commonwealth stands at a critical, if not historic, crossroads as a partner with our public institutions of higher learning.

The diverse offerings of outstanding colleges and universities in Virginia are the envy of any state and are reflected by our consistently high rankings in such closely followed publications as the U.S. News & World Report. It is revealing that a top official at Rolls-Royce stated that it wasn't the incentive package that caused that world-class company to select Virginia over a number of other states as its North American location to build an advanced manufacturing center; it was our flagship universities in Charlottesville and Blacksburg and our community colleges that sealed the deal.

Indeed, two of the Virginia public higher education system's most important strategic assets are frequently on full display in the discussions with business prospects. First, the state's community college system repeatedly demonstrates its ability to provide our citizens with the skills they need to be successful. Companies expand or come to Virginia because they know that the education and training that our community college students receive will translate directly into employable work skills the company can use.

Second, the research capabilities at the University of Virginia and Virginia Tech can be integral to businesses' decision to locate in Virginia. This kind of public-private partnership not only facilitates research and development programs for sponsoring companies, but also provides outstanding educational opportunities for graduate and undergraduate students alike.

We are at a real crossroads in the state's continued ability to retain and attract the kind of businesses that bring prosperity to our people and to meet the educational demands of a growing and more diverse population. Whether we are able to meet these challenges should be of concern to every elected official and every Virginian.

As I find myself at this crossroads, reflecting on our past successes and looking to the challenges ahead, two issues that the State Council continues to grapple with stand out: promoting affordability and access; and restoring value.

Over time, the state has been increasingly unable to fund public higher education sufficiently. Competition for state dollars for public safety, K-12 public education, formula-driven mandates for social services, transportation, and other needs all put intense pressure on higher-ed funding.

This underfunding has resulted in rising tuition rates. Taking 2001-02 as a baseline year, the annual increase in tuition and mandatory fees for in-state undergraduate students for 2002-03 through 2008-09 averaged 11.74 percent; and, the increase was no smaller than 6.3 percent in any of those years. Such rates cannot be sustained if the commonwealth is to keep its public system of higher education accessible to and affordable for its citizens.

This past year, federal economic stimulus funds helped hold fiscal year 2010 tuition-rate increases to an average of 5.1 percent. These funds should also mitigate tuition increases in FY2011. However, as we recover from this deep recession and as competition for state dollars continues, how will our elected officials respond? What will be the state's priorities? Will they hear from a citizenry willing to make the kind of investments in higher education that will meet the needs of the next generation?

Given these past funding/tuition trends and looming future budgetary exigencies, the 2010 legislative agenda should include the development of a plan to secure sufficient public higher education base funding to ensure affordability and access in FY2012 and beyond.

At the same time, when the commonwealth renews its commitment to higher education it will also be making a significant commitment to economic development in our state. A study recently performed by the Weldon Cooper Center for Public Service at the University of Virginia quantified the economic impact of Virginia's public higher education system. That economic impact is enormous. The study was commissioned by the Virginia Business Higher Education Council which has launched a campaign called "Grow By Degrees" to promote Virginia's long-term competitiveness and sustained economic growth through high-impact investments and innovation in higher education.

In fact, perhaps the study's most important finding is that the tax revenue produced by the state's public higher education system actually exceeds the amount the state spends on the system. The study demonstrates that for every dollar the state spends on public higher education, it receives $1.39 in state tax revenue.

So, it makes good sense to invest in higher education. More than ever before, we must provide educational opportunities for our people in order to compete in a global economy. Those opportunities will be stifled if our leaders look only to continued increases in tuition; rather, we must find the public resources and set the priorities so that higher education is more attainable by our growing population. In doing so, Virginia will remain the envy of most states, our economic base will expand, a greater number of Virginians will live more prosperously and the commonwealth will more than recoup its investments.

Whitt Clement, a partner at Hunton & Williams, has served on SCHEV for four years, the past two as its chair. Contact him at .