Merger musings III

We have learned a number of things since news broke that Rep. Leon Stavrinakis and Rep. Jim Merrill filed a bill that would merge the College of Charleston and the Medical University. We have learned that few within the two institutions want them combined; only politicians seem to like the idea. We have learned that the bill has interfered with two presidential searches. We have learned that Tom Stephenson, chairman of the MUSC board of trustees may or may not have asked Stavrinakis to draft the bill but now opposes the idea of consolidation, and that the College of Charleston’s outgoing president, George Benson, has been a vocal proponent of the “Charleston University Act.” And we have learned that the bill’s drafters think that legislation is the best way to encourage debate over the issue.

We have also learned that these politicians, along with others, including Rep. Bobby Harrell and Mayor Joe Riley say they support a merger for economic reasons. “The simple truth is that we are far behind with providing the necessary employee pool that is currently needed—much less what will soon be required,” wrote Merrill and Stavrinakis in Monday’s Post and Courier. “Approving incentives to lure companies like Boeing and facilitating the expansion of an Information Technology (IT) in the Lowcountry are huge achievements. The next step, however, is making sure local higher ed institutions can produce a workforce capable of filling those jobs.”

Later in their op-ed, the two legislators insist that they admire each institution and continue to support their respective missions. “To be clear, we are not looking to eliminate, undermine or diminish the College of Charleston name or its nationally prominent liberal arts program,” they wrote. “Similarly, we are not looking to eliminate, undermine or diminish the nationally acclaimed research, teaching and treatment that occurs daily at MUSC; nor the acclaimed brands that are the College of Charleston, MUSC or MUSC Health.”

These comments betray a serious misunderstanding of what a liberal arts college is meant to be, and what a medical research university is meant to be. What they are most certainly not meant to be are “brands.” Neither the College nor MUSC is anything like PepsiCo or Starbucks or American Express. Now those are brands. The two schools, instead, are schools. One of them is designed to offer undergraduates and a few graduate students a wide range of studies in order to prepare them to think critically about the world and become educated and valuable citizens. The College is not meant to produce a workforce. For that, go with Obi-Wan Kenobi to the oceanic exo-planet Kamino.

Similarly, MUSC is designed to train the next generation of doctors, nurses and medical researchers. The school’s purpose surely is not to train workers for a hypothetical future biotech industry centered in Charleston. Should that imagined scenario come to pass, great. I’m sure the Medical University can make logical adjustments to its curriculum, as required.

Don’t get me wrong: I think it’s important to prepare students for a changing business environment, just as I think it’s important to prepare them for a career in the sciences or the arts or politics. Surely both the College and MUSC could benefit from certain improvements, including more and better collaboration. It is even possible that a merger would make sense at some point, but only once many large questions are answered and some formal assessment is completed.
Stavrinakis and Merrill insist a comprehensive research institution in the Lowcountry is necessary, and they name four ways to achieve it: create a new university from scratch, transform the College into a research university, expanding the academic reach of MUSC or combining the two schools. Only the last option is practical, they argue. Creating a new research institution by expanding the College would meet with resistance from existing research institutions in the state, such as Clemson and the University of South Carolina, they write. “Politicians fear that too much emphasis, funding and power would consolidate in this region, and the existing research universities would oppose the creation of a fourth entity that competes for limited resources.” But what makes them think that existing universities would not oppose the formation of a Lowcountry research school through merger?

There is another option that is little discussed in the midst of all the excitement over the prospect of establishing a Charleston University: privatization. The College of Charleston could become an independent private school. That status would liberate it from state politics and grant it flexibility to change, expand and improve on its own terms. It could bolster its liberal arts mission, add degree programs, strengthen its faculty and distinguish itself among similar institutions in the region. Money is an obstacle, of course, but not for the reasons you may suppose.

The College receives less than 10 percent of its budget from the state, $19 million for fiscal year 2013-14. That’s down from $33 million in 2008-09. The state has cut funding per student by nearly 40 percent, or $3,400, since 2008. To compensate, public universities in South Carolina have raised tuition 16 percent, or an average of nearly $1,500 since 2008. Tuition represents an ever-increasing portion of total income, threatening to shut out talented students who can’t afford the price tag and don’t qualify for financial aid. For all intents and purposes, the College already is mostly private. And considering how college presidents these days are supposed to be expert fundraisers, and how schools strive to fund endowments and woo important benefactors and strategic partners, it stands to reason that the College of Charleston could find a way to replace what little state money it gets with private donations and other contributions.

The problem really is not compensating for lost state money. The big challenge is related to property holdings. Indeed, the only good reason the College has for remaining a state school has to do with property-related financial advantages. Technically, the state owns a stake of the campus buildings and can help leverage favorable bank loans, municipal bond sales and tax income. The state offers good collateral against catastrophic damage and assists when the physical plant needs (or is thought to need) upgrading. The economics of the College’s property holdings has long prevented it from breaking free of its political ties, even if the state also throws up bureaucratic obstacles, inhibits progress, enforces rules and otherwise interferes in the workings of an institution that no longer depends on the taxpayer for any significant operational funding.

The question, then, is how to manage the property and related financial burden that autonomy would impose on the College. The first step would be to place a moratorium on all unfunded building projects, and to make it clear to stakeholders that any new construction would require a capital campaign. Existing obligations would have to be assessed and adjustments made. And money would need to be raised and secured in a buildings fund, money that would cover the “purchase” cost, renovations and upgrades, emergency repairs, property taxes and more. The overall cost of building maintenance would likely increase because the College would be operating as a distinct institution subject to private-sector economic forces, including higher interest rates and fewer income-generating options. This is no small matter, but neither is it so large that solutions cannot present themselves.

It is time for the College of Charleston to take action in ways that set the stage for independence and empower it to meet the true needs of our changing economic landscape. For the new American economy demands much more than ready workers; it requires educated graduates with the critical skills to shape the future.