Office of the Vice President for Global Communications

Tuesday, September 8, 2009

Record Update Exclusive

Coleman, Wilbanks: No plan to privatize U-M

A recent article in Time magazine claiming that U-M is among several public universities considering privatization in the face of budget pressures is incorrect, university leaders say. In fact, President Mary Sue Coleman sent the magazine’s editorial staff a response indicating that the article not only is wrong in its statement about privatization but also in its portrayal of the university’s budget situation.

“Amy Sullivan’s piece suggesting that the University of Michigan is being forced to privatize (April 23) came as quite a surprise to me as President. No such discussions are under way, nor are they being considered,” Coleman wrote to Time.

“Due to careful management, we are in better financial shape than many of our peers, both public and private. It is true that we have worked to boost revenues from other sources as the state’s financial support has declined, but what defines a public institution goes far beyond its funding sources.

“U-M has an ingrained culture of serving the state and the nation through excellence in education and research, nurtured over nearly 200 years of history. It is our birthright, and one we treasure.”

The Time article and one that followed in the Chronicle of Higher Education appear to have taken their cues from a preliminary report of a nine-member Commission on Government Efficiency issued in October, says Vice President for Government Relations Cynthia Wilbanks.

The commission, charged by the Legislature with identifying ways to make state government more efficient issued a preliminary list of ways the state could shave costs in corrections, state personnel, community health/Medicaid, and K-12 and higher education. The list of possible higher education cuts included eliminating Michigan Promise Grants, consolidating universities in a particular region and privatizing U-M.

“There has been no serious discussion around privatizing the university. As I have said before, it is a provocative idea but not very realistic,” Wilbanks says. “Further, it would take more than a recommendation from the commission. There would have to be legislative and citizen involvement in a decision like this that involves a constitutional change.” Wilbanks expects such a proposal would meet considerable resistance from a public that has a great deal of pride in one of the state’s flagship universities.

Wilbanks stresses that the commission was asked to look at all areas of government and leave no stone unturned in identifying potential cuts, but that the report is by no means final.

“For the last seven years, as state support has been reduced, higher education has been at the forefront of identifying more efficiencies,” Wilbanks says.

Coleman and Provost Teresa Sullivan have met with a number of campus groups recently to explain the university’s budget and highlight efforts over the past several years to cut costs in the face of reduced state support.

Sullivan has reported on numerous steps the administration has taken that have allowed U-M to trim $135 million in spending from the general fund budget and to increase revenue from gifts and other sources.

Today, Coleman sent all members of the community an e-mail saying U-M is not immune from the economic downturn and is making adjustments to its budget in response, but is not resorting to some of the harsher steps peer institutions have had to face.

Read the letter

More stories on the topic:

Leaders explain budget process

Coleman discusses financial outlook during 'fireside chat'