public universities and students in the hope that there
will be a net benefit," he argued, "when most of those
students will leave the state anyway." By reallocating
money away from the University - and into pro-busi-
ness initiatives, such as tax relief - Michigan's Legis-
lature could establish a growth-friendly environment
that could help more than just those with University
Furthermore, privatization could help reverse a slide
in University rankings. In 1987, the Center reports, the
University was ranked eighth overall by U.S. News and
World Report. Yet, by 2003, the University had slipped
to 25th. The Center argues that this decline in quality
- sped, no doubt, by a concerted effort by private uni-
versities to "poach" top professors - could be reversed
While he didn't include the argument in the Center's
policy position, LaFaive also believes that this change
could increase donor contributions to the University.
He suggested that many potential donors choose not to
donate private funds to the University because they feel
they have "donated on April 15." If privatized, the Uni-
versity would not face this problem when fundraising.
An often overlooked benefit of privatization would
be absolute autonomy for the University. Currently,
the University enjoys an enviable amount of autonomy
- the University Board of Regents, and not the state
Legislature, has final say over administrative decisions
at the University. Unfortunately, this autonomy has
limits; while the University can circumvent state laws,
it cannot circumvent the state constitution or indirect
forms of legislative blackmail.
Just two years ago, in response to a controversial
class, "English 319: Male Homosexuality & Initia-
tion," state Rep. Jack Hoogendyk (R-Kalamazoo) pro-
posed a state constitutional amendment that would
functionally strip final authority over curriculum from
the regents and offer it to the state government. While
the proposal failed, it was only the most recent in a
series of attempts to influence the University's curricu-
lum. Indeed, the state House of Representatives barely
defeated proposals, in 2000 and 2003, that would have
cut all state funding for the University if it continued
teaching the course. This politically driven interfer-
ence - the state's branch of the American Family
Association issued a press release "calling on state
lawmakers to pressure university officials to drop the
course altogether" - would no longer be a problem if
the University privatized.
More importantly, the University would not be
bound by 2004's Proposal 2, which decreed "The
union of one man and one woman in marriage shall be
the only agreement recognized as a marriage or simi-
lar union for any purpose." This constitutional change
could, depending on how courts interpret it, ban all
public institutions from offering same-sex partnership
benefits. The University has, many times, defended
its right to offer same-sex partnership benefits on the
grounds of constitutional autonomy. Yet, for all practi-
cal purposes, the future of same-sex benefits - valuable
recruitment and retention tools - is in the hands of the
But perhaps most relevant, considering this school's
history, is next year's Michigan Civil Rights Initiative.
When the University successfully defended its right to
employ affirmative action in front of the U.S. Supreme
Court, anti-affirmative action forces mobilized to
pass MCRI, a constitutional amendment that would
ban public institutions from employing, among other
things, racial preferences. Once again, a private Uni-
versity would not be constrained by this amendment,
and would be free - even if MCRI passed (early polls
indicate it will) - to continue using affirmative action.
Is privatization possible?
f course, unless the University
could actually survive privatiza-
tion, discussion over privatization
would be academic. Fortunately,
the broad consensus is that, if the
University separated from the
state, it could survive.
According to Courant, the University could replace
its state appropriation of roughly $320 million in one
of two ways: a massive increase in the endowment, or a
tripling of in-state undergraduate tuition.
The current University endowment, worth
roughly $4.9 billion, is projected to provide $114 mil-
lion in revenue for the fiscal year 2006 - far short of
$320 million. This income is used throughout the
University to supplement state funding and provide
what University spokeswoman Julie Peterson called
the University's "margin of excellence." However, if
the University were to increase its endowment by $6.4
billion, the endowment would generate an additional
$320 million per year - enough to replace the current
level of state appropriations.
Alternatively, the University could pass the burden
of privatization on to students through higher tuition.
Currently, there are approximately 16,000 in-state
undergraduates who each pay about $9,100 in tuition.
If that rate was roughly tripled to match out-of-state
undergraduate tuition - around $29,000 - the Uni-
versity would earn an additional $320 million a year.
For those who could not afford the increased tuition
rate, increased financial aid could be made available
because the many students who can afford to pay far
more than $9,100 would no longer be receiving an
automatic state subsidy of almost $20,000.
Indeed, the Mackinac Center has argued that
"Tuition hikes could actually help those students who
truly need help - by enabling the school to offer great-
er outright gift aid and tuition reductions to students
could actually help
those students who
truly need help.
- Michael LaFaive
for Public Policy
from low-income families, as is often the practice at
private universities." While he hasn't endorsed any spe-
cific plans, even Duderstadt acknowledges the value of
shifting the burden of finance to richer students: "By
asking folks in Bloomfield Hills, who make $200,000
a year to pay a little bit more of their fair share to edu-
cate their kids ... kids who come from Flint, whose
families make $20,000 can afford to go here."
Nonetheless, replacing state appropriations through
the self-sustaining endowment, and not tuition, is obvi-
ously an enticing idea. But increasing the endowment
by $6.4 billion is, according to Courant, "Very unlikely
over any reasonably short period of time. It would be
a remarkable success if it were accomplished over a
decade." While the University has had tremendous
success in building the endowment to its current level
from $1.3 billion in 1995, generating an additional $6.4
billion would require generous donations along with
high-yield investments. Already, the current Michi-
gan Difference campaign aims to raise $2.5 billion, of
which $800 million will be put into the endowment.
And the University's endowment averaged a return of
6.5 percent over the five-year period since 2000 - two
percentage points over the median return on all uni-
versity's investments. But even if the endowment grew
annually by the unusually high $700 million (invest-
ment returns plus donations) it did last year, it would
take at least a decade to generate $6.4 billion.
Thus, privatization of University finances would
require some combination of tuition and endowment
increases. A $3.2-billion increase in the endowment
could generate $160 million in annual revenues, mean-
ing that tuition on in-state undergraduates would only
need to be raised by $10,000 to generate a total of $320
million per year. And while this $3.2 billion increase
in the endowment is "huge," according to Courant,
"we've been doing very well."
Furthermore, by limiting the tuition increase on in-
state students, the University could circumvent a seri-
ous drawback to privatization. A big fear of traditional
privatization, which would equalize in-state and out-
The best gridiron geez
With Batman and Superrr
While our faithful eyes may be fixed on the
majestic city of San Antonio - the Riverwalk,
the Alamo, the black hole of charisma and style
surrounding Tim Duncan - one far more com-
pelling clash of football titans will happen right
in the center of the sleaziest peninsula on earth.
It's the Orange Bowl - and it's going to be the
biggest clash of old field generals since the Iliad.
In this scrum, the real vote must go to the
man who has proven himself a Renaissance
man and true scholar of the field: Joe Paterno.
Brooklyn-raised, hard as nails, Ivy-league edu-
cated, Latin scholar and outspoken on education
and lifetime learning more than he is about BCS
madness or flavor-of-the-month teams, Paterno
is the last sentinel of collegiate athletics. Coach
K, Lloyd Carr and Bobby "Look the Other Way"
Bowden aren't fit to carry around Joe Pa's copy of
the Aeneid. He's got championships, functional,
literate young men and a frickin' library named
after him. He wins, he learns and he might just be
the most respected figure in American sports.
Root for Michigan by all means. Joe
Paterno, the solitary and proud figure of
the NCAA, doesn't even need your cheers.
He's a man in full.
Funny Batman says that Joe Pa is such a
smart man when just this season he made the
asinine comment that "the black athlete has
made a big difference. They have changed the
whole tempo of the game." Yes, Bruce, Paterno
does sound extremely educated.
Here's the other thing, I don't really like
Bowden too much, but he's a better coach
(although do either one of them coach? I don't
think I've seen a headset on either one of those
guys' heads in about 10 years). Paterno finally
stopped being an idiot and let other coaches
open up his offense. Bowden, before his senil-
The Weekend ist
The School of Music presents
this play about Jenny Lind's jour-
ney through America with songs by
Bellini, Mendelssohn and Schumann.
The play will take place at 8 p.m. at
the Clements Library. Tickets are $5
for students, $20 for all others and are
available at the door.
A Flea in Her Ear
The Department of Theater and
Drama presents "A Flea In Her Ear,"
a comedy about misguided relation-
ships. The performance will take
place at 8 p.m. at the Power Center.
Tickets are $9 with a student ID
and $22 for others and are available
through the Michigan League Ticket
Groove Fall Performance
The Stomp!-esque group of musi-
cians mix comedy and visual arts. The
performance will take place at 8 p.m.
at the Michigan Theater. Tickets are $6
and available at the door.
The Da Vinci Code Explored
Pastor Bob Lynn examines the pre-
sumptions and claims made in "The Da
Vinci Code." His lecture will take place at
7 p.m. in the Rackham Graduate School
East Conference room. Admission is free.
Dianne Reeves returns to perform her
acclaimed "Christmas Time Is Here."
The performance will take place at 8
p.m. at Hill Auditorium. Tickets prices
range from $10 to 48 and are available
at the door.
Student Pool Tournament
Students will have another chance to
show off their 8-ball and 9-ball skills in
the monthly contest. The tournament
begins at 1:45 p.m. in the Michigan
Union Billiards Room. The cost is $5
for preregistered students and $10 at the
The Canterbury House presents jazz
mass, a chance for religious expression,
featuring the music of Steve Rush and
Quartex. The performance will begin at
6 p.m. at the Canterbury House.
The Americana musician Chris
Knight performs at the Ark. The perfor-
mance begins at 7:30 p.m. at the Ark.
Doors open at 7 p.m. Tickets are $12.50
and are available online at www.theark.
org or at the door.
Women's Glee Club
The School of Music presents the
Women's Glee Club conducted by
Gabriela Hristova. The concert will
begin at 6 p.m. at the University of
Michigan Museum of Art. Tickets are
$5 and can be purchased at the door.
PHOTOS BY PETER SCHOTTENFELS/Daily
TOP: Former Provost Paul Courant. ABOVE: Former University President James Duderstadt.
10B - The Michigan Daily - Thursday, December 8, 2005
The Michigan Dai