Business initiative aims at economic growth in Virginia through higher education

RICHMOND — For the next 100 days, a new coalition of business and higher education leaders will push an aggressive agenda for state funding of public colleges and universities, with an eye toward programs that prepare students for jobs that industry needs filled and help restore the state’s diminished business ranking.

Their target is the Virginia General Assembly, which will convene in early January with the top job of acting on a two-year budget proposed by the departing governor while working with the spending priorities of a new governor whom voters will choose in November.

Growth4VA, an initiative launched Sept. 25 by the Virginia Business Higher Education Council and pushed by McGuireWoods Consulting, has four goals: produce talent for the workforce; foster innovation and entrepreneurs; improve people’s lives through education; and expand affordable access to higher education at every level.

“Today is about collaboration, collaboration between higher education and the business community,” said Jean Giddens, dean of the School of Nursing at Virginia Commonwealth University, where the initiative held its kickoff ceremony.

The initiative also is about state funding for higher education, both new and redirected at economic priorities, after a long decline since the beginning of the millennium that has been mirrored by a rise in tuition and student debt the state has been working to reverse.

“We do need more money,” said Dennis H. Treacy, a member of business council who also serves as chairman of the Virginia Chamber, rector of Virginia Tech and president of the Smithfield Foundation. “We need level and stable funding, and we need it focused on what the employers say really matters.”

For the chamber, the path back to a top five ranking among states for business leads through higher education, Treacy said. “Higher education is at the epicenter of what the chamber is trying to do.”

Higher education also is central to a number of other business-led initiatives the state has endorsed — including funding for collaborative research that can translate to new technologies and businesses; GO Virginia, a regionally focused economic development model that relies on the state’s community colleges as a pipeline for trained workers; and refocused workforce development programs that have in the past lost sight of the skills employers say they most need.

All of those initiatives will be looking for renewed or expanded funding in the budget that Gov. Terry McAuliffe will propose in December and the legislature will begin reviewing this month. While business leaders are pleased by Virginia’s ranking in producing the second-highest number of college graduates, they also worry about the effects of a 45 percent decrease in state funding for higher education from 2000 through 2015.

The State Council of Higher Education for Virginia also is concerned about the funding trend, which it estimated last month would require an additional $660 million to fully reverse and ease the pressure on tuition, now accounting for 53 percent of the cost of higher education at public institutions.

However, the 15-year decline does not reflect additional funding the state included in the current two-year budget — more than $167 million, even after cuts of about $64 million to make up for a revenue shortfall that emerged in mid-2016. This year, the state added $18.4 million to help higher education institutions pay a 3-percent raise for faculty.

In return, lawmakers have pressured the institutions to restrain increases in tuition.

In addition to seeking more state funding, Growth4VA also could generate legislation for the General Assembly to consider next year, including the possible creation of a higher education reserve fund to help cushion against declines in revenue, an incentive fund to moderate rise in tuition, and a plan to give each institution more “managerial flexibility” in return for producing measurable results.

Similarly, the initiative will seek funding and business partnerships to improve job placement and advising at higher education institutions, and provide internships and other pathways into the workforce. In return, the state would require colleges and universities to provide more transparency to prospective students in what their education would cost and the likely return on investment.

“It’s not just new money but a better focus on the resources that institutions already have,” said Donald J. Finley, president of the business council and a former state secretary of education.

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