Kansas Board of Regents opposes bill granting unprecedented administrative autonomy to universities
John Dicus, a member of the Kansas Board of Regents, says a Kansas House bill granting unprecedented administrative autonomy to Kansas State University, University of Kansas and Wichita State University is like taking an idea for improving efficiency and pumping it full of steroids. (Photo by Tim Carpenter/Kansas Reflector)
TOPEKA — The Kansas Board of Regents voted unanimously Wednesday to oppose a Kansas House bill granting the state’s three largest public universities — Kansas State University, Wichita State University and University of Kansas — unprecedented autonomy in purchasing, construction, licensing, bidding and ownership of property.
The nine-member higher education board’s oversight of the three research-oriented universities would be narrowed to issues tied directly to use of state funding, while board oversight would be unchanged at Pittsburg State University, Fort Hays State University and Emporia State University.
The vote by the Board of Regents was inspired by introduction Wednesday of a transformative 16-page bill. The urgency of a board decision on whether to endorse or oppose the legislation was made clear when House leadership scheduled a Thursday hearing on the bill before the House Higher Education Budget Committee. The House calendar says the committee may vote immediately after gathering public testimony on House Bill 2798, one day after the bill was introduced by House Majority Leader Chris Croft, R-Overland Park.
Several members of the Board of Regents expressed enthusiasm for provisions of the bill advancing ideas for business efficiency, but the majority was critical of the bill as written. Questions were raised about whether the initiative was a precursor to involving private equity firms in the university athletic programs.
There were objections to the bill’s aggressive shredding of the board’s authority over the three universities. If this bill were embedded in state law, the Board of Regents would have no input on expenditures by the three universities unless the decision involved state tax dollars.
Board of Regents member Alysia Johnston, who has 37 years of experience working in higher education, said she was anxious the board’s stewardship role of state university financial and academic affairs could get lost in a rush to embrace radical change. Taxpayers rightly expect the state university system to offer accessible, affordable, high-quality educational opportunities and to serve as cultural and economic engines of the state, she said.
“I just want to make sure we’re not accidently … throwing the baby out with the bathwater,” Johnston said. “I think there’s going to be a whole lot of unintended consequences. That really concerns me.”
Board of Regents chairman Blake Benson said he was astonished by text in the House bill that drew a jurisdictional line in the sand between public and private funds at KSU, KU and WSU.
“To me, that’s a game-changer because I worry that takes the responsibility that we’ve been charged with in terms of control and responsibility,” Benson said.
John Dicus, a member of the Board of Regents, CEO of Capitol Federal Savings and a trustee of the KU Endowment Association, said the state board had engaged in discussions about how to remove regulatory burdens on university construction projects. He said the House bill would go well beyond anything he had contemplated.
“This seems to take that and put it on steroids and take it completely out of our hands,” Dicus said. “Is that a fair assessment of this?”
John Yeary, general counsel to the Board of Regents, offered this summary: “I do think it’s a fair assessment to say they would be largely autonomous in those areas that are not state funded. There would be a lot of autonomy that would exist under this bill that doesn’t exist now.”
Regents Matt Crocker and Peter Johnston shared alarm at where the new level of independence could lead the three universities. They pointed to the decision by University of Utah to partner with a private equity firm to form a for-profit entity, Utah Brands & Entertainment LLC, to generate an estimated $500 million in capital to support the Utes athletic department. The entity was designed to focus on enhancing revenue streams beneficial to that Big 12 Conference member.
“Private equity is trying to get their mitts into colleges or universities,” Crocker said. “This bill as drafted would allow that to occur without Kansas Board of Regents oversight?”
“Potentially, yes,” said Yeary, the board’s attorney.
Richard Linton, the president at Kansas State, said the state universities could make that kind of deal without passage of the pending House bill.
“That exact example you gave can happen today for athletics,” Linton said.
Kathy Wolfe Moore, a member of the Board of Regents and a former Kansas House member, said the deal had been presented to board members as a way to mimic the Kansas Legislature’s decision in 1998 to create the University Of Kansas Hospital Authority to improve financial viability of the KU Medical Center campus in Kansas City, Kansas. Turns out, she said, the House bill would take the state beyond that arrangement.
Wolfe Moore said direct state appropriations in 2025 to KU accounted for 18%, or about $330 million, of the university’s revenue. Under the bill, the Board of Regents would lose oversight of more than 80% of KU’s budget.
“We owe more accountability because with public funds you also have to have public trust,” she said. “In a private business, it can be done with a handshake. But this is not the same. There has to be accountability over all aspects of it.”
Wolfe Moore said she was curious about provisions deleted from previous incarnations of a plan for the three universities. For example, she said, a document shared with her included an exemption from the Kansas Open Records Act to conceal employee salaries at the three research universities.
“I realize this bill is a beginning,” Wolfe Moore said. “There’s a desire to have much more in this bill.”