Creating Win-Win Partnerships

March 1, 2011 | CUNY Matters Columns

Across the country and here in New York, state support for public universities has been declining for the last two decades.  As our recession has deepened, the situation has become more perilous.  A recent study indicates that since 2008, at least 43 states have cut assistance to public colleges and universities and/or made large increases in tuition—from California, where tuition at the University of California has increased tuition by 40 percent, to Michigan, where financial aid was cut by over 60 percent.

In New York, state support for CUNY’s senior colleges has been reduced by $205 million over the past three years.  Our community colleges have lost about $29 million in state funding over the past two years, in addition to almost $8 million in city funding this year. 

With funding decreasing and tuition rising, public higher education must take action.  Let’s not forget that the vast majority of college students—nearly 80 percent—attend public institutions.  Educating the next generation of innovators is critical to our nation’s ability to grow and compete in the global knowledge economy. 

So today, public institutions must become even more entrepreneurial, developing new ideas and initiatives that can lead to new revenue streams.

One area of opportunity is our real estate.  Public-private partnerships offer incentives to all partners and can enable much-needed facilities expansions or upgrades.  CUNY’s complex public-private partnership to create a new home for our Hunter College School of Social Work and our new School of Public Health in Harlem has generated savings of more than 10 percent.

For an urban campus like CUNY, public-private partnerships also offer opportunities to gain space where little available land exists for growth—including space for faculty housing.  We are currently working with developers to identify existing residential properties for this purpose.  As a university, CUNY has some purchasing advantages, including exemptions from real estate tax, transfer taxes, and mortgage recording taxes, as well as access to tax-exempt financing.   CUNY’s concept would allow current residents to stay in their apartments.  As units become available, CUNY would utilize them for faculty, staff, and administration, as well as for New York City schoolteachers and other public employees.  In this way, CUNY would advance the goal of affordable housing, develop faculty residences—and build revenue.

We are also looking at a public-private partnership to create a home for our new community college, set to open in Manhattan in 2012.  The project would utilize the site of the North Hall building on the John Jay College of Criminal Justice campus.  The campus is currently moving from North Hall to a new facility now under construction.  CUNY would sell a portion of the North Hall site to a private developer and retain the balance of the site for the new community college.  The partnership would enable CUNY to finance a portion of the new college’s facility with proceeds from the sale, without relying on the state for the full appropriation.  CUNY envisions a mixed-use building to be built by the developer: the University would own the lower portion of the building and use it for the new community college, while the upper floors would be developed as residential or commercial units. 

Real estate isn’t the only area where possibilities for entrepreneurship exist for public universities.  Consider, for example, that today e-books are generally about one-third the cost of traditional textbooks.  CUNY has initiated an innovative partnership with the New York City Department of Education and IBM to explore the use of e-textbooks in K-12 classrooms.  In February, a pilot program will test the use of selected textbooks on Kindle readers with ninth graders at Stuyvesant High School.  Eventually, CUNY will develop programs to supplement the e-textbook material and market them to school districts throughout the country, generating additional revenue.  And by fully utilizing available technology, the three partners—CUNY, IBM, and the DOE—will be able to hold down costs and offer students tools that will better prepare them for college-level work.

As both governments and families struggle to regain their financial footing, incentivizing revenue at the University is essential.  Even in a difficult fiscal climate, we must provide the best educational opportunities to the next generation of New Yorkers.  It’s the most important investment we can make in New York’s future.

This column is adapted from Chancellor Goldstein’s January 2011 speech to the Center for Educational Innovation-Public Education Association.