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More Schools, Less Value

General Motors has plants around the world, but it has only one CEO. The University System of Maryland, on the other hand, has 12 institutions and 12 presidents.

When a General Motors plant becomes redundant, the CEO shuts it down. When a University of Maryland campus becomes redundant, the Legislature debates whether to ask the Board of Regents to conduct a study.

The redundant campus, in this case, is the University of Maryland, Baltimore. Under a proposal championed by state Senate President Thomas V. “Mike” Miller Jr., the Baltimore campus would be combined with the state’s flagship university, the University of Maryland, College Park. The current proposal deals only with merging the two schools under unified leadership (or, to be more precise, with studying such a merger), but some far-sighted Maryland residents fear that this is a “first step toward uprooting the school entirely from Baltimore,” according to the Carroll County Times.

If it is a first step, it is the first step on a very long road. The fact that the proposal is even news says a lot about how states run large institutions.

Consolidation can save considerable money by streamlining administration, recruitment and fundraising. Yet most state university systems allow separate institutions or semi-autonomous campuses to proliferate for reasons that make more sense politically than educationally or financially.

The State University of New York (SUNY) has 64 campuses, including community colleges, each of which has some degree of independence. That does not include the 23 campuses in Manhattan’s five boroughs, which are part of the City University of New York. California has two separate systems, with overlapping geographical presences: the University of California, with 10 campuses, and California State University, with 23. Community colleges are part of the separate California Community Colleges System.

Community colleges, which are really a modern extension of high school, need to be local. They also do not usually have elaborate infrastructure. But the proliferation of four-year institutions, some of which are eventually upgraded to include research and graduate study programs, has less to do with education than with local ambition, economic development and simple political horse-trading.

Communities covet the benefits that a full-scale college campus can produce. Hosting a university can give a town prestige, create jobs, attract federal funding and produce a stream of graduates, many of whom choose to stay near their alma maters, providing a source of entrepreneurship and innovation. Politicians often do everything they can to protect schools in their locales and to fight changes that might reduce those schools’ ranking in the educational pecking order.

Downgrading the University of Maryland, Baltimore, to a branch campus might save the state money, but it would signal to potential Baltimore residents and businesses that the state’s educational epicenter is elsewhere and that Baltimore’s glory days are behind it. The city would most likely get to keep the remains of Edgar Alan Poe, now beneath the campus of the School of Law, but the law school itself, and the prestige it brings to the community, might move on.

Baltimore’s representatives will try to prevent that from happening. Usually this means making deals with lawmakers from other parts of the state, who have little interest in the dispute but who will be happy to support the Baltimore delegation in exchange for some other favors. As a result, state funds and tuition dollars that could go toward paying professors or buying lab equipment will instead continue to support a duplicate administration.

Anyone who wonders why corporations are posting healthy profits, even in a weak economy, while state and local governments struggle need only look at the Maryland proposal as a microcosm of how business differs from government. Corporations expand and contract; they evolve as the environments around them change. Government institutions, on the other hand, tend to ossify, leaving university systems and other programs marooned by changing tides. The new campuses that sprouted amid the strong demand of the Baby Boom generation now, in many cases, serve little purpose, but continue to stand nonetheless. And they will likely keep soaking up money until states’ treasuries run dry and fiscal crisis makes change unavoidable.

The merger study still faces a vote in the Maryland House of Delegates. And then, for anything to actually happen, the study would have to recommend the merger and the Legislature would have to follow its recommendation.

But trimming a little piece of duplicate government is a nice thought, even if that’s all it ever is.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us” and Chapter 4, “The Family Business."

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