How the North Carolina Legislature Can Improve Higher Education in 2018

Legislators returned to Raleigh last week for the beginning of a special session. Education was at the top of the agenda, with the Joint Legislative Education Oversight Committee meeting Tuesday to discuss various changes to North Carolina’s K-12 programs.

That’s as it should be. Here in North Carolina, education makes up roughly 40 percent of total state spending. The appropriation for the UNC system alone is nearly $3 billion. With such a large stake in the outcome, legislators are right to focus on efficiency, oversight, and new policies that can improve education for everyone. Here are a few higher education initiatives I hope they take up this year.

Improve Due Process for Students

As I wrote earlier this month, students saw a significant positive change for due process rights on campus in 2017. The Department of Education, under Education Secretary Betsy DeVos, repealed the now-infamous Obama-era “Dear Colleague” letter that required universities to employ a “preponderance of the evidence” standard when judging cases of sexual misconduct. A new guidance letter now allows—but does not require—colleges to use the “clear and convincing evidence” standard. Many university administrators have announced their intention to continue using the lower standard, which means that students across the country will continue to be penalized, suspended, or expelled if campus courts determine that it is “more likely than not” that sexual harassment or violence occurred. UNC-Chapel Hill, for example, still uses the lower standard.

Now, the North Carolina General Assembly has the authority and opportunity to protect students’ rights by requiring public colleges and universities to use the stricter  “clear and convincing evidence” standard. Lawmakers in at least nine states have already begun the process.

A North Carolina bill that stalled in committee last year provides a blueprint for change. If enacted, the bill would require universities to give accused students “adequate notice including details of the allegations…and copies of all evidence at a meaningful time and in a meaningful manner.” It would also permit both parties in a case to question and cross-examine witnesses. And it states that the “standard of proof of responsibility for proving sexual misconduct shall not be less than clear and convincing evidence.” Enacting such protections should be a priority in 2018.

Increase Transparency of Public University Foundations

Most of North Carolina’s 16 public universities, and many of its community colleges, have set up private non-profit foundations to act as the fundraising, investment, and publicity arm of the school. UNC-Chapel Hill and NC State’s foundations, which manage the universities’ endowments, both handle more than $1 billion in assets.

And despite considerable entanglement between the public entities and the private foundations—which often share space and employees—there is little to no oversight or accountability. The public doesn’t know where such foundations get their money or how it’s spent.

More transparency is essential to ensure that university foundations are operating lawfully and with their public purpose in mind. Across the country, there have been too many examples of waste and fraud in university foundations to continue allowing them to operate in the dark.

Despite considerable entanglement between the public entities and the private foundations—which often share space and employees—there is little to no oversight or accountability.

In order to shed light on foundations’ activities, the North Carolina General Assembly should change state law to subject all foundations that operate to benefit a public university or college to open records laws. The foundations are exempt under current law due to their official status as private non-profit organizations.

A few states have taken action and could be models for reform in North Carolina. Two states mandate that foundations’ donor information be made public. Three states stipulate that foundations are subject to the same open records laws as public agencies.

The Martin Center has made the case for such changes here and here.

Follow-Up on Financial Transparency and Funding Models

The legislature should also revisit two significant actions for higher education finance.

In 2015, an important measure for financial transparency passed as part of the North Carolina budget. It requires every state agency to provide its budget data, and for counties, cities, and local education agencies to post local budget and spending data on a new website. Soon after the provision was passed, NC Open Budget, a project of the Office of State Budget and Management (OSBM), went live. It includes some information that’s useful for understanding university spending. But the legislature wasn’t satisfied. In 2017, legislators reiterated their call for transparency. This year, they should demand action from universities (and other state agencies) to finally provide the information they requested.

The legislature should also closely follow the work of the University of North Carolina Funding Model Task Force. The UNC Board of Governors and UNC System President Margaret Spellings established the Task Force to evaluate and improve the existing UNC funding formula, which emphasizes enrollment instead of performance. Members of the Task Force include various UNC Chancellors, members of the UNC Board of Governors, and members of the public. They first met in May of 2017 and are expected to make recommendations to the Board in April 2018.

The Martin Center has long recommended that the Board or the General Assembly change the funding model to better align public spending with student success. And the legislature has already made great strides to improve the process, including the elimination of incentives to overestimate enrollment. The work of the University of North Carolina Funding Model Task Force will point to other avenues for reform. And although they officially report to the UNC Board of Governors, it is the General Assembly that ultimately determines the amount and method of funding North Carolina’s public universities. Legislators should listen carefully to the Task Force’s ideas.

Over the past half-decade, the North Carolina General Assembly has worked to enact positive reforms in the UNC System. I expect 2018 will be another great year for UNC students, parents, and citizens.