Higher Education and Public-Private Partnerships Dr. Ken Kitts University of North Alabama

Some Questions to Consider What exactly is a public-private partnership (P3)? Why the emerging interest in P3s in public higher education? What are the implications of P3s for public universities and the communities they serve?

Public-Private Partnerships (P3s) “…. a contractual arrangement between a public and private sector partner in which resources, risks, responsibilities, and rewards are shared for the operations and maintenance of facilities, and development of infrastructure.” “…. the web of business and financial relationships that link public higher education to key private sector partners.”

The University of North Alabama History back to 1830 and proud alumni legacy 70+ academic programs that include specialized offerings with a regional flair Entertainment Industry, Hospitality and Design, Kilby Lab School, recent addition of Engineering Technology Located in culturally rich Shoals region Attractive and historic campus Current enrollment of 7,500 and full-time workforce of 750

State Funding for Higher Education Alabama with fourth steepest decline in state funding for higher education since Great Recession of 2008 Higher education funding down 36.2% in Alabama since 2008 Sources: Chronicle of Higher Education, Center on Budget and Policy Priorities

UNA’s Total State Appropriation Fiscal Year UNA’s Total State Appropriation FY 07 $30,133,495 FY 08 $33,707,514 FY 09 $27,359,888 FY 10 $25,105,160 FY 11 FY 12 $25,796,342 FY 13 $24,764,488 FY 14 $25,917,319 FY 15 $26,351,275 FY 16 $27,179,033 FY 17 $28,186,242 FY 18 With dollars adjusted for inflation, UNA is receiving approximately $9 million less per year as compared to the pre-recession level of FY 08.

Less state funding = higher tuition Alabama seventh in tuition increases (56.9%) since 2008 Sources: College Board, Center on Budget and Policy Priorities

Funding Dilemma in Higher Education Loss Of State Funding and Dependence on Enrollment Intense Competition for Students “Arms Race” of Amenities in Higher Education Little State Funding for Capital Development Search for New Funding Sources

Range of Higher Ed Engagement of Private Sector Resources Construction of New Buildings with Private Capital and Revenue Sharing UNA >>> Little to No Use of Private Capital or Expertise Privatization of University Functions World of the P3s

P3s: Finding the Right Balance Advantages Access to much-needed capital and expertise Reduce borrowing and protect credit ratings Project efficiency and speed Maintain competitive advantage Challenges Some loss of institutional control Some loss of revenue Devil in the details – contract negotiation and oversight

Message to ACCA Members from Alabama’s Public Universities Very challenging time for public higher education. We care. Your local university is deeply invested in your community and interested in its development. Use us! We have expertise and services that we are eager to share. We need your help. No better return on investment than higher education. Thank you for your time and attention!