Yesterday I wrote about a proposal before the State Board of Higher Education today to have North Dakota State University take over a nursing college in Bismarck run by Sanford Health. Legislators I’ve spoken to have expressed concern about the deal, pointing out that three people involved in the transaction for the university system (Chancellor Larry Skogen, board member Don Morton and NDSU President Dean Bresciani) are all members of various Sanford boards and that the nursing college itself doesn’t cashflow. Meaning that, in the future, the legislature will be asked to appropriate money to keep the nursing college afloat.
According to the agreement put in place by NDSU and Sanford, the deal will be revenue neutral for the first three years of budget projections. But after that taxpayers will be asked to pick up millions of dollars in costs which the legislature will have to appropriate.
Which is an interesting facet of this debate. Earlier at this same SBHE meeting the universities demanded tuition increases suggesting that the legislature had left them with a funding “shortfall” (despite a 12 percent increase in campus budgets and a half billion in one-time spending on top of that). But how much of that “shortfall” are universities creating for themselves new spending obligations, and then using the threat of politically tuition hikes for students to bully the legislature into funding it?
That issue was hinted at by at least one board member.
“I think it probably should happen, but as we bring a new college into our system it involves public dollars. Should we bring our legislature in to make a determination on this?” asked Kathleen Neset. NDSU President Dean Bresciani suggested that it was none of the legislature’s business (even though they’ll eventually be tasked with paying for it). “I don’t believe we go to the legislature asking for a special accommodation for this,” he said.
Board member Kari Reichert was concerned about the appearance of special treatment for Sanford. “We’re partnering up with a single business,” she said. “Does that give a competitive advantage to one over another? I don’t want there to be any appearance of exclusivity.”
It’s worth noting that in a state with a chronic nursing shortage, over 90 percent of the current graduates of this school go on to work at Sanford. So the appearance of exclusivity is built in.
Ultimately the deal was approved by the board on a nearly unanimous vote, with only Neset voting no.
This deal will be worth keeping in mind when the universities go to the legislature next year with their budget requests.