Thursday, May 16, 2002

Selling dorms proposed

Lawmaker says plan could raise $750M for state; university officials worry about effect on students

By Andrew Welsh-Huggins
The Associated Press

        COLUMBUS, Ohio — State universities are criticizing a proposal to sell dormitories to for-profit groups to raise as much as $750 million for the state budget, saying the plan doesn't make financial sense and would penalize students.

        Several university finance officials responded to a request this week by the Ohio Board of Regents for information on their dormitories.

        Rick Petrick, vice chancellor of the Regents, who oversee Ohio's public colleges and universities, said lawmakers had asked him to investigate a proposal “that would require all public campuses to sell all of their dormitories to private owners or operators as a condition of receiving state subsidy.”

        Mr. Petrick said lawmakers claimed they could raise $750 million selling the dorms.

        “This amount can look mighty attractive to members who want to avoid raising taxes,” Mr. Petrick said in a Monday e-mail to university finance officers.

        “Please know that we are not advocates of this proposal, and that I am greatly concerned about the apparent haste with which it is being put forward,” he said.

        State officials are grappling with how to patch a two-year $1.7 billion budget deficit.

        Rep. Timothy Grendell, a Chesterland Republican, was behind the proposal, House Speaker Larry Householder said Wednesday. A message was left with Mr. Grendell seeking comment.

        University officials said dorms were built without state money using tax-free bonds, an advantage private owners would not receive when taking out loans to buy the dorms or renovate them.

        David Creamer, Kent State's vice president for business and finance, said dorm costs would rise dramatically if the facilities passed into private ownership.

        “I guess the tuition increases weren't enough,” Mr. Creamer said in his e-mail response to the Regents, referring to increases required by cuts to higher education last year. “Let's add to their cost of housing so no one can afford to attend our institutions.”

        Mr. Creamer said no state money was used to pay for Kent's dorms and all costs are paid by student fees.

        “This really takes and solves the state's problem by penalizing a small segment of the state's population in the future to make this work,” he said.

        Matt Filipic, Wright State University's vice president for fiscal services, said in his response, “It is hard to imagine that the students who live in these facilities and whose room charges pay for the cost of operating them and for the retirement of the debt incurred to build and renovate them would be well served by the proposal.”

        Asked about the idea, Gov. Bob Taft said Wednesday he couldn't respond because he wasn't familiar with the proposal.

        Mr. Householder called Mr. Grendell's idea a “speculative” proposal that would need extensive research.

        Senate President Richard Finan, who is also chairman of the University of Dayton's trustee board, said Dayton is taking the opposite approach by buying up property around campus to control houses where students live.

        “The other side of the coin is to look at the dynamics of, "Do you really save money with that?'” Mr. Finan said. “I'm never unwilling to look at anything. I just know from experience at the school that I chair the board, we're going the other way.”


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