Budget-writers start drilling into higher ed ‘CEO’ proposal

Legislative budget-writers began to dig into Gov. Butch Otter’s higher education “CEO” proposal Monday morning — and honed in on two questions.

How much will the plan cost? And how much will it save?

The cost is clear enough, at least in the short run. Otter wants $769,500 to launch this overhaul in 2018-19 — enough to hire a consultant and add a $200,000-a-year administrator. The savings potential remains unclear.

Matt Freeman

“It’s going to cost money to save money,” State Board of Education executive director Matt Freeman told the Joint Finance-Appropriations Committee Monday. “It will be a large undertaking.”

The CEO proposal has emerged as Otter’s most scrutinized — but not largest — line item to overhaul the state’s higher education system. The CEO, or “chief education officer,” would be expected to streamline administrative work on the state’s college and university campuses, finding savings that could be moved into student scholarships or other academic programs.

“We believe there is a tremendous potential for savings in undertaking this,” State Board President Linda Clark told JFAC Monday. Otter’s State Board formally endorsed the CEO proposal Thursday.

The Idaho plan is modeled somewhat after Maine, which moved to a chancellor system when state revenues and college enrollment both dropped during the recession. Otter has stopped short of calling for a chancellor, opting for a CEO who will focus on administrative functions such as payroll, personnel and IT.

Otter’s 2018-19 budget request boils down to two lump sums.

  • The first $500,000 would be one-time money to hire a consultant, to study the university system and try to identify savings. The $500,000 is “a rough ballpark estimate” of costs, said David Hahn of Otter’s Division of Financial Management. The hard numbers will come when the state solicits bids.
  • The remaining $269,000 would cover the CEO’s salary and benefits. At a $200,000 salary, the CEO would be the highest-paid employee in state government. Supporters hope to hire an administrator with experience leading complex organizational change — and qualified applicants could be hard to find.

JFAC members pressed for details Monday, with mixed results.

Sen. Mary Souza, R-Coeur d’Alene, asked how much Maine saved through its higher ed overhaul. Freeman could not provide a hard figure, but said the state saved enough money to freeze tuition for six years.

Rep. Wendy Horman, R-Idaho Falls, asked why Otter wants to hire a CEO right away, rather than waiting for consultants to do their work. Hahn said Otter sees no reason the process can’t work on two parallel tracks — ramping up an office while studying the scope of work.

Linda Clark

Horman also asked how the CEO hire would affect the State Board’s management structure.

“As for specifics, we have not had that conversation,” Clark said.

However, the State Board wants to get this overhaul on the fast track. The State Board is working on a job description, Clark said after Monday’s hearing. And if the Legislature goes along with the proposal, the State Board hopes to have a consultant hired on or about July 1, the start of the 2018-19 budget year, Freeman said.

Monday’s budget hearing started the legislative push on the CEO proposal. Lawmakers will have to decide whether to create a CEO’s position, with a bill likely to surface in the House or Senate education committee. Then JFAC would have to decide what to do with the $769,000 budget request.

After Monday’s hearing, Clark said she wasn’t surprised by the questions from legislative budget-writers.

“I expected more,” she said. “I thought the questions were very reasonable ones.”

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