Romney Brings a Businessman's Perspective to Higher Education

As a governor, he took an analytic, but not always successful, approach to reform

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By KARIN FISCHER

Mitt Romney ran for governor of Massachusetts in 2002 pledging to bring his business acumen to bear on a state-government bureaucracy he characterized as flabby and complacent. Once he was elected, one of his first targets was the state's public-college system.

In March 2003, just two months after taking office, Governor Romney introduced an audacious higher-education overhaul, proposing to privatize three public colleges, merge several others, and spin off the flagship Amherst campus of the University of Massachusetts as an independent institution. He also called for eliminating the job of one of the state's most powerful and well-connected figures, William M. Bulger, president of the university system. The plan, Mr. Romney said, would save taxpayers $150-million at a time the state faced a $3-billion budget shortfall.

The higher-education proposal, he said at the time, was his "opportunity to be bold."

The governor's announcement stunned college officials, who said that they had not been informed of his plan, and that the management consultants who had helped Mr. Romney, a venture capitalist, draft it had little understanding of higher-education finance or governance. Controversy stoked by the proposal to remove Mr. Bulger, who had been president of the State Senate for 17 years, eventually engulfed the entire effort.

By summer the plan was dead.

As he seeks the Republican nomination for president, Mr. Romney, 60, has offered few details about what higher-education policies he would pursue if elected. His campaign advisers say a higher-education platform, currently being drafted, will emphasize ensuring access for students from all socioeconomic backgrounds and better preparing graduates for the global economy.

Still, his four years as governor of Massachusetts, and in particular his failed attempt to overhaul higher education there, offer insight into Mr. Romney's leadership style as well as the prism of data through which he sees ways to attack problems.

Turnaround Experience

After a stint as a Mormon missionary in France and as a student at Brigham Young University, where he received a bachelor's degree in English, Mr. Romney enrolled in a dual-degree program offered by Harvard Business School and Harvard Law School. Although he told Robert M. Costrell, one of his education advisers as governor, that he had considered an academic career, he went to work as a management consultant after graduating with honors in 1975.

When Mr. Romney was only in his mid-30s, he was tapped by executives at his Boston-based firm, Bain & Company, to lead a spinoff entity that would invest in struggling companies, use consulting expertise to restructure them, and sell them at a profit. The private-equity firm, Bain Capital, made Mr. Romney a multimillionaire.

In 1999 he took his skills as a turnaround artist to another arena, signing on as chief executive of the organizing committee for the 2002 Winter Olympic Games, in Salt Lake City. The committee was running short of funds and had been tarred by a bribery scandal, but Mr. Romney was able to reduce costs, increase fund raising, and mend the committee's reputation, as well as allay security concerns in the wake of the September 11 terrorist attacks.

After the Olympics, Mr. Romney was encouraged to run for governor in not one but two states, Massachusetts and Utah. Despite having lost a 1994 race for the U.S. Senate to a liberal icon in Massachusetts, Edward M. Kennedy, he entered the gubernatorial race there. This time he won.

Driven by Data

As Mr. Romney took office in 2003, Massachusetts was reeling economically from a downturn in the technology sector and faced a mounting budget deficit. The new governor set about scrutinizing the state government to find efficiencies.

"He's very much data driven," says Mr. Costrell, who served as the state's chief economist before becoming Mr. Romney's top education aide in 2005. When Mr. Romney had policy ideas, he would first have the variables analyzed to test the strength of his proposals, says Mr. Costrell, now a professor of education reform and economics at the University of Arkansas at Fayetteville.

To craft a blueprint for restructuring the state's colleges and universities, Mr. Romney turned to his old firm, Bain & Company, which approached the higher-education system as it would a failing business. In addition to recommending organizational changes, the consultants also identified potential cuts and set performance targets for each institution.

Critics say the private-sector consultants did not understand the peculiarities of higher-education budgeting, such as the high fixed costs for salaries and benefits, and failed to take into account the impact of location and student demographics on spending.

"Anything that deviated from the norm was [seen as] a potential savings," says Michael J. Widmer, president of the nonprofit Massachusetts Taxpayers Foundation. "They were number-crunching in a vacuum."

Lessons Learned

Mr. Widmer also says that excluding colleges from the planning process cost Mr. Romney a potential source of support, as there were aspects of the proposal that might have appealed to certain institutions had they been more involved — for example, the call to vault the university system's flagship Amherst campus from an academic also-ran to the ranks of the country's elite public universities. (UMass-Amherst officials criticized the plan for not providing necessary funds.)

But the proposal to do away with Mr. Bulger's position was the plan's undoing, Mr. Romney's supporters and detractors agree.

"The political dynamic with removing Bulger clouded even the good ideas," says State Sen. Stanley C. Rosenberg, a Democrat who represents Amherst's district. "You had to ask, Is this about improving the university or getting rid of the university president?"

Mr. Bulger, a longtime Democratic politician, stepped down from his university post later in 2003 amid criticism of his role in a federal investigation of his mobster brother. But by then the governor's plan was dead, and Mr. Romney made no attempt to revive it.

Still, the experience provided him with an important lesson on the differences between management theory and governing, political observers say. Three years later, the governor used his analytic approach to come up with a plan for universal health care and then worked with the Democratic legislature to get it passed.

In other instances, Mr. Romney circumvented state legislators, as in the case of the only other major higher-education plan of his tenure, the creation of a statewide merit-based scholarship. He turned to the Massachusetts Board of Higher Education, the state's coordinating board, to approve the John and Abigail Adams Scholarship, which waives tuition at public colleges for students whose scores on a state standardized test rank in the top 25 percent in their school districts.

A Road to the Future

Critics of the scholarship program say its impact is not as far-reaching as it might appear. In Massachusetts the state governs tuition rates, but individual institutions set student fees, which now dwarf tuition on most campuses. During Mr. Romney's four-year term, fees increased 63 percent, from an average of $2,959 in 2003 to $4,836 in 2007, according to the Board of Higher Education, to offset budget cuts of about $140-million, or 14 percent, during the fiscal downturn.

"I think higher education really stood still" in affordability and quality during Mr. Romney's time in office, says Robert Karam, a former chairman of the University of Massachusetts Board of Trustees and a onetime backer of Mr. Romney, who felt that the governor had reneged on a promise to provide more support to the university.

Hampered by State's Finances

Mr. Costrell, who is no longer advising Mr. Romney but supports his candidacy, says the governor was hampered by the state's financial condition when he was in office. But the professor says the merit scholarship, which was meant to encourage students to perform better on the state's mandatory exit exam, is emblematic of the business-minded, results-oriented approach Mr. Romney brought to governing.

Those themes are echoed in Mr. Romney's presidential campaign, although thus far he has focused much of his attention on elementary and secondary education. He has called for giving parents greater "competition and choice" in selecting schools and has voiced support for holding schools accountable through testing, as under the No Child Left Behind law. He has not said whether he supports similar accountability measures for colleges.

He also has proposed strengthening math-and-science education to prepare students to compete in the global economy, linking college financial aid to the jobs that students pursue after they graduate, and restructuring federal worker-retraining programs to better serve individuals who seek to learn new skills. Last month he named Michael E. Porter, a Harvard Business School professor, to lead a group to advise him on global-competitiveness policy.

In addition, Mr. Romney has called for the elimination of taxes on income from interest, dividends, and capital gains for those who earn less than $200,000 a year, which would help middle-class families save for college, says Lanhee J. Chen, domestic-policy adviser to the Romney campaign.

The former governor recognizes the role higher education can play in meeting "critical needs" in economic competitiveness and national security, Mr. Chen says. "His approach is not to demagogue the problem, but to get behind the numbers and figure it out."