When the people of Virginia entrusted me with the high privilege to serve them as Governor, my first official act was to sign Executive Order No. 1 establishing this Blue Ribbon Commission on Higher Education. Mindful of a Governor's solemn obligation to be a steward of the public's resources, tax dollars, and educational opportunities, I established this Commission to undertake a thorough review of how public colleges spend nearly $3.5 billion in public funds each year to provide Virginia's daughters and sons a college education. I paused during my Inaugural Address to create this Commission to underscore the importance of this undertaking to the lives and opportunities afforded hundreds of thousands of Virginia's citizens.

Needless to say, the subject of this Commission's work touches upon the dearest hopes and aspirations of every person in this room. At some point in our lives each of us sought to improve out intellects and our lots in life by going to college and earning a college degree. College was my way up. And now, like many of you, college will be one of the most important opportunities I will provide my children.

In fact, hundreds of thousands of students and parents seek this opportunity each year in Virginia. We owe them the highest quality educational opportunities at costs they can afford. This Commission's work is equally important to the millions of Virginians who work hard, pay taxes from the earnings of each week's labor, and who thereby own sixteen public colleges and universities and twenty-three community colleges. The people of Virginia are the shareholders of the higher education enterprise. It is on their behalf that the General Assembly appropriates $1.5 billion of tax dollars annually and that our public institutions spend nearly $3.5 billion in public funds each year ­ in order to improve the Commonwealth and serve our citizenry as a whole. We owe these people a solemn fiduciary duty.

So, when the people of Virginia granted me the opportunity to serve as their Governor, I set the highest expectations for this Commission and what it could accomplish on their behalf.

Ladies and gentlemen of the Commission and Chairman Flippen, you have exceeded my highest expectations.

You devoted over eighteen months and literally hundreds of hours to the service of parents and students and taxpayers all across this Commonwealth. You criss-crossed the state. You received testimony from nearly a hundred experts. You engaged the public and policymakers alike. You included the General Assembly, college board members, college presidents, administrators and faculty. You went beneath the surface. And you have contributed significantly and substantively to public policy on higher education.

On behalf of the people of Virginia, please accept your Commonwealth's deepest appreciation. I applaud you.

When we met at the Commission's first meeting at this location in June of 1998, I asked you to make specific recommendations on three core objectives:

• First, to raise the quality of educational instruction, programs, and research at all public colleges and universities.

• Second, to keep a college education affordable for the next generation of Virginians.

• Third, to ensure accountability for the expenditure of public resources, and, in that regard, to empower boards of visitors to fulfill their fiduciary duties to the people of Virginia.

These core objectives ­ quality, affordability, and accountability ­ are the touchstones of what I consider the best system of public higher education in the nation. And Virginia should strive to be nothing less.

On the matter of quality, I believe the Commission's focus on academic rigor and setting priorities within institutions to allocate resources where they will produce the greatest educational benefit will resonate with boards of visitors and deans and faculty for many years to come. Too often an institution's programs become static or are left to drift over the years ­ but if institutions adopt the kind of quality and resource allocation measurements endorsed in your report, excellence will be only a few deliberate allocations away ­ degree program by degree program.

And on the issue of quality research and programs, this Commission has recommended that the Commonwealth expand its support for research and move more innovations from academia to the marketplace. I'm providing $20 million in my budget to establish the Technology Competitiveness Fund for colleges and universities ­ to match federal and private research grants in state-of-the-art technology and scientific fields. The fund will enhance the national reputation of our key academic departments and attract some of the world's leading faculty to teach at our colleges and universities. This will propel Virginia as a higher education leader as well as a technology leader.

Of course, a high quality education is of little value to people if access is denied because the degree is too expensive. Far too many families are forced to undertake substantial debt ­ sometimes a second mortgage ­ to afford the dream of a college education.

Last year this Commission revealed that tuition and fees doubled in Virginia in just fifteen years. You also documented the effects of what was described as a "tuition transfer tax" during the recession of the early 1990s ­ when colleges and universities increased tuition and fees to offset reductions in general fund tax support.

The General Assembly and I responded to your findings. I proposed a 20 percent tuition rollback and budgeted $75 million in new tax dollars to reimburse the institutions dollar-for-dollar in order to reverse the "tuition transfer tax" of the recession era. The General Assembly concurred, and we made a college education more affordable for the citizens of Virginia by $75 million ­ a savings of over $400 per family each year.

In addition to that, we have frozen tuition and mandatory fees, and I propose that we continue the freeze for four more years and use tax dollars to maintain excellence instead of tuition jumps.

When this Commission started its work, Virginia ranked as the 8th most expensive state to obtain a college education. As a result of your work and these progressive policies, Virginia is now only the 18th most expensive. With a freeze in place, we can improve our national position in affordability even further.

Clearly, a college degree is more affordable for a citizen of Virginia today than it was just two years ago.

That will be one of this Commission's most defining legacies, and each of you should be very proud of that achievement.

Of course, we have enjoyed a bountiful economy. And that economy has permitted us to increase tax support for Virginia's colleges by $690 million since I became Governor to enhance the quality of academic programs, raise faculty salaries, and expand campuses. Consequently, the taxpayers and citizens of Virginia are devoting more money to higher education today than at anytime in the history of Virginia. By all measures ­ including inflation and the number of students we educate ­ Virginia is supporting higher education with unprecedented resources.

Consider, for a moment, how far we have come:

In 1990, Virginia taxpayers spent about $4,200 per student. This year, they are spending $6,100 per student ­ a 12 percent increase in real dollars per student. And combined with all other sources of income our colleges take in each year ­ from taxes to tuition and fees to research grants, book store profits and athletic ticket sales ­ total resources per student increased from $9,200 in 1990 to $15,600 this year ­ a 28 percent increase in real dollars ­ per student ­ in just ten years!

This Commission also documented that ­ compared to all other government programs ­ from Medicaid to public schools ­ higher education has received higher percentage increases than any other program during the last five years ­ re-affirming that a college education is a top priority for the people of Virginia.

Virginia can be proud of its progress.

We all understand, however, that Virginia never will be able to stand pat. To compete nationally and globally with cutting edge programs and eminent professors, Virginia must be prepared to do more.

When I spoke to this Commission at your first meeting at VCU in August of 1998, I showed you spending increases by Virginia's colleges over the last two decades and I said: "The next generation of Virginians Š will be asked to spend an additional 210 percent on higher education. That may be needed," I said. "But before they are required to pay, the people of Virginia deserve a formal blueprint to guarantee them that the Commonwealth is prepared to spend every dollar to increase the quality of teaching and learning ­ and to maintain the academic excellence we have achieved since the 1970s."

Ladies and gentlemen, you have written that blueprint and for the first time have proposed that higher education planning and strategy become a part of the overall public policy process of the Commonwealth. It is a blueprint for accountability based upon two key principles:

• First, active and effective governance by boards of visitors to ensure internal accountability within institutions; and

• Second, "Institutional Performance Agreements" between each institution, the General Assembly and the Executive Branch to ensure external accountability to the public.

Accountability is the touchstone of all public policy in the 21st Century ­ not just in Virginia but throughout the nation ­ and the predicate for public confidence and support in the future. There is no greater threat to the public's support than an utter lack of accountability. The people pay our way, and they deserve to measure our results.

I predict that the accountability blueprint authored by this Commission will be copied by other states and other institutions in years to come. The people of Virginia can be very proud of your work.

In my view, this foundation of accountability will enable prudent stewards of tax dollars here in Virginia to support the expenditure of increased resources for higher education in the years ahead, and to do so with confidence that the consumers of higher education, and all taxpayers, are getting their money's worth.

As you know, the budget I submitted to the General Assembly incorporates your recommendation for Institutional Performance Agreements.

The process calls for each institution to develop and submit an IPA this year. Each proposal will be reviewed by both the executive and legislative branches. Some agreements may be finalized by the end of this year, and others may take longer. But the process must begin promptly and it must involve every institution.

I understand the partnership that is necessary between the General Assembly, the college boards and presidents, and the Executive Branch to make performance agreements a reality as effective mechanisms for linking increased funding for higher education with enhanced accountability. Toward that end, I have discussed the proposal with Senator Chichester and I have asked him to partner with me in reshaping our process to ensure excellence in higher education. I am reaching out to other members of the General Assembly as well.

Secretary Bryant, President Merten and Frank Atkinson already have engaged in spirited and constructive discussions before General Assembly committees. The Council of Presidents, speaking through Alan Merten's letter to the money committees, has put forward a workable approach to the IPA process that is consistent with this Commission's recommendations.

And I believe the development of Institutional Performance Agreements should proceed in tandem with the crucial ­ and complimentary ­ work of Senator Chichester's Joint Subcommittee on Higher Education on the subject of base funding adequacy. I look forward to seeing the results of those studies.

Working together over the course of this year, and next year if necessary, we can develop multi-year agreements that combine adequate and reliable funding with outcome-oriented accountability. For the first time ever, Virginia's public colleges and universities will be able to plan their affairs strategically, rely upon predictable funding, and build their programs deliberately and thoughtfully over several years. That is the best ­ and indeed perhaps the only sure way ­ to fulfill our responsibilities, both as stewards of tax dollars and as trustees of what can be the best higher education system in America.

Ladies and gentlemen, few commissions in the history of Virginia can claim the kind of legacy that this Commission will leave behind:

• Attention to curricula and academic rigor
• A new research grant fund
• 20% tuition rollback
• A prescription for effective board governance, and
• A statewide blueprint for higher education's accountability to the public that will be recognized nationally.

Not since Thomas Jefferson chaired the Rockfish Gap Commission in 1818 has a commission gone into such detail and produced such creative and far-reaching thought on an issue as complex as the higher education enterprise. I am proud of each of you.

I am proud of your honorable chairman for his effective leadership. And I am hopeful for the next generation of Virginia's students, parents and taxpayers ­ that their educational opportunities will be greater because of what you have accomplished here.

Thank you.

Jim Gilmore
Governor