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Mitt Romney's Bain Experience Failed For Massachusetts Higher Education

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WASHINGTON -- Mitt Romney's presidential campaign has, in recent days, hailed his experience in the private sector as central to his approach to managing the nation's problems. As governor of Massachusetts, too, Romney spoke ambitiously about using his Bain background to streamline government programs.

Implementing these reforms rarely went as smoothly as promised, however, and the results often underwhelmed or never transpired, according to people who worked with Romney or were directly affected by his time in the state house. Serving in government proved much trickier than being a corporate CEO, as Romney struggled to deal with an opposition legislature that refused to sign off on many of his proposals.

Perhaps the clearest example of how difficult it was for Romney to use private-sector tactics to mold public policy was his approach to higher education.

When Romney took office in Massachusetts in 2003, the state was facing a $3 billion deficit, and the governor approached the problem like any other failing business. Higher education was a tantalizing target for reform and Romney made clear from the get-go that he believed it needed corporate-style reforms. The governor “focused on finding a way to address redundancies and inefficiencies in the Massachusetts higher education system," a Romney campaign aide told The Huffington Post, and did so by focusing "on outcomes and improvement" and "using his private sector background to find a more effective way to educate Massachusetts students.”

Almost immediately upon arrival, Romney employed Bain & Co. consultants to analyze the state’s public higher education system. Romney joined Bain & Co. as a consultant in 1977 and was named its vice president in 1978. He left the company in 1984 to co-found Bain Capital, a private equity investment firm, where he worked for six years before returning to Bain & Co. as CEO in 1991.

The Bain consultants came back with what the Boston Globe called “a damning picture ... portraying public higher education as a wasteful bureaucracy consuming $1 billion a year with little to show for it.” They proposed a comprehensive overhaul of the state higher education system, including $350 million in cuts and tuition increases and a move toward putting economic development at the center of schools’ missions.

While Romney did not adopt some of the company’s farthest reaching recommendations -- such as closing four schools altogether -- the Bain analysis served as the main blueprint.

The plan Romney put forward called for $150 million in cuts to higher education funding and proposed closing and consolidating campuses and privatizing some institutions. The plan promised to save $100 million through administrative cuts, including smaller budgets for campus libraries, police and back-office services.

Romney's administration also hoped to raise $94 million from a 15 percent tuition increase for state residents and 22 percent increase for out-of-state students. A $44 million increase in financial aid would have offset the hikes. In addition, the governor proposed shutting down the University of Massachusetts’ president's office -- a position held by William M. Bulger, a Democratic giant in the state who presided over the state Senate for 17 years before becoming president of UMass in 1996 and a figure Romney viewed as an impediment to his reforms.

Translating Bain principles into public policy proved simpler in concept than practice, however. At Bain, Romney could gain operational control over a company that he infused with cash. With the Massachusetts higher education system, he butted heads. According to the Massachusetts magazine CommonWealth, neither Peter Nessen, the governor’s education adviser, nor the team at Bain & Co. consulted officials from the state’s public higher education system when crafting the proposal. The state legislature ultimately rejected Romney's plan, and none of his reforms were implemented.

“The analysis, which was conducted on a pro bono basis, looked at ways to preserve the same levels of service for higher education amid the state’s diminished financial resources," Bain & Co. spokeswoman Cheryl Krauss told HuffPost. "Ultimately, the legislature set that analysis aside and used its own rationale for addressing the budget issues of the time.”

Thwarted by the Democratic legislature, Romney still slashed funding for higher education by $140 million, or about 14 percent, as part of deep budget cuts during his first year in office. As a result, student fees at state colleges and universities shot up 63 percent during the governor’s tenure, according to the Boston Globe.

Romney’s opponents branded his tactics as “out of touch." In a report by the Chronicle of Higher Education, Salem State University psychology professor Pat Markunas, also president of the school’s faculty union, declared that Romney and his aides "simply don’t understand the role of public colleges because they all went to high-priced private schools.”

Jeffrey Selingo, who authored the report and now serves as the Chronicle of Higher Education’s vice president and editorial director, wrote in April 2003: "Bain approached the state's higher-education system as if it were a failing business.”

Romney "wasn’t very generous with operating budgets for the campuses, believing in part that they could make up some of it through the consolidations and efficiencies that he sought to create,” recalled Stan Rosenberg (D), president pro tempore of the Massachusetts Senate, in an interview.

Aimes McGuinness, a senior associate with the National Center for Higher Education Management Systems, a group that specializes in strategic decision-making in higher education for states and institutions, described Romney as “a more mechanical technocrat, rather than someone with a particularly ideological leadership.”

“The impression I got from Romney’s time in Massachusetts was a period of maintenance and management of the system, rather than anything particularly dynamic in terms of leadership,” said McGuinness.

Romney’s staff has defended the governor's handling of the state education system. David Driscoll, who served as the state commissioner of education under Romney, attributed Romney's proposals to cut higher education funding to the deficit.

“He came in as a business guy obviously having not been in the public sector. That had an influence in the sense that he came in as a bottom-line guy, and management and finance was the main issue,” said Driscoll. “His first order of business was to balance the books. He would have liked to invest more money, but we didn’t have the money.”

Michael Petrilli, executive vice president of the right-leaning education think tank Fordham Institute, echoed the argument that the governor was helpless in the face of budgetary restraints. “In a time of shrinking resources, as a governor and as a president, you have to make choices and tough calls,” Petrilli told HuffPost.

In addition to balancing the books, Romney moved to revamp the ranks of Massachusetts' higher education structure. Chief among them was an effort to dislodge Bulger from his position as university president.

The friction between the two started when Bulger refused to testify before Congress in 2002 on the whereabouts of his fugitive brother, Boston crime boss Whitey Bulger. Romney took issue with the refusal, arguing that it discredited the university system. In return, Bulger -- who initially kept mum on the governor’s plans to reorganize the higher education system -- unleashed a scathing attack on the proposal at a legislative hearing in March of 2003, attended by 300 public-college employees.

Bulger accused Romney of trying to stage an elitist “corporate takeover” and told lawmakers that under Romney’s proposal, education was “defined frequently as nothing more than job training.”

Romney eventually succeeded in removing Bulger from his post, despite intense resistance from all but one of the university’s trustees. But he lost the larger battle, expending political capital and falling short in his broader efforts to reform the state education system.

Romney would leave office in 2007 with the system he found largely in place -- though shortly before departing, he ignited another fire when he used emergency fiscal power to cut $425 million from the state budget, including $37.8 million for higher education.

“He figured it out and took action so late in his tenure that the changes didn’t go deep or long enough to have the impact he sought," said Stan Rosenberg, the state Senate leader who co-chaired a Senate task force on higher education in 2005.

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