Vermont's Merger Map

The Vermont State Colleges’ move to fold two of the state’s northern colleges into one institution reflects increasing interest in mergers throughout higher education, particularly as many state systems continue to struggle with budget crunches and declines in enrollment.

It also shines a light on the difficult issues raised by combining institutions. Faculty members at the affected institutions worry about their campuses’ identities. Administrators must walk a difficult line between using mergers to drive cost savings and repositioning colleges to recruit students in the future. They also must find ways to persuade faculty members to buy in and win support from communities and politicians -- or risk having the plans derailed.

The Vermont State Colleges Board of Trustees decided last week to consider a combined administration for Johnson State College and Lyndon State College, two small institutions separated by roughly 43 miles of state highway. Chancellor Jeb Spaulding now has slightly more than two months to meet with campus stakeholders, ready a report and present a transition plan. Trustees expect to vote on a resolution to combine the colleges at a Sept. 29 meeting. If the vote succeeds, the colleges would move toward operating as a combined institution starting in July 2017.

Spaulding has billed the proposed move as offering the best of both worlds -- a change that would keep the colleges’ separate campuses and identities while giving them the cost savings of a single administration, the efficiencies coming with greater economies of scale and the resources students have available at a larger institution. But he also acknowledged any talk of combining colleges brings challenges.

“There certainly will be people that want to ensure that we’re doing this for the right reasons and that we’re not going to trample on the identity of the campuses,” Spaulding said. “There is a local feel, a strong sense of community, in that part of the state. It’s something we’re going to have to make sure we take into account.”

Recent history shows huge variations in results when public institutions pursue consolidations, whether those consolidations are closing campuses or combining presidencies. The University System of Georgia is widely seen as far ahead in aggressively and successfully consolidating. It has merged several of its campuses, most recently combining Georgia State University and Georgia Perimeter College in January. The move gave it a record of consolidating 12 of its institutions into six under a campus consolidation push dating to 2011. The system now has 29 institutions.

But the University of Maine System struggled with the idea of closing campuses, moving instead to centralize many operations last year.  And some efforts to unite president positions at the State University of New York several years ago met stiff resistance -- a state legislator took credit in 2011 when SUNY administrators killed plans to combine the presidencies at Canton and Potsdam campuses.

The New York system followed through with plans to install the president at SUNY Delhi, Candace Vancko, as head of SUNY Cobleskill. But it reverted back to separate presidents in 2013. It also had the head of SUNY Institute of Technology, Bjong Wolf Yeigh, lead Morrisville State College for a short time but ultimately moved back to separate presidencies at those institutions.

In Vermont, Spaulding has avoided calling the proposed consolidation between Johnson State and Lyndon State a merger. He’s instead labeling it a unification that would have the campuses keep the Johnson and Lyndon names. Current Johnson State President Elaine Collins would become president of the combined institution. The unified institution would have a new overall name, which has yet to be determined.

Also yet to be determined is where the president’s office would be located, according to Spaulding. The president only regularly appearing on one campus would not be acceptable, he said.

In some ways, the timing would seem to be right to pursue a merged administration. Lyndon State’s president, Joe Bertolino, is leaving to become president of Southern Connecticut State University in August.

Convenience is not the primary driver, however. The Vermont State Colleges need to make changes with the bottom line in mind, Spaulding said. The system has for more than a decade been trying to grow connections between campuses to cut redundancies and administrative expenses, he said.

“We are small and tuition dependent,” Spaulding said. “We’re trying to make sure we’re not asleep at the switch.”

Enrollment has slipped at both Johnson State and Lyndon State in recent years. Head count fell 18.6 percent at Johnson State between the fall of 2011 and the fall of 2015, from 1,859 to 1,514, although administrators expect enrollment to rise this fall. Head count at Lyndon State fell almost 11 percent over those five years, from 1,422 to 1,266. At the same time, the Western Interstate Commission for Higher Education has estimated Vermont high school graduation peaked in 2007-8 and will fall by nearly 2,500 per year, 27 percent, through 2022-23. And Vermont has traditionally struggled to keep students in state.

At the same time, the Vermont State Colleges have experienced financial struggles. The five-institution system posted a net operating loss of $60.7 million in 2014 and $56.7 million in 2015. The budget line comes before some major revenue sources like state appropriations and federal grants. But even factoring in all other revenues and expenses, the system’s net position dropped by $9.4 million in 2014 and $10.3 million in 2015.

Johnson State and Lyndon State both have put budget cuts and tuition increases in place, according to Spaulding. Yet they’re expected to run deficits in the upcoming year.

“Lyndon is going through an exercise right now that has nothing to do with the unification -- to trim down its budget by $1 million next year to try to make sure it is operating in the black,” Spaulding said.

Among the other drivers pushing the Vermont system to change was demographics. The number of high school seniors graduating in the Northeast is expected to fall, cutting the available pool of students to be recruited. Analysts have also predicted state appropriations across the country will not keep pace with rising institutional expenses.

Vermont’s governor and lieutenant governor are supportive of the unification idea, Spaulding said. The state system has also been making its case to legislators.

Efforts behind the consolidation date to January, when a long-range planning committee asked Spaulding to look at alliances between two sets of two institutions in the Vermont system: Johnson State and Lyndon State, as well as Vermont Technical College and the Community College of Vermont. He talked with system leaders in other states who had tried different merger models within their own systems, including Georgia, Maine, Minnesota, New Hampshire and New York. Ultimately he decided to move forward with the administration plan for Johnson State and Lyndon State after determining the community college and technical college operate on models that are too different to justify any consolidation at this time.

Consolidating the colleges’ administrations aims to create a larger, stronger institution that’s better able to recruit while giving students access to a wider curriculum and more faculty, Spaulding said. The benefits go beyond the balance sheet.

“What we’re looking at here is, yes, we will save money,” Spaulding said. “But we’re also looking for ways to strengthen our recruiting ability by telling students that you can get the best of both.”

Plans call for each campus to keep their own sports teams and mascots. But concerns over campus identity run deeper than athletics. Johnson State is known as a liberal arts college and has heavily emphasized its recent membership in the Council of Public Liberal Arts Colleges. While Lyndon State is also a liberal arts college, it also emphasizes professional studies.

Faculty members have been concerned about that issue. Jay Shafer is an associate professor in atmospheric sciences at Lyndon State. The unification proposal was not a surprise, but it does bring some uncertainty, he said. The fact that the president from liberal arts-leaning Johnson State is slated to lead both campuses contributes to questions.

Still, Shafer believes the college’s future strategy needed to be examined.

“The thing is, we’re just cutting, cutting, cutting, and it seems that we’re in this place of austerity,” Schafer said. “It’s clear that something more dramatic needs to happen at many levels.”

Johnson State’s president, Collins, acknowledged that helping faculty members and employees through the ambiguity and change will be important.

“We’re going to need to be able to communicate a clear vision of the future,” she said. “It’s going to be important to be really inclusive in terms of the decision making.”

The biggest concern heard from Johnson State faculty members is how the change will affect their programs, Collins said. That’s also a concern at Lyndon State, according to Nolan Atkins, interim academic dean at the college. Atkins will become Lyndon State’s interim president when Bertolino leaves for Southern Connecticut State next month.

Sorting out the academic details will take a great deal of work, Atkins said.

“We’re different enough where we have programs that are unique to both campuses, and we have programs on both campuses,” he said. “Some of them are well enrolled, some of them are lower enrolled. So the conversations by program are going to be very different.”

Still, staff members likely have more apprehension about the future, Atkins said. They could be worried about staff jobs being cut during the merging process as a way to save money.

At least some staff members are expressing hope, however. Tight budgets have meant lean staffing in recent years, said Sandra Noyes, a staff assistant for the Humanities and Writing and Literature Departments at Johnson State, who is the Vermont State Colleges unit chair and Johnson State College campus chair for the Vermont State Employees’ Association. The union does not have a position on the consolidation plans because they are so new, Noyes said. But she hopes the changes could alleviate staffing crunches.

“With the low funding from the state, we have really had to double up on jobs or take extra duties,” she said. “They haven’t filled positions. It’s going to relieve a lot of burdens of this extra work.”

Funding and campus identity were also on the mind of Julie Theoret, a professor who chairs the Johnson State chapter of the Vermont State Colleges Faculty Federation and is the VSC Faculty Federation treasurer. Johnson State has been attempting to reduce costs and raise revenue, she said in an email. But that has led to layoffs in recent years, which she does not want to repeat.

“This latest idea, as I understand it, has the ultimate goal to decrease overall costs while actually increasing services and opportunities for our students,” Theoret wrote. “At this point in time, I am not 100 percent convinced that a unification can be done, but I am willing to listen and be a part of the conversation. Any plan that gets put forward must demonstrate the benefits to both Johnson and Lyndon students and make both colleges, as well as the entire VSC system, stronger.”

The Vermont State Colleges are in a situation that is ripe for some type of consolidation or merger between Johnson and Lyndon, said Rick Beyer, a former president of Wheeling Jesuit University who is the managing principal of AGB Institutional Strategies, a consulting firm that works with colleges and universities on new business models including affiliations and mergers. Beyer has worked for Vermont State Colleges. He sees programming at the two institutions as complementary.

More broadly, the climate is ripe for more mergers and consolidations in higher education, Beyer said.

“I think this trend will continue,” he said. “I think that there will be more -- a lot more collaboration, a lot more mergers -- that will be taking place both within public and private systems.”

Larry Ladd, the national director for Grant Thornton’s higher education practice, agreed. State institutions are more likely to follow through on plans to consolidate, he said. Even though legislators may instinctively protect campuses in their districts, state institutions still have to be publicly accountable for how they spend money.

A question is whether leaders can successfully make the case that a consolidation is in the best interest of the institutions, state and students.

“That’s the challenge for presidents and administrations, to paint the picture of what the future should be,” Ladd said. “You save money on administration. Hopefully you are reallocating that money to academic programs, or you’re preventing cutting academic programs. Nothing makes a better case to the state Legislature than showing you are handling their money responsibly.”