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The Michigan Daily Administration Beat will be conducting interviews with the incumbent and challenging candidates for University of Michigan Board of Regents prior to the November midterm election. This interview is with Democratic challenger candidate Paul Brown. Brown is a University alum, having attended the University for his undergraduate degree and an MBA. Brown also holds a law degree from Wayne State University and clerked for a federal judge in Detroit. He worked for the Michigan Economic Development Corporation during the Great Recession on a program to increase state capital availability, which the Barack Obama administration later funded nationwide. He now works at eLab Ventures, a fund that invests in early-stage technology startups and health care. He lives in Ann Arbor with his wife, Emmy-nominated actress Nicole Forester, and two children.
The Michigan Daily: What led you to decide to run for a position on the Board of Regents this year?
Paul Brown: The University of Michigan changed my life in many, many ways for the positive. But since our Republican opponent has been on the board, tuition has increased over three times. Put in cost of actual living and education, and it’s closer to six times. The percent of African American students has decreased by 50 percent. And — I think it was 2017 — the number of Michigan students at the University of Michigan is less than 50 percent. And it used to always be no less than two-thirds. And so, those are, I think, very, very bad trends that coincide almost perfectly with my opponent’s tenure on the board. As they say, I don’t think we’re living up to Thomas Jefferson’s words that are etched into the facade of Angell Hall, which is “(Religion, morality, and knowledge, being necessary to good government and the happiness of mankind, schools and the means of education shall forever be encouraged.)” And another troubling stat is the number of students who come from families with a family income over $250,000 a year has doubled in the past decade. And so I think we’re failing our mission of an uncommon education for the common man or woman.
I was lucky enough to know Steve Jobs before he passed away. I had a few short one-on-one sessions with him. One of the things he said that I thought was very profound — and he said it publicly — was that all of these constraints and bureaucracy and rules that seem to constrain us from achieving what we want for our society or institutions were just created by men and women no smarter or dumber than we are, and therefore they can be changed. And so when Board members say “It’s complicated. It’s very difficult. The budget has a lot of constraints. Admissions policies have a lot of constraints,” that just screams a lack of creativity and the courage of their conviction. And I know — at least the Democratic members of the Board — yearn for solutions to those problems because they see them as problems as well.
TMD: Can you talk a bit about some of the ways you’d like to change the Board of Regents and the way it approaches these problems if you’re elected?
PB: There are obviously very specific solutions and then broader themes. My running mate, Jordan Acker, and I released a 10-point ethics and transparency platform which our Republican opponents agreed with. My response to that was, “You’ve had 24 years on the Board to implement these things. I think it’s time to put someone on there that will actually do it.” They fall into three categories. The first is transparency. I believe that Board meetings should be held in the evenings. They should be simulcast. The amount of work that is done and decision-making that is done out of the public eye needs to be moved to public session. Ethics-wise, those fall into both how we handle the endowment, which I think has had amazing success and great management, but there have been some activities that give the appearance of what I’m sure you’ve read about in all the papers. And as a public institution we have to be above reproach — not even have the appearance of impropriety. And so for those funds that we consider investing in, we should either not if they’re major donors to the University — which would unfortunately eliminate some of the greatest funds literally in the world are run by U of M alums — and so if we don’t have a total prohibition of investing in those funds, then have an outside third party vet them for any conflicts or if they meet our standard. And then the next is on elections. We have an opponent that gave back $25,000 of campaign donations from large vendors or fund managers that have University of Michigan money. That doesn’t meet the test of an appearance of impropriety. And so I believe that absolutely the regents have always had the best interests of the University at heart. But again, as a public institution, we have to be above reproach. And board members cannot take money from vendors or managers that we have money with, and if they have in the past, they need to disclose that relationship.
TMD: You’ve made your union membership and your experience on the Huron Valley Area Labor Federation board a significant part of your campaign. What about your experience prepares you well for a spot on the Board of Regents, and what from those experiences do you plan to take into account when you’re addressing these problems on the Board?
PB: I think I’m unique in this election of all the candidates because of my board experience. I’ve sat on many public and private, large and small boards. They include the Huron Valley Labor Fed board. I’m chair of the Michigan History Foundation. I’m past board treasurer of the Michigan League of Conservation Voters board, not to mention several startup and public company boards. And I think that’s critical. The University of Michigan is now one of the largest employers in the state with over 45,000 employees, basically a statewide health care system and three campuses. And the problems are complex, and you need sophisticated management to achieve success and avoid disaster.
In terms of my union membership specifically, we have a large union employee base here, so I think that I bring a unique perspective to the board in that I am the only one that would have taught classes here at Michigan — I teach a course in the School of Engineering — and the only one that is a member of one of the University of Michigan boards. And when it comes to contract negotiations or designing the budget, just understanding the pieces that help run and make this university successful, I can’t imagine not having that experience and being on the board.
More generally, again, I think it’s important that you have board experience before you sit on such a large, complex institution’s board. Not to bring up a bad subject, but for instance the Nassar tragedy at Michigan State I lay completely at the feet of the Board of Trustees at Michigan State. And I hope and believe that the U of M board would avoid such a thing. But just for background, you have many roles as a board member. Two of the most important are, number one, whether you’re running a college or a car dealership, you have to identify the few things that can kill your institution. And when you run a school and a health care system and a sports program with young adults, sexual assault better be on that list that could kill your institution. And so whatever’s on that list, you create policies and programs to make sure it never happens, and God forbid it happens once, that issue gets raised to the board level immediately and tracked daily until it’s resolved and you’ve figured out how to make sure it never happens again. So when the board at Michigan State says “I didn’t know” or “I didn’t know it was this bad,” that’s an indictment on themselves. They obviously didn’t understand their role or how to design policies and procedures to prevent it and to mitigate the damage once it happens once.
The second large role of the board for any institution, especially for the University of Michigan, is to create a culture. A culture that cares more about the students than the administration. A culture that cares more about the athletes than the coaches. And a culture that cares more about the patients than the doctors. And they failed at that at Michigan State. And I fear that in some ways our culture here at Michigan is not focused on the right things sometimes.
TMD: Can you elaborate on that a bit?
PB: I’ve obviously been around the University for my whole life and around the Board for my whole life. And I am seeing a culture that seems overly focused on revenue, whether it be from athletics or out-of-state student tuition or endowment fundraising. Much of what I see is so focused on those three things that we forget our core values which is we’re here to serve the students and their families and the voters and citizens of the state of Michigan. And anything that takes us away from those three focuses needs to be carefully considered.
TMD: Some of these ideas that you’re talking about and these problems that you’ve identified, like affordability and representation of different minority and socioeconomic groups, are affected by a lot of policies in the state government related to education funding and education policy in general. What action specifically do you think the Board of Regents should take, if you are elected, to tackle these problems?
PB: You brought up several different issues, and I think they all need to be attacked in order to solve the problem. So one, you talked about statewide education policies and trends. This will be political, because as a statewide elected official — there are very few in this state, and the Board of Regents is one of them — that’s a pretty large soapbox. And the University of Michigan fortunately has a very good reputation in the state, on both sides of the aisle and citizens across the state. And I think it’s incumbent on the Board to use that position to advocate for education policy that they think helps this university and its mission. If that means going up to Lansing and going to your across-the-state rotary club lunches to advocate for investment in higher education, the regents should be doing it. Now we have one of the best government affairs offices at this university, but it’s not good enough to just send our skilled government affairs lobbyists. The regents themselves, who are elected by the people of the state of Michigan, need to be out there all over the state advocating for education. And I believe that advocacy should not just be for the University of Michigan but higher ed all over the state at K-12 spending. And that’s what I would do if I’m lucky enough to be on the board. I would be an advocate all over the state. And people may be sick of hearing me talk about it but I think that’s our role.
So that’s on the policy side. Specifically on the University of Michigan programs, in terms of money, there are a few ways to tackle it. Number one, when you look at that growth in tuition, it outpaces everything, even the growth in health care, which we know is absurd. So we need people on the Board — I’m a small business owner, I’m an MBA, I have a law degree — who have the expertise, and I’ve done this in my companies, to go in line item by line item and say, “Where is this cost growth coming from, and can we attack it through efficiencies or outright cutting in a smart way that doesn’t harm the University?” Number two, we have endowment that has now decreased the draw from it by over a percentage point in the incumbent’s tenure. You do that because you expect the growth of the endowment to be low, so you don’t want the endowment to shrink. So if you expect the returns from the endowment to be low, you decrease the draw from it. Well they were exactly wrong. The endowment has had an unprecedented growth rate, and we need to increase the draw from it. That will put tens of millions of dollars into the general fund. And that alone will go a long way into decreasing the need for tuition dollars or directly to scholarship programs.
The other is the University has had a surplus for a decade equaling hundreds of millions of dollars per year. So what that tells me is they are budgeting too conservatively. They have not understood their revenue and cost structure well enough, so they are bringing in more money than they need. There are two ways to avoid it. You can either budget more accurately, which will decrease the need to get revenue through tuition dollars. Or — this is revolutionary — you can rebate to students’ tuition dollars that were not needed, i.e., overcharged to meet the obligations to the University. Now that will make the CFO and some of the Board of Regents’ heads spin, but you can do it in a responsible way. The University budgets over a five-year period and you can do a trailing five-year average of surpluses and rebate the surplus to the students. That’s over and above any rainy-day fund that you want to maintain. That’s over and above any steps you need to maintain your excellent AAA bond rating, which we must do. But even then, we have a huge surplus, which was taken from the students through tuition unnecessarily. And that can be rebated back. And we have the same thing in the health system, where it runs a $100,000,000 surplus, which in its overall budget is not huge, but again at some point after all those steps have been taken to ensure fiscal health, you could profit-share with the nurses and the employees.
So that’s the fiscal side of what I think could be done, which I think would be revolutionary in this country. The other, when you look at diversity on campus, there are several things which I’m stealing from other programs in the country. The University of Texas has a program where in-state students at their local high schools, if they got in the top 10 percent of their class, they’re automatically admitted to the University of Texas-Austin. That’s academically; they still have to meet the other criteria. An unintended consequence of that program is you have a large number of students who are not prepared to meet the rigors of the academic standard here, and they had a spike in dropouts and failures (at Texas), which didn’t help. To avoid that unintended consequence, you can take several steps. I would propose or support a program that let in students based on the straight-line percentage in their class, which would overnight give a perfectly representative class, geographically, to the state, which almost mirrors every other type of diversity — not perfectly, but you’d achieve diversity in almost every other way pretty well with that standard, and it would stand up to constitutional scrutiny, which some of our other admissions policies have not in the past. But to avoid the unintended consequence of a high failure rate, you can take several steps. Number one, for those students who the University deems as not prepared, they can come in for a July and August program. And the University has a small program now, but that could be greatly expanded. In other words, if we truly believe in diversity, we have to put our money where our mouth is and have services on campus for those students to succeed while they’re here.
There may be some students under that admissions policy where even two months of prep work is not enough to make them succeed. For those students, I would propose that they are admitted to U of M – Ann Arbor as juniors. And all they would have to do is go to either Flint or Dearborn (campuses), maintain a minimum grade point average in a program that is designed to prepare them. And then they could transfer as juniors and get that Ann Arbor degree. Another unintended consequence of that is we need more enrollment at Flint and Dearborn, and that program might increase their enrollment. So it would have a great benefit to those two campuses, which really need higher enrollment. The other is for those students, even if they get into U of M – Ann Arbor, could say, “I’m going to live at home for my first two years. I’m going to stay in Flint and Genesee County. I’m goin to go to Flint or Dearborn and save a bunch of money, and I know relatively safely that I can transfer to U of M – Ann Arbor.” Now if they get into Ann Arbor but the tuition and cost of living will be a struggle, they can’t rationally say, “Well I’m going to turn down the Ann Arbor acceptance, go to Flint, and hope after two years I have virtually straight A’s” — which is what you need at Ann Arbor now to transfer. Under my design, you could do that and save a bunch of money. So those are just a few of the things that I think can be done. So when I hear my opponents say, “Well, there are too many constraint around admissions policies and too many constraints around the budget for us to really make much of a difference,” I patently disagree with that statement.
TMD: Can you talk a bit about your campaign and the challenges of campaigning to such a large electorate?
PB: Yeah. I joke that we have all the geography to cover of the important candidates, like the governor, but none of the resources. … So we have no staff, virtually no money, yet need to try to make an impact on the electorate statewide, which is almost impossible. Not to mention we have an incumbent who has personal wealth and resources that we don’t have. So it’s really tough, and we rely on coattails to get elected, really.
The Republicans’ removal of straight-ticket voting is a cynical attempt to hurt Democrats. I have many Republican friends, and they say, “Republicans have the crazies and Democrats have the lazies.” And unfortunately, and I don’t believe them, but they put students in that group. They know that young people overwhelmingly vote Democratic, but they overwhelmingly don’t vote. And that’s especially the case if they have to get there and vote a whole ballot down to the Board of Regents, which, even if you go to the University of Michigan, you may not know exists and now know what they’re talking about on the ballot. So the Republicans’ cynical belief is that young people won’t vote, and if they do vote, they won’t vote all the way down to the regents’ race. So we need that to change because we can’t prove them right.
TMD: Do you have confidence that, should you be elected, the other regents will be equally enthusiastic about pursuing these reforms?
PB: I do. I know most of them personally. If we’re elected, we’ll have a majority Democratic on the Board. And I know them all to desperately want to come to solutions to the cost and diversity issues. So I hope to bring those solutions to them, and I’m confident they will support them once I do.