Speaker Kirk Cox addresses Virginia business leaders on talent, affordability, and performance-based accountability in Higher Education

September 24, 2018

Virginia House of Delegates Speaker Kirk Cox addressed a gathering of Virginia business leaders at the GO Virginia Foundation Board’s annual meeting, outlining a vision for higher education in the Commonwealth. Cox emphasized the need to create a talent pipeline in Virginia, improve affordability through meaningful and tangible reforms, and promote accountability based on performance. The full text of Cox’s remarks can be found online here and below. A PDF of the remarks can be found here.

Good afternoon.  I appreciate you all being here.

I especially want to thank Tom Farrell and the GO Virginia Foundation for making time on your annual meeting agenda for me to share some thoughts, and McGuireWoods for hosting us.

I am here today to propose a new partnership.  Not a single partnership organization, but a whole new way of working together to get things done for Virginians …

  • A partnership with business, education, and government collaborating on our most important economic priorities, especially the talent pipeline.  
  • A partnership to ensure affordable access for all Virginians to a great education, a great work-study experience, and a great job.
  • A partnership based on performance, with public funding tied to measurable outcomes, with transparency and accountability to the owners of Virginia’s government, and with a business standard of performance.

Those are the three key elements of the partnership I am proposing—talentaffordability, and accountability based on performance—and I’ll comment on each of them this morning.

But let me first say a word about why I am here.

I wanted to meet with you because so many of us have worked together successfully on important initiatives, like the Top Jobs higher ed legislation in 2011 and more recently on GO Virginia.

I know this group can get things done in this Commonwealth when you put your mind to it.  And what we need now is your leadership in getting the larger business community to step up and get fully engaged on our workforce and economic initiatives.

We’ve seen progress on that front through the Chamber and its Blueprint process.

We’ve seen it in each region, as businesses have gotten involved in GO Virginia.

But if we are going to do the things I am proposing today … if we are really going to move the needle on talentaffordability, and performance-based accountability … then we need to take it to the next level and get businesses throughout Virginia actively engaged, contributing both their know-how and financial resources.

I know the people in this room can help get that done.

But there is another reason I am here—this is my passion. 

  • You don’t teach young people for 30 years and then lose interest in them when you retire as a teacher. 
  • You don’t serve as chair of the higher education subcommittee of Appropriations and accomplish all we have together, and then turn it off like a switch. 

I believe deeply that education is good work … noble work … and there’s no higher calling than giving all young Virginians the chance to develop their talents and pursue their dreams.

As Speaker, I will always be one of education’s biggest advocates.  And on higher education, which is the passion of many of you here, I will always be your committed partner.

But part of being a committed partner is being a candid partner.  And so I’m going to very direct with you today, and I hope you will help me deliver an equally candid and direct message to our friends on college campuses.  Because here’s the truth:  If our colleges and their leaders don’t recognize the shift in public opinion on higher education … if they don’t understand how the populist message is resonating … and if they don’t come to the table seriously on the points of greatest concern—affordability and accountability—then it is very likely that the criticism will reach critical mass, and it will be impossible to maintain the progress we have made.

I believe higher education in Virginia is at a pivotal moment.  We have never needed our higher ed system more than we do now … because it is the key to the talent pipeline, and the talent pipeline is the key to our future.  But, at the same time, higher ed’s political position has never been shakier.  At least in my recollection, the bond of trust between the people and our educational institutions—and the trust between our colleges and elected officials—has never been more at risk.

So that is why I am here today asking your help:  because the business community is an indispensable partner in addressing these related issues of talent, affordability, and performance-based accountability.  And there’s no time to waste.

The Talent Pipeline:  A New Way Forward

Let me begin with the first of those three topics—the talent pipeline—and make my central point right up front:  Virginia needs a whole new way to tackle the issues of talent, innovation, and jobs.

For those of you involved in GO Virginia, this will sound familiar.  Because at the heart it is creating a new and effective partnership between business, education, and government.

The old way of doing things—and here I get to use my first baseball analogy—is best described as the “build it and they will come” approach.

We design and fund our K-12 programs over here.  We set up our higher ed programs and curriculum over there.  We do a little bit on early childhood over that way.  And we have dozens of different workforce programs tucked away in all sorts of places.

Much of this is very good work, but it occurs in silos.  The educational leaders at these different levels rarely work together, let alone partner productively with business.

We are educating and training young men and women, and often doing it very well.  But we are not doing a good job of connecting the dots between what these talent development programs are teaching and what it takes to get a good first job—or a series of different jobs over the course of a career—in this fast-changing economy.

We are building the talent in hope the jobs will come, and it is just not working well.  At least it is not working well enough, and here’s the proof: 

  • For several years now, we’ve been among the slower growing states in the country.  And what we hear from Virginia businesses, large and small, is this:  The main reasons their business is not growing is they can’t find the qualified workers.
  • There’s also the disastrous brain drain we’re experiencing.  Many of the young people we’ve educated are not finding good jobs here, so they’re leaving for better opportunities elsewhere.  

Think about it:  Something that never happened before in Virginia (at least not since they started collecting the data) now has happened here for 4 straight years:  a net loss of talent to other states.

This disconnect between talent development and job opportunities has a very negative impact on our state and its people.  And it is not just the impact on businesses and economic growth—it’s also the human cost:

  • Think of the wasted potential of young people, especially those who don’t come from traditional college-educated families, and who either can‘t afford the education or can’t find the jobs to match their skills.
  • Think of the impact on families when a son or daughter has to move away—not just from the country to the city, but from Virginia to a distant state—in order to get a good job. 

I don’t have any grandchildren yet, but when I do I’d like to see them once in a while—all of us want that.But splitting up families is a direct consequence of being a slow-growth state and a net-loser when it comes to talent.

The “build it and they will come” approach is not only ineffective.  It costs too much … is too resistant to innovation … moves too slowly to keep up with the fast-changing economy … and, frankly, is too old-school and uncool to appeal to eager, creative, tech-savvy young people.

Instead of the “build it and they will come” state, we need to be: 

  • The “build strong bridges from school to jobs” state …
  • The “prepare resilient graduates for lifelong success and service” state …
  • The “provide an affordable pathway for everyone in a growing economy” state.

Or, to put it even more simply: Virginia needs to deliver an affordable education that leads to a good-paying job in a growing economy

We can be that kind of state—the Top State for Talent—only if we forge a real partnership among business, education, and government all across the Commonwealth.

The need for this public-private partnership should be obvious.  By its very nature, the talent pipeline is a pipeline that runs from the largely publicly funded and managed education sector to the largely privately funded and managed employment sector.

So instead of politicians and educators designing education and training programs with business on the bench, let’s get business people on the field playing an active role in helping to design practical pathways from school to jobs.

The fact is, on all of our talent and economic initiatives we need business, education, and government working together as a team … crafting the programs, funding them, carrying them out, and transparently reporting the results to taxpayers and consumers.

Partnering in Practice

Let me tell you what this kind of partnership on talent can mean in practice.

It is a multifaceted opportunity, but I will touch on four key aspects of the talent pipeline:

  • the competition to recruit talent …
  • matching talent with job opportunities …
  • preparing the talent needed for key growth sectors of our economy …
  • and, the development and deployment of our under-utilized talent.

First, the competition for talent. 

We need to convince talented young Virginians to stay in the state and get their degree or certificate here.  And we also need to market our top-ranked higher education system to many more talented out-of-staters.

We need to be a magnet for talented Virginians and non-Virginians.

And once we recruit, educate, and train them, we need to connect them to good jobs right here in the Commonwealth, so they stay.

One way we can do that is by dramatically increasing the work-study opportunities—internships, coop programs, and so forth—that are available with Virginia companies.

This will be a top priority of mine in the coming session.

  • For a student, an internship provides work experience and a foot in the door toward a full-time job, plus it helps make college affordable.
  • For an employer, it provides a pipeline and testing ground for potential employees. 
  • And for Virginia and our economy, it is a way to get talented degree and certificate holders to stay here.  It gets them early onto what President Sands at Virginia Tech calls “sticky” pathways—into good job opportunities right here in the Commonwealth.

Now, this seems like an obvious tactic, so surely a leading state like Virginia is really good at it—right?  Actually, no.  According to the WalletHub financial website that ranks states based on student aid and work-study opportunities, Virginia ranks a dismal 42nd out of 50.

This past session, through the work of Delegate Rush, Delegate Ransone, and Senator Dunnavant, we took some modest first steps toward turning that ranking around.  We authorized use of financial aid funds for internships … linked some student scholarships to post-graduation Virginia employment in the cyber field … and passed a pilot program for incentivizing higher ed internships with Virginia employers.

But to move the needle on internships and work-study on a large statewide basis, we need your help in designing something practical and scalable that works well for both businesses and educational institutions.

And then after we design the program, we need the state’s major business organizations helping to promote it to so that large numbers of Virginia employers sign on—not only because it’s their civic duty, but because it helps them grow their business.

By the way, that part about “promotion” is very important, and it goes beyond internships:  We need to start branding Virginia as the place where the best and brightest come to get a great education in a top-ranked higher education system and then land a great job in a dynamic innovation economy.

I’m fine with Virginia being for lovers.  But we’d do more to secure a great future for our children and our state if we drove home the message nationwide that Virginia is for Talent and Innovation.

This branding effort cannot be done by government alone, or by our educational institutions alone.  After all, the pitch is not just “come to or stay in Virginia for a great education.”  The pitch is “here you’ll get a great education that leads to a great job.”

So, that’s the first thing we need to partner with business on—competing for talent.

Second is matching, or aligning, talent to job opportunities.

Here there are multiple needs, including:

  • Getting businesses to work with high schools and colleges on curriculum alignment so that graduates emerge job-ready.
  • Gearing our new workforce credentials initiative through the community college system so that it addresses the unmet employer demand in each region.
  • Creating and marketing industry-specific pathways from school to the workplace,
  • And providing easily accessible, user-friendly online information about internship and job availability across Virginia.

Third, and closely related, is partnering for talent development in high-demand sectors.

Stated simply, we will not attract major business investment and growth here in Virginia unless we have the talented workforce that high-growth sectors of the economy require.

And when that major investment does come, we need to be able to ramp up the education and training programs fast.

  • This means working with public and private providers of education and training to remedy critical existing shortages, such as in healthcare and IT, that are constraining growth in key sectors.
  • It also means strategic workforce development targeted at the sectors in the Virginia economy that present our best opportunities for growth, such as the new Cyber X (“Commonwealth Cyber Initiative”) initiative crafted by Appropriations Chair Chris Jones. 
  • And we need to continue to support GO Virginia and the effort to fill the critical workforce needs identified in each region, whether they are in the middle skills and trades, or in jobs that require undergrad and advanced degrees.

These are the very things that many folks in this room are currently working on—not only strategic workforce and talent, but also the work through VRIC on new business startups and research commercialization.

I applaud your efforts … and we need more business executives putting their shoulders to the wheel like you are.

A fourth priority for partnering concerns our under-developed and under-utilized talent here in Virginia.

In the 2011 Top Jobs legislation, we put Virginia on course to award 100,000 more degrees by 2025, focused in the high-demand STEM and healthcare areas.

SCHEV’s version of that goal it to be the “best educated state” by 2030 through more two- and four-year degrees and more industry-recognized credentials.

We’ve made good progress, but we said from the outset that the only way to achieve these ambitious goals is to reach beyond traditional college-bound student populations.  And that means conferring degrees and credentials on returning veterans … adults with partial college credit … working adults who are retraining for new careers …. and first-generation and under-represented student populations, especially from distressed rural and urban areas.

For many of these people, young and old, online programs provide an educational lifeline that did not exist even a decade ago.  And we have taken steps, such as the Online Virginia Network, to increase these opportunities.

We have one the best higher ed systems is in the country, and there is no reason for us not to be the best in this online space as well.

We’ve also been focused on our veterans because they bring skills and expertise that, with the right training and support, can be transitioned into high-value post-service employment.

There is much more to do in each of these areas.  And here, too, there is a crucial role for business partnerships.  Because the farther away you get from the traditional, residential, full-time student model, the more necessary it is to have a cooperating employer and/or the connection to a waiting job opportunity.

If time permitted, I could go on about several other areas where business partnerships are crucial—research, K-12, and early childhood education, to be specific—but let me just say that we in the House are eager to work with you on these items, too.

  • We’ll be looking forward, Dubby, to the VRIC task force recommendations on next steps in research and new business startups.
  • In the K-12 space, I have been talking with Jim Dyke, Barry DuVal, and others about standing up a K12-business coalition similar to what you all have done for higher ed, and I really would like to work with you on that.  We need business helping us address the teacher shortage, expand career and technical education, provide internship opportunities for high school students, and other key issues. 
  • On early childhood, which is near and dear to many people in this room, I see an opportunity for a public-private initiative that provides vouchers to parents, and lets them choose the best program for their children. 

So let’s look for opportunities also to work on those additional talent pipeline items in the days ahead.

Higher Education Partnership Agreements

I’ve stressed the need for partnering with business on the talent pipeline, but there is another crucial issue:  how to forge a stronger and more effective partnership with our higher education institutions.

The key, I believe, is crafting institutional partnership agreements with each school on important initiatives related to talent, the economy, and student outcomes.

As I said last year to both the Council of Presidents and the Higher Education Summit, a core strength of our higher ed system is that individual institutions have grown up entrepreneurially, developed their own strengths, created their own niches in the marketplace, cultivated their own strategic partnerships with business, and so forth.

Some stress liberal arts preparation, which helps develop critical-thinking, problem-solving leaders and good citizens.  Others focus more on specific job-skills preparation.  And many serve both of those vital missions in creative ways.

In much the same sense that every region is different, each of our higher ed institutions is different—and each has the ability to contribute something different to Virginia’s major talent and economic development initiatives.

These partnership agreements should not be “boil-the-ocean” comprehensive agreements.  They should focus instead on big-ticket, high-impact items, especially those related to the talent pipeline and to state and regional economic development.

They should reflect a realistic and practical partnership, which means they should spell out (1) what the school is going to commit, (2) what the state is going to invest, and (3) how identified business partners are going to contribute.

These agreements also should be vehicles for improving college affordability in a tangible and meaningful way, and for measuring and rewarding performance, the two other core elements I want to address today

Affordability for All Virginians

Let’s turn then to affordability, and begin by acknowledging that this is a gateway issue.

We can have the best colleges in the nation and the greatest talent recruitment, retention, and training programs in the world, but it won’t matter if students and their families can’t afford to access them.

And, as we all know, higher education clearly has an affordability problem.  There is a combination of causes:  institutional operating models and spending practices; state budget reductions and unpredictability; federal subsidies; the student appetite for amenities; market forces—the list goes on.

I talked about this at last fall’s Higher Ed Summit, and I encouraged us to move beyond the usual finger-pointing and get serious about solutions.

We don’t need more people playing politics with the price of education, but we also don’t need people with their heads in the sand, pretending the problem doesn’t exist.  We need people partnering in practical ways to bring the price of education down!

In the Top Jobs Act seven years ago, we took a step forward by establishing an interactive six-year planning process so that the state and colleges were on the same wave-length when it came to spending priorities and funding needs.  But, according to a recent House Appropriations analysis, the tuition growth rates at more than half of our Virginia higher education institutions have been greater than necessary to fund their own six-year plans.

So either the plans are not very accurate, or the schools are spending more than they need, or both.

This is why I say some “tough love” is needed in our dealings with the colleges.

The answer plainly is not one-size-fits-all freezes, caps, or other unfunded mandates.  Those are political slogans, not solutions.  And our higher education system is far too valuable an asset to this Commonwealth for us to endanger it with such superficial and shortsighted approaches.

But, if the higher education institutions do not come together with the state government and the business community to address affordability in a meaningful and tangible way … if they do not support common-sense reforms like the bill passed by the House of Delegates last session to allow public comment before raising tuition … then I fear soon there will be little anyone can do to stop a wave of policy proposals along those very lines.

And, perhaps even worse, the public will continue to lose confidence in our institutions of higher education.  The recent finding by Pew Charitable Trusts that 61% of Americans think higher education is headed in the wrong direction should be a wake-up call for everyone.

The truth—and we all know it—is that there is no silver bullet or quick fix on college affordability.  We need to move forward on a range of solutions:  alternative pathways; transfer programs; online options; cost-saving innovations; more efficient collaboration among institutions; more help for students through financial aid, TAG grants, and work-study opportunities; and so on.

This is where the institutional differences come in.

In the institutional partnership agreements that I envision, each college or university and the Commonwealth will agree, not just on the talent development and other key economic initiatives we just discussed, but also on key outcomes for students.

Specifically, in return for a financial commitment from the Commonwealth, each school will make transparent commitments concerning the four-year net cost of attendance for in-state undergraduates, the internship and work-study opportunities that will be provided, and the maximum student loan debt levels that any Virginia student may incur.

These plans will vary by school.Some may offer a fixed-price guarantee while others may peg prices to an index or even roll back recent increases.Some will find new and better ways to bend the cost curve, and others will find new revenue-generating services to offer.Some will offer coop programs and internships while others stress forgivable loans and even income-sharing agreements.And some—many, I hope—will find businesses ready to partner entrepreneurially in ways that boost our Virginia economy and help Virginia students stay and succeed here.

But the point is, each school will make a transparent, measurable commitment to affordable access for all Virginia undergraduate students.

Notice that I said each of our schools would make these commitments “in return for a financial commitment from the Commonwealth.”We have to be talking about a real partnership here.The reality is, we cannot expect tuition predictability and restraint at the campus level if we do not provide adequate, reliable funding at the state level.So we need to tackle both simultaneously.

From time to time, the revenue situation makes it fiscally prudent for the Commonwealth to avoid new recurring spending commitments and invest instead in certain non-recurring items.This may be one of those times, and so I want us to consider how best to set aside funds for higher ed and thereby break the familiar cycle of state budget cuts and unexpected tuition spikes during economic downturns.

Coming up with these plans will not be easy.The net price charged to students is always a function of local cost-saving and revenue-generating efforts, state operating support, and state and locally funded financial aid.And the schools are in different places in terms of the state support they receive, the business partners they can attract, their ability to attract higher-paying students from out of state, and other factors.One size really does not fit all.

But I am committed to having a college affordability and predictability plan for each school that provides real relief to students and their families and is backed by a reliable funding commitment from the Commonwealth.

The people in this room have a key role to play in making this happen, and I will be asking for your help and support.

Performance Funding, Transparency, and Accountability

Finally, in all of these initiatives, we need to follow the example of the private sector by measuring and rewarding results.

An important part of this is empowering students and families as consumers.  That means being transparent on graduation rates and time to completion.  It means tracking student job success after graduation and reporting the numbers.  It means telling students and families up-front not only on what it costs to attend an education or training program and what the resulting debt level will be, but what return on investment can be expected.

The return-on-investment information is absolutely crucial.  On the one hand, the 30,000 average debt that students incur seems intolerably high, and it is.  On the other hand, the average price of a new car today is about $32,000; and most folks buy multiple cars over their lifetimes.  So it matters a lot what you get for that college investment:

  • If you don’t graduate, you get a lot of debt and no way to pay it back. 
  • If you get a degree that no one needs, you graduate into the proverbial parents’ basement and a big financial hole. 
  • But if what you get is an in-demand degree or credential that leads to a good job and strong lifetime earnings, then the investment can pay for itself many times over. 

That is the kind of information consumers need and many currently do not have.

By the way, we are not writing on a clean slate when it comes to this kind of transparency and performance funding.  As Tom Farrell will recall, the higher ed commission that he and I led in 2010 recommended performance funding, and the funding model in the 2011 Top Jobs Act authorized it.

That legislation also set up a six-year planning process that has improved things, but clearly not enough.  We need to take that process a step further and develop institutional partnership agreements that address big priorities like the talent pipeline and affordable access, and provide funding tied to performance.

Whether we need to amend the Top Jobs Act to take the important next steps I’ve outlined today, or whether we can accomplish them just through the budget, are details we’ll be discussing in the next weeks and months.  If legislation is needed, I am more than willing to sponsor it.

But here’s what I need to ask of each of you:  I will be working with my House colleagues, especially our Caucus leadership and Appropriations and Education committee chairs, members, and staff.  And we will be reaching out across the aisle in the House, and to the Governor and key Senators, to work together on these priorities.  The colleges, universities, and community colleges of course will be at the table.  But what we need from you and other top business leaders in this state is hands-on engagement and support at every step of the process.

There simply is no more important work we can do in this Commonwealth than developing our talent pipeline, ensuring that every Virginian has affordable access to it, and producing measurable results for the people of Virginia.

If we can take these steps together, then we won’t be wondering whether people will come to what we’ve built.  Virginia will be a magnet for talent, and the best and brightest will be rounding the bases and heading home. 

  • They’ll be tagging first with an excellent and affordable postsecondary education;
  • They’ll be touching the bag at second with a great internship and work experience;
  • They’ll be rounding third with a first full-time job in their chosen field;
  • And they’ll be crossing the plate as a star with unlimited potential—with what it takes for a resilient, rewarding career and a life of good citizenship and service right here in Virginia.

(I’d like to think they will also be wearing pinstripes, but that may be asking too much.)

This is a vision that the business people here in this room can help make a reality, and so I ask for your guidance and counsel as well as your support.

With that, I’ll invite your feedback and try to respond briefly to any questions—and, again, I thank you for the opportunity to make this presentation.