Should government entities compete with businesses? No, say most people — government has a limited job to do and it does not include any sort of commercial enterprise. Quite a few (maybe all) states have laws against government competing with busineses. North Carolina is one of them, having enacted a law in 1929 to keep government and business separate.
But we are finding that university officials here can’t resist trying to expand, as Jenna Robinson explains in this Martin Center piece. In Raleigh, North Carolina State University has bought a tract of land with two office buildings near the campus, spending $3.1 million. The acquisition is not for any immediate educational need. Is NC State going to find tenants and try to make money as a landlord? Is it gong to demolish the buildings for commercial redevelopment? In either case, it seems at least arguable that the university is in violation of the Umstead Act.
Several of the universities in the UNC system have “research campuses” that have little to do with research. East Carolina’s “Millennial Campus,” for instance, is supposed to “revitalize the urban core” of part of Greenville, where ECU is located. That’s both dubious legally and dubious economically, since pouring money into an effort at urban revitalization comes at the expense of using resources elsewhere. Furthermore, it’s undertaken not by entrepreneurs with their own money at risk, but by politicians nad university officials, who are playing with tax money. If an urban area is in decline, there are underlying reasons for it. Throwing tax dollars into the area is unlikely to get at them.
Robinson correctly concludes that “using public universities to develop regional economies appears to be ‘mission creep.’” To be sure, university students and faculty members occasionally make discoveries that turn into profitable businesses. But making money, starting businesses, and housing private companies seem to be outside the scope of universities’ three-part mission of ”teaching, research, and service.”
Rather than expecting state universities to become urban landlords, or even “economic engines,” how about having them get better at their true function, namely, teaching?