RICHMOND - Legislative staffers recommended freeing Virginia's public colleges and universities from a litany of time-consuming and sometimes costly bureaucratic requirements Tuesday but stopped short of endorsing the broad autonomy sought by Virginia Tech and two other institutions.

During a presentation to key lawmakers and other officials, staff members of House and Senate money committees recommended granting public institutions more leeway to set tuition, pay employees and manage campus construction without previous approval from the state. While it wasn't everything they wanted, administrators from Tech and the University of Virginia found plenty to celebrate in the recommended changes to state oversight of public colleges. But most of all, the officials said they were encouraged that key General Assembly lawmakers appear strongly committed to granting Virginia's public colleges additional financial and administrative flexibility.

"I think it's very positive and encouraging," said Virginia Tech President Charles Steger. "I don't think we're at a solution yet. But I think it shows a very positive trend."

Steger, as well as his counterparts at UVa and the College of William and Mary, have been trying for more than a year to drum up support for a proposal - commonly known as the "charter university initiative" - that would grant the three institutions the authority to run many of their administrative affairs in-house as well as set tuition and fee rates. University officials insist the changes are needed to close a nearly $90 million funding gap at the three institutions and to provide some financial stability.

Last month, the three universities garnered the critical support of the state's other college presidents by broadening the proposal to offer three levels of autonomy.

The recommendations offered Tuesday included many of the flexibilities in the three-stage proposal, but omitted several key features of the original charter proposal.

Staffers Amy Sebring with the Senate Finance Committee and Tony Maggio with the House Appropriations Committee said they were still reviewing a proposal that would allow institutions to keep the estimated $20 million in interest earnings generated from tuition and fees. The state currently retains the money.

They also declined to endorse a proposal sought by the three universities allowing them to use revenues from for-profit ventures, such as the Virginia Tech Corporate Research Center, in their operating budgets without losing state money.

Leonard Sandridge, executive vice president and chief operating officer at UVa, said he was pleased with the scope of the recommendations and optimistic about making more progress in the coming weeks. The General Assembly kicks off its 46-day legislative session today.

"I think the proposal put on the table would go a long way to responding to the issues that we included in our original proposal," Sandridge said.

Both Steger and Sandridge said they were also pleased with the tone of the dialogue Tuesday.

Sen. John Chichester, the Stafford County Republican who heads the Senate Finance Committee, said he believes the colleges have made clear that the "layer upon layer of bureaucracy" added by the state in recent years is complicating colleges' efforts at efficiency.

Chichester said the state should move forward with decentralization while focusing on ways to improve academic quality.

Secretary of Finance John Bennett said he remains concerned about how decentralization could affect access to higher education for the growing ranks of young people, affordability and public colleges' responsibility as engines of economic development.

Bennett said Gov. Mark Warner wants to see procedural autonomy tied to specific goals. He added that desired flexibilities such as the interest earnings from tuition could be used as incentives to hold colleges accountable.

What's included in the staff proposal?

• Recognition that college governing boards - not the General Assembly - have the full authority and responsibility to set tuition and fee rates.

• Allowing all colleges to dispose of surplus property (desks, computers, etc.) and negotiate leases locally rather than going through Richmond.

• Granting all governing boards the authority to grant raises for nonfaculty employees based on merit or performance. Currently, all employees receive the same percentage.

• Giving select colleges (including Virginia Tech and Radford University) the authority to construct and renovate buildings using private funds without receiving General Assembly approval.

• A requirement that all colleges prepare detailed, six-year financial and academic plans that contain specific goals.

What's not included in the staff proposal?

• Allowing colleges to keep the millions of dollars in interest earnings generated annually from tuition and fees.

• Language allowing some institutions to become "chartered universities." Charter status would change universities from state agencies to state entities with broad autonomy.

• Provisions allowing colleges to keep revenues from nonpublic sources - such as the Virginia Tech Corporate Research Center - without the money counting against their state appropriation.

• Authorization for some schools to offer their own retirement plans.

• Specific incentives for colleges to achieve goals or consequences for failing.