This report presents a perspective and analysis of the current state and future direction of the state higher education system in Virginia and recommends a comprehensive legislative package that will ensure the quality and economic viability of Virginia's system into the next century. Concerns about educational quality and state commitment to support higher education originally prompted the review. The report's proposals include: (1) change the institutional culture to make teaching top priority; (2) re-examine the method of awarding tenure; (3) avoid duplication of programs; (4) increase the productivity of teaching; (5) modify academic credit transfer policies; (6) encourage each institution to develop a program to support economic development in its region; (7) adopt a policy of requiring each institution to keep total increases in costs per student to 85 percent of the Consumer Price Index; (8) restore the state's share of higher education to 60 percent of total costs for four-year institutions; (9) require state education agencies and all institutions to develop uniform accounting practices; (10) bring in communication and information technologies; (11) change current restructuring to make efficiency and cost-control on-going concerns; and (12) continue support for Virginia's independent colleges. (JB)