Free Idea for Any Campaign

There’s a better-than-even chance of an election this year, regardless of how the candidates feel about that. So in the spirit of bipartisanship, I offer this idea freely to anyone of any party who wants to take it and run with it.

For the next round of CARES Act funding, allow the money to be used directly in institutional operating budgets.

Right now, that’s expressly forbidden. But if you look at the goals of the CARES Act, the prohibition is self-defeating. It’s intended to do two things: to help colleges deal with the direct costs of the pandemic, and to prevent layoffs.

But salaries are paid from operating budgets. Gaps in operating budgets cause layoffs.

I got some emails in response to yesterday’s post about the arrogance of charging out-of-state tuition for online classes. They mostly went along the lines of “without that tuition income, we’re doomed.” That doesn’t apply to UVA, given its wealth, but it does apply to most public colleges and universities. We’re able to do it here because we never charged the out-of-state (or out-of-county) premium for online classes in the first place, so we never built budgets on it.

In other words, at most colleges, operating budgets were already strained before the pandemic. Add pandemic-driven cuts to state aid, such as the one we’ve experienced, and pandemic-driven uncertainty about enrollment levels, and you’re looking at a climate favorable to layoffs.

If you want to prevent those layoffs -- and we very much should -- then the first step should be to offset that damage. Don’t prevent new funds from filling the holes left by state cuts. That’s exactly where the funds are most needed.

That’s especially true now that more colleges are finally admitting that “miles of Plexiglas” is not realistic, and that most classes will be virtual. If the “all Plexiglas all the time” approach were realistic, then there might be a plausible argument for keeping federal funds separate: they’d pay for the Plexiglas. But if most schools are going entirely or almost entirely virtual, then the main expense isn’t hand sanitizer or shields; it’s lost revenue. Lost revenue leads to lost jobs. The best way to maintain capacity for the inevitable post-pandemic enrollment surge is to bridge the fiscal gap.

That would also allow states to avoid going into fiscal death spirals, as they cut spending to match lost tax revenues, thereby making the recession even deeper. With GDP declining at an annualized rate of one-third, the last thing we should do is accelerate the decline. Maintaining institutional capacity has the happy macroeconomic side benefit of maintaining employment, and therefore demand. And when people start going back to college, it’s much easier to accommodate them if you didn’t already strip the place and sell it for parts.

Happily, there’s a simple step that can set off a positive chain reaction, and it doesn’t even cost any more money than would be appropriated anyway. Just let it go into operating budgets. That’s it.

Happy campaigning!