'Shocking' Cut May Force Layoffs for Alaska's Universities

Governor's slashing of state funds has University of Alaska preparing for inevitable cost-cutting measures and faculty fearing declaration of financial exigency could enable dismissal of tenured professors.

July 1, 2019
 
Cathy Sandeen, chancellor of the University of Alaska at Anchorage

Stakeholders at the University of Alaska system spent the weekend preparing for a difficult future after the state’s governor cut 41 percent of the system’s state appropriations through a line-item budget veto.

University leaders have begun an uphill battle to lobby members of the Legislature to override the veto and have warned that if they are unsuccessful, they will have to take drastic cost-saving measures.

Governor Mike Dunleavy had previously promised extensive cuts to the state’s operating budget, which university leaders, working with legislators, thought they had averted. But on Friday, Dunleavy vetoed portions of the budget passed by the Legislature -- taking the largest chunk from the University of Alaska system. The veto resulted in the university losing $130 million in state support. Dunleavy has indicated that the statewide cuts would enable an increase in contribution to the Alaska Permanent Fund. The fund provides a dividend to state residents based on oil revenue.

Dunleavy said at a news conference that “we can’t continue to be all things for all people.”

Cathy Sandeen, chancellor of the University of Alaska at Anchorage, said that state appropriations account for 40 percent of the system’s total budget, with the rest coming from other sources such as private donations and student tuition.

“Stunned disappointment” was how Sandeen described her reaction upon learning of the cuts. “The governor had proposed a similar cut in his original budget earlier in the year, and as it went through the Legislature, the cut to the system was drastically reduced -- still a cut. This was a really extreme difference. It was quite shocking.”

Immediately the system administration froze hiring and all travel. Faculty members and administrators have also begun efforts to contact members of the state Legislature to lobby for an override to Dunleavy’s veto. According to Alaska’s constitution, it will require 45 votes of the 60-member Legislature. The president of the Alaska system in a recent op-ed pre-emptively called for override efforts should the governor veto substantial portions of the budget. Many political experts in the state say an override is highly unlikely.

Sandeen previously served as chancellor of the University of Wisconsin Colleges and UW Extension, where her institution also saw drastic cuts in state appropriations. Sandeen said in her experience that a cut of this magnitude would almost certainly result in layoffs and program elimination.

“We don’t know how the system or board is going to carry out the cut across the various institutions,” Sandeen said. “Just conservatively it pencils out to be around 700 positions. That is massive. We would also expect a reduction in student enrollment because of program eliminations and reputational damage to the institutions.”

Scott Downing, Faculty Senate president at Anchorage, said professors were concerned that the system’s Board of Regents might declare financial exigency, which would allow for the possibility of terminating tenured faculty members with 60 days' notice.

“The idea of financial exigency is new -- obviously cuts like this have never happened,” Downing said. “We are very concerned how it’s going to affect what will happen to the students at our university, as well as our connection to the community and our ability to conduct research. A cut of this size is just going to have devastating effects on what we do as faculty. It will change every single faculty member’s work.”

Sandeen said program elimination could inevitably affect tenured faculty positions, which university leaders are considering carefully. She said the university would consider looking at factors such as enrollment, net revenue, graduation rates, work-force need and special circumstances when considering program elimination.

“Affecting tenured faculty is a very serious move in U.S. higher education,” Sandeen said.

Downing said the faculty have been organizing to support a veto override by encouraging students and community members to try to reach legislators.

“We’ll work very hard to try to get the necessary three-quarters of the Legislature,” Downing said. “That will be our focus initially. We’ll continue having those discussions. It's still our hope that we can encourage legislators to see all the things that the University of Alaska system does for the state in terms of generating economic activity to get to that override number they need.”

A recent study from the National Bureau of Economic Research found evidence that cuts to public higher education had effects on the work force in the state where the cuts occurred, and that cuts decreased the undergraduate and Ph.D. degrees awarded. It also found that states generally are forced to increase tuition and recruit out-of-state students more heavily.

Sandeen said business leaders in Anchorage are concerned about the impact the cuts could have on the local work force, particularly due to the fact it would be unlikely that faculty members who were laid off would be able to find similar work elsewhere in the state, leading to an exodus of education professionals.

“There will be a massive sucking sound of people leaving the state,” Sandeen said. “People are going to operate in their personal economic interest. A high percentage of our students are first-generation students, and we are really starting to move the dial in terms of increasing opportunity for Alaskans who want to stay in Alaska, so that will be set back. All that hard work that we were really starting to see positive results on.”

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