Insult to Injury

Wounded already by budget cuts, 26 states are wrestling with midyear shortfalls that often require quick and undesirable solutions.
November 2, 2009

Already wounded by budget reductions that came in July and before, college leaders are now scrambling to squeeze even more from coffers, daunted by the real expectation that there are further cuts still to come.

With the academic year in full swing, 26 states have now seen budget shortfalls that total $16 billion, according to the Center on Budget and Policy Priorities. Adding the initial and midyear budget shortfalls together, the collective budget gaps in 48 states total $178 billion or 26 percent of state budgets -- the largest gaps on record, the center reports.

Photo: Mike Lisi

Members of the United University Professions and Professional Staff Congress protest budget cuts in Manhattan last week.

While midyear budget reductions have been a national phenomenon over the past few months, discussions have been heating up in recent weeks in New York, Iowa, Colorado and Michigan. In each case, college leaders say they are trying to balance the need for quick action with the desire to develop strategic and sustainable solutions that will be necessary to adapt to a new normal for higher education.

Under a plan released by Gov. David Paterson, the State University of New York’s budget for colleges granting bachelor's and doctoral degrees will be reduced by $90 million or 6.6 percent of the total state-supported budget. Additionally, SUNY’s community colleges expect a $24.1 million cut, and the system’s hospitals will likely see a $7.6 million cut. SUNY officials will press the governor to reduce their share of the burden, but Chancellor Nancy Zimpher says the current proposed cut is just one piece of a larger funding problem.

“We’re not viewing this as yet another one off problem,” she says. “We have to see this as a part of the longer term financing [challenge] of the State University of New York.”

Since 2008, SUNY’s budget has been cut by $334 million, and the $90 million would be in addition to that reduction. Zimpher, who was named chancellor in February, says the reductions add urgency to SUNY’s ongoing push for budget reforms. To that end, the university is lobbying for greater tuition flexibility, as well as the right to lease property on their campuses to raise revenue.

Zimpher hasn’t laid out specific recommendations for tackling the governor’s proposed reductions, but – like many university leaders today – says “everything is on the table.”

As for the City University of New York, Paterson has suggested a $53 million cut or 4.8 percent of the operating budget for CUNY’s senior colleges. Another $9 million is expected to be sliced from CUNY community colleges.

The CUNY cuts come on top of the $68.3 million CUNY endured last fiscal year. Fortunately for CUNY, record enrollment growth has helped the system absorb the cuts thus far. The system’s senior colleges saw enrollment grow by nearly 5 percent this fall over last year, and community colleges had a 9 percent increase. The community college growth is a particular windfall for CUNY, because the state’s funding model allows the colleges to keep any money that exceeds revenue targets.

Enrollment growth, however, is a double edged sword at a time of budget reductions.

“I’m sure class size is going to be increased,” says CUNY Chancellor Matthew Goldstein. “I’m sure that the balance of full-time versus part-time [faculty] is going to be moving toward part-time faculty. How can it not if you don’t have the dollars to hire full-time faculty?”

For Goldstein, as with Zimpher, the ongoing budget crisis in New York presents a serious threat to public higher education in the state. Goldstein says he finds that kind of gloomy conversation particularly ironic at this juncture in history – 200 years after the birth of Abraham Lincoln, who in 1862 signed the Morrill Act creating land-grant colleges.

“In the spirit of this 200th anniversary and the profound impact that public higher education has had in this country and around the world, I just think we need to have louder voices mobilizing in support of higher education,” Goldstein says. “We cannot relinquish our lead in a global economy where skills are going to be driving the success of countries that we are competing with. For me it’s a critical problem that needs to be addressed and addressed forcefully.”

In New York, the mobilized voices rallying for higher education include the United University Professions, a union representing 34,000 SUNY faculty and staff. Phillip Smith, the union’s president, says Patterson’s proposal disproportionately punishes SUNY, which would carry 18 percent of the $500 million in cuts.

“The question,” he says, “is why so much? And why is it all aimed at one agency that has the ability to assist New York in its economic recovery?”

Photo: Mike Lisi


Phillip Smith, president of United University Professions, addresses SUNY and CUNY faculty, staff and students in New York last week, calling on state lawmakers to reject budget cuts to public higher education.

Quick Cuts in Iowa

As tax revenues plummet, and economic projections grow ever bleaker, some states leaders are making hurried calls for universities to plan dramatic budget reductions on short timetables. Such is the case in Iowa, where the state’s three public universities were given a matter of weeks to plan 10 percent midyear cuts.

In addition to a proposed $100 surcharge for students next semester, Iowa’s university presidents laid out a series of proposals last week that included reducing expenses on travel and equipment, furloughs and reduced retirement contributions. The universities’ combined cuts are expected to address a $58 million budget gap.

Like faculty at many institutions across the country, professors at Iowa State fear measures billed as temporary will become permanent. Arnold G. van der Valk, Iowa State’s Faculty Senate president, says faculty are particularly concerned about the university’s decision to curtail retirement benefit contributions by 2 percentage points – a measure expected to generate $2.6 million of the $24.5 million the campus has to cut.

“I think and most faculty think it’s a very bad bit of policy,” says van der Valk. “It really has nothing but negative consequences in the long term for the university and the faculty.”

Curtailing retirement contributions will make it more difficult to recruit new faculty, while also encouraging faculty who might otherwise retire to stay on longer, van der Valk says. Given the fact that faculty will be taking furloughs, the cuts will actually be larger than 2 percentage points, because they will be based on reduced income, he adds.

As universities in California have done, Iowa State will have furloughs on a graduated scale. Full-time employees making $60,000 or more will have four furlough days; senior administrators will have 10.

Floated by Stimulus – For Now

As tough as the 2010 fiscal year has already been for many colleges, this budget cycle still has the feel of a stay of execution for many. While temporary federal stimulus funds have helped keep colleges afloat, those dollars are slowly disappearing.

Under a plan introduced by Gov. Bill Ritter, Colorado’s colleges and universities would see 40 percent budget cuts this year completely backfilled by money from the federal American Recovery and Reinvestment Act. The catch, however, is that dipping so deeply into stimulus money accelerates the depletion of federal dollars that higher education officials were counting on to last several years.

Ritter has yet to specify how the cuts would be distributed across Colorado’s public colleges and universities.

“All we know now is we’re going to be cutting. The question is where and by how much,” says Ken McConnellogue, spokesman for the University of Colorado system.

Even before Ritter unveiled his plan, college leaders were considering major changes. Colorado State University has even discussed privatization as a hypothetical option.

Michigan’s colleges and universities are similarly being carried through the year on stimulus funds, and officials say there’s no clear indication of what will happen when that money runs out. Gov. Jennifer Granholm signed a budget bill last week that spends $1.6 billion on higher education, drawing $68 million for stimulus funds. The budget reduction cuts higher education support by 0.4 percent, instead of the 3 percent cut colleges would have received absent stimulus money.

Michigan's Promise Scholarship, a merit-based program providing up to $4,000 a year for the first two years of postsecondary education, was eliminated in Granholm's budget.

Expecting that they'll be forced to cut operating units by $50 million over the next 10 years, Michigan State University's trustees heard proposals Friday to close two departments -- Geological Sciences and Communication Sciences and Disorders -- along with some majors.

Up until the final days of budget negotiations, Michigan State officials feared a veto from Granholm would effectively eliminate the university’s agricultural extension service and experiment station. While spared a veto, Michigan State still faces problems down the road. Stimulus funds floated the agricultural programs, reducing the cut to 0.4 percent like the rest of higher education However, the actual reduction – if not backfilled with stimulus money – is 44 percent of the programs’ $64 million budget. Without a supplemental bill in the near future, the 44 percent cut will take effect Oct. 1, 2010.

“I am optimistic that people value our programs enough that in the next two months we will have some action that gives us some additional money,” says Jeffrey Armstrong, dean of Michigan State’s College of Agriculture and Natural Resources.

To be spared the governor’s veto pen, Michigan State officials had to convince Granholm they were positioning themselves as a vital part of the 21st Century economy. To that end, Armstrong says the programs will focus on supporting urban farming to build regional food systems, and help encourage use of renewable energy, among other “green” initiatives.

While Armstrong says he expects to have to continue to fight for funding, he’s grown weary of the “political football” that’s made of education in Michigan and elsewhere.

“I’m not throwing stones at the governor. I’m not throwing stones at the legislature,” he says. “I’m saying something is wrong with the system when higher education is not valued or is thrown into the political arena.”


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