Colleges and universities across the country have taken a variety of steps to slash budgets in order to alleviate financial squeezes brought on by the coronavirus pandemic.
So far, only a few institutions have taken the step of declaring financial exigency, which enables institutions to lay off tenured faculty members under American Association of University Professors guidelines. Lincoln University in Missouri did so this month. Central Washington University did it in March, as did Missouri Western State University.
The lack of declarations could be about to change. At least some colleges and universities have begun looking into what it would mean to declare exigency, according to sources who speak frequently with college presidents or consult with administrators.
Interest in the topic raises the question of whether a wave of exigencies could be on its way as colleges seek further staffing cuts in order to alleviate still-sinking budget projections. Staffing is often estimated to account for at least 60 percent of a typical college’s expense budget. Tenured faculty members make up a critical part of most colleges’ employee base.
Widespread exigency declarations may still be unlikely, according to experts. Researching exigency procedures is an administrator doing his or her homework, but following through with formal action can seem like a high-stakes gamble.
That’s because "exigency" is a fraught term that could broadcast to the public that an institution is in trouble.
Still, colleges and universities have signaled that they’re willing to take other steps to make deep cuts without a formal exigency declaration. That’s sparking concern from the AAUP, which argues exigency rules exist in part to protect academic freedom.
With current conditions being what they are, the best question to ask may not be whether a large number of institutions will soon declare exigency. It might be if they’ll decide exigency is the best way to make necessary cuts.
“Right now, it’s an option on the table,” said Steven F. Agran, managing director at Carl Marks Advisors, who leads the firm’s higher education group. “It’s a process to create a financially stable school given what’s gone on, given all the unknowns and given what the last 20 years have created in fixed cost structures at schools. And you really need an approach that is cumulative of all of the stakeholders.”
Arguments Around Exigency
Lincoln University in Missouri is following an exigency process. The president of the historically black university, Jerald Jones Woolfolk, wrote in a letter sent to university constituents that the collective bargaining agreement between Lincoln and its faculty requires an exigency declaration in order to start discussions about cutting faculty numbers.
“The situation we are facing at Lincoln is no worse than that being faced by public universities across the state and nation as a result of COVID-19,” Woolfolk wrote. “The major difference is the fact that we are only one of two universities in Missouri with a unionized faculty, the other being Harris-Stowe State University. The non-unionized universities can, and have been, laying off faculty and staff with no need to issue a similar notice of financial condition because they do not have a contract provision that requires such notice. This provision in our union contract prevents us from making similar layoff decisions without prior notice or input.”
Prior notice is one reason an exigency declaration is important to groups representing faculty members.
The faculty should be involved in the declaration of exigency, said Hans-Joerg Tiede, AAUP senior program officer and researcher. Administrations should provide faculty members with information so that faculty senates can accept that situations are dire enough for layoffs of faculty members with tenure or de facto tenure to be on the table.
Under exigency, the faculty should be involved in identifying those affected by any appointment terminations, Tiede added. Exigency guidelines can also provide due process protections, like giving terminated faculty members the right to file grievances, as well as other provisions like adequate notice and severance pay.
The AAUP has raised concerns that some boards and administrations are suspending protocols to be followed under faculty handbooks, sometimes by triggering force majeure, act of God or extraordinary circumstances provisions allowing for extreme action to be taken.
“Votes to basically no longer have the faculty handbook be enforced, where the faculty handbook may have some reasonably good procedures for how layoffs can be handled, are disconcerting,” Tiede said. “It seems they’re doing this to bypass these sorts of safeguards that exist for a reason: for the protection of tenure, which ultimately exists to protect academic freedom.”
But colleges and universities have reasons to avoid exigency declarations, according to Simon Barker, managing partner of Blue Moon Consulting Group, which is a reputational risk management and crisis consulting firm with a focus area in higher education.
“We have to make these painful cuts to remain a viable institution but do it in a way that doesn’t concern incoming students or returning students or alumni about the viability of the enterprise,” Barker said.
In that sense, exigency can be seen as a hammer -- a powerful tool, but one that can be clumsy if used in the wrong circumstance. It effectively has leaders declaring that an entire college or university is at risk unless fundamental changes are put in place.
In higher education, where many institutions’ fortunes turn on the whims of 18-year-olds and their parents, some fear such a declaration could be a self-fulfilling prophecy.
“The question is, ‘What is your actual state?’” Barker said. “If it is a Hail Mary and the enterprise really is about to go down, then why not? But if it’s a tactic to try to pressure faculty or AAUP, I don’t think it will work, because they will just look at that and view it as a tactic.”
Different experts disagree on the extent of reputational risk tied to exigency or any large-scale cuts in higher education. There can be risk in not declaring exigency in cases of major coronavirus-driven restructuring if an institution is seen as circumventing long-established procedures.
Even after some faculty members are laid off, others will remain. That suggests thinking hard about the way layoffs are conducted and the mechanisms used.
“I think you probably can get further by being more collaborative,” Barker said. “It’s a lot easier to make hard decisions if people understand the facts.”
Still, some believe the public will be more forgiving of institutions that take major steps to align their business models with current conditions, no matter what specific mechanism they use.
“It’s not like you’re the only person who is announcing a furlough,” said Brian Tierney, CEO of Brian Communications, a strategic communications agency based in Philadelphia. “The things that are feared in higher ed are a reality in every other industry.”
It’s possible institutions that care about their status with faculty face more reputational risk from making cuts without declaring exigency than from declaring it.
“You don’t have to declare exigency to take all of the necessary steps to make severe budget cuts,” said Larry Ladd, a senior consultant at the Association of Governing Boards of Universities and Colleges. “If you want to be consistent with AAUP standards, you have to declare exigency.”
Predictions for the Future, Lessons From the Past
Ladd expects exigency to become a bigger factor as spring turns to summer and as institutions transition from the scramble of finishing out a semester disrupted by the coronavirus outbreak to planning for operating under a new normal.
“Institutions have a strong will to survive, just like we do,” Ladd said.
Ladd was chair of the board at Meadville Lombard Theological School in Chicago when, facing significant budget deficits, it declared financial exigency about a decade ago. The institution’s president at the time, Lee Barker, looked back on the experience and offered some reflections.
The exigency process was expensive, according to Lee Barker, who was president at the theological school from 2003 until retiring last year. It required him to be resilient as a leader -- he couldn’t allow himself to feel defeated by the exigency declaration. And he was thankful for support from the theological school’s donors as he worked to put in place necessary changes.
Communicating that the exigency was part of a larger plan was important for Meadville Lombard, Lee Barker said. Leaders had to acknowledge that some jobs being eliminated wouldn’t be done in the future, and they had to acknowledge downsides to the changes being put in place.
“I think that one of the things that happens very often is leaders become cheerleaders for whatever plan they have without acknowledging there is a downside to every big change,” he said.
Looking forward, it’s possible that tensions will mount as boards and presidents see looming financial disaster but faculty members want to follow normal processes, according to Susan Resneck Pierce, president emerita of the University of Puget Sound and president of SRP Consulting.
“It is that which will lead, I think, more than anything else to declarations of financial exigency,” she said in an email.
Even if they aren’t quick to think of exigency on their own, many leaders seem to be willing to discuss it when prompted, others say.
Larry Goldstein is the president of Campus Strategies LLC, a management consulting firm focused on higher education. The majority of institutional leaders Goldstein speaks with are willing to talk about exigency, he said.
“It’s one of the tools they can pull out if the situation gets worse than they anticipate,” Goldstein said. “Almost every institution, in one form or another, is doing scenario planning -- ‘what are we going to do if this happens?’”