At the beginning of the economic downturn, higher education saw a wave of furloughs as administrators scrambled to compensate for budget cuts on short notice. Sometimes they were a sensible response to serious budget problems — as in the California State University System, where budget problems are indeed dire and faculty, academic professionals, and staff unions agreed to furloughs. In many other cases, furloughs were the result of misplaced priorities as administrators pleaded poverty while directing millions of dollars to facilities and other endeavors that are not directly related to education. As we argued then, furloughs hurt students and the education that is delivered, and they hurt working people — they should be a last resort, not a first resort.
However, now that the 2009-10 academic year financial reports of public universities have started to come in, we are learning that many universities that implemented required furloughs in the 2009-10 academic year had their revenues so exceed expenses that they could be boasting, if officially businesses, about record profits, For example, at the University of Northern Iowa, total revenues increased from $269,722,087 in 2009 to $292,646,325 in 2010, despite a decline in the state appropriation, while total expenses declined due to furloughs. As a result, university revenues exceeded expenses by $25.9 million — much more than the $14 million excess in the year previous. At the University of New Mexico, where state appropriations dropped by 10 percent or $30 million in 2010, the decline was more than overcome by increase in tuition and other revenue; the year's revenue exceeded expenses by $100 million.
In other words, these universities unnecessarily reduced the pay of hard-working professionals, and for no other purpose than to say that they did so. The motto of so many university administrators was "leave no crisis behind," as these administrators used the national economic situation as justification for unnecessary reductions in the compensation of the people who educate our students.
Furloughs continue, and now are joined by a new wave of budget cutting in the form of program discontinuances. Administrators at dozens of institutions have announced plans to eliminate, reduce, or suspend programs, including SUNY Albany (French, Italian, Russian, classics, theater), the University of Maine (public administration, German, Latin, theatre, women’s studies), Louisiana State University (Portuguese, Russian, Swahili, Japanese, German, Latin), the University of Nevada at Reno (German studies, Italian), Winona State University (French, German), Albion College (computer science, physical education, dance), Wells College (French, religion, music), University of Southern Mississippi (health, art, engineering technology, geology, German, Latin, religion, marine science), and more.
These plans are based on myths:
Myth #1: Institutions are in such dire straits that they must cut.
Some institutions are actually in dire straits, and for them a declaration of financial exigency and program cuts may be unavoidable and appropriate. But the vast majority of public universities are experiencing increases in revenues and reserves.
State appropriations have indeed fallen significantly. But since state appropriations are only a portion of institutional revenue, a 10 percent cut in state appropriations does NOT equal a 10 percent cut in the institution’s budget. Most institutions have multiple sources of revenue -- and some are actually enjoying increased revenue as the recession drives up enrollments. In many states, tuition revenue from enrollment increases has more than made up for any reduction in state appropriations. Contrary to the claims of some administrators, the lack of federal stimulus dollars is not causing our public universities to fall off a cliff. Therefore, 2009-10 has seen record revenues for many public universities. In addition, many institutions have substantial amounts of money set aside in unrestricted accounts, for designated purposes, or in rainy day funds.
In the University of Maine system, for instance, state budget cuts prompted a decision to eliminate the Department of Public Administration, suspend majors in German, Latin, theatre, and women’s studies, and reduce or "downsize" a handful of other programs — even though the university system’s unrestricted net assets (also called “reserves”) grew to $128 million in 2010, up from about $50 million in 2005. In addition, the Maine system had record revenues in 2010, and revenues exceeded expenses by $55 million, which was the highest level of profit recorded in many years.
Administrators tend to speak as though restricted or designated funds are unavailable to them when it comes to balancing the budget — but this is often simply not true. The restrictions and designations represent decisions and priorities, many of which are grievously misplaced. What else can you call it when presidents, coaches, and top administrators earn hundreds of thousands of dollars a year or more but institutions "can’t afford" to give raises to the adjunct faculty who teach the bulk of undergraduate courses while earning low per-course wages? When institutions sink millions into new buildings while class sizes rise?
As for rainy day funds — a prudent idea, but if you are eliminating programs and laying off staff, the rainy day has arrived.
Myth #2: Cutting the least lucrative programs, or those with the lowest enrollments, is a no-brainer.
The United States has been justly renowned for its higher education system precisely because of the comprehensive education — not simply narrow job training — offered here. A wide offering of courses is essential to the critical thinking skills that our students need to succeed in our ever-expanding global economy and to carry out their responsibilities as informed citizens in a democracy. Unfortunately, the commitment to educating an informed citizenry is being replaced in many institutions with a commitment to turning a profit. We believe that education is a public good — and one on which we as a society should expect to spend money.
Myth #3: Deciding which programs to offer is the administration’s responsibility.
Curricular decisions are primarily the responsibility of the faculty, who have the expertise necessary to plan and deliver educational offerings. Absent true financial exigency, program discontinuances should be determined by educational factors, considered by the faculty as a whole or an appropriate committee thereof. Again, there may well be instances in which a college or university truly cannot afford to operate its programs in an ideal fashion. In that case, a declaration of financial exigency and program cuts may be unavoidable. But these situations are the exceptions, not the rule.
Myth #4: There is really nothing faculty can do about this.
Faculty have a responsibility to ensure the educational integrity of their institutions.
How? Insist on being part of the conversation. Spend the time to learn how to read budgets. (Start by looking here.). Whatever faculty groups exist on campus should take the lead, whether that is the senate, an American Association of University Professors chapter or a collective bargaining unit. (See here for how to do so.)
Faculty should now do what faculty are good at: asking questions, being skeptical, requiring evidence to support hypotheses. Faculty should not accept as fact the assertion that programs need to be cut because “everyone else is doing it.” Faculty need to demand full transparency of financial information. At institutions that have not yet published their 2010 financial statements (fiscal years typically end June 30), faculty need to demand that these statements be released to the public. Sunshine is the best disinfectant.
Myth #5: My institution is doing OK, so I don’t need to worry.
Actually, if you are fortunate enough to be at an institution that is not currently going through financial turmoil, this is the best time to worry about it. Take a look at your faculty handbook or collective bargaining agreements and strengthen the language now, while the institution is not in crisis — once a crisis hits, it will be much more difficult to spend the time revising handbook language and to get the attention of decision-makers. Sample policies are here.
Howard Bunsis is professor of accounting at Eastern Michigan University and chair of the American Association of University Professors Collective Bargaining Congress. Gwendolyn Bradley is a senior program officer at the AAUP.
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