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Budget Cuts and the Stimulus Money

May 6, 2009

The legislature has finally left town.  The governor has finally decided what he is going to do with the federal stimulus money.  The university is close to figuring out what its FY2010 budget will be.

We will have a cut of nearly $40 million dollars in state appropriations, we will receive about $30 million in federal stimulus money, and we expect an increase in tuition of about $20 million.   Doing the math, the effective budget for next year will actually be $10 million higher than this year’s.  However, this fails to take into account increases in fixed costs (fuel, electricity, some salary increases for unionized staff, etc.).   These additional expenses are estimated to be around $20 million.  So now we have a $10 million dollar deficit.  But not really. The university will continue with its proposed budget cuts and will reduce allocations to colleges and support units by about $40 million.  We now seem to have a $30 million surplus!   Confused?  Unless you are an accountant, you are not alone.  A closer inspection of the FY2010 budget makes things more perplexing.

Some of the $30 million surplus that is the result of the federal stimulus money will probably be used to retain non-tenure-eligible faculty (lecturers), graduate students, and support staff who would otherwise have been laid off.   This is what the stimulus money is suppose to do.  It is good news that we will be able to retain most of these folks who were scheduled to be laid off, at least for another year.   Based on the faculty grapevine,  most of the proposed reduction in expenses in the academic colleges, however, is the result of closing open tenure-track faculty lines.   So far, there is no talk  about re-opening tenure-track lines, but his is not inconceivable.  No estimates are currently available about how much of the stimulus money will go toward retaining support staff, graduate students and lecturer positions.  It is clear, however, that there will be a lot of money left over to do other things.

In a memo sent to faculty in one department, whose subject line essentially said “big bucks available”, the chair announced that the university had $30 million to  spend on modernization of equipment and remodeling.   Judging from the huge response to this email, this provocative subject line definitely caught the faculty’s attention.  Only a short justification was needed to request funds, and this justification was needed the next day.   This was very reminiscent of the end-of-the-fiscal-year memos of earlier and happier years when we had to spend in the next week any money left in this year’s budget before it disappeared.   It seems likely that much of the federal stimulus money will be used to buy equipment and to remodel teaching and research space.  We certainly have significant needs in both areas.

Although the federal stimulus money will probably help to retain some academic and support staff and will allow us to catch up on some deferred maintenance projects, it will probably not prevent the continued decline in tenure-track faculty numbers.   As I have noted previously in a blog on Budget Cuts and Faculty Workloads, we have already lost about 200 tenure-track faculty lines because of previous budget cuts.  Based on my informal survey of faculty prior to a recent open forum on budget cuts, the current budget cut could raise this to nearly 300.  The main goals of the  American Recovery and Reinvestment Act of 2009 are “job preservation and creation, infrastructure investment, energy efficiency and science, assistance to the unemployed, and State and local fiscal stabilization.”  We are using the stimulus money to invest in infrastructure and to save jobs, but we seem to be  saving the wrong jobs.

Our provost and president have repeatedly stated publicly that increasing the number of tenure-track faculty is one of the highest priorities of the university.  They have also said that the current financial crisis provides us with an unequaled opportunity to hire exceptional new faculty.  Maintaining or increasing the number of tenure-track faculty was the highest priority of the faculty senate in their guidelines for making budget reductions.  Given these public pronouncements, why might we lose so many tenure-track faculty lines?  What happened?   The answer is simple.  The president and provost also decided that they would not micro-manage budget cuts.  They left it to the deans to decide what to cut, and the deans, taking a cue from their bosses, turned this decision over to the department chairs.  No university-wide plan or strategy for dealing with budget cuts was ever developed, other than making cuts to colleges, to some extent, differential based on their “centrality” to the university.

As during previous budget crises, most college deans and department chairs seem to have taken the easy way out: they closed open faculty lines rather than significantly reducing operating costs and/or reducing the number of administrative and support staff.   (In fairness to the colleges, the faculty grapevine indicates that most colleges did propose to close open support-staff lines and even to lay off some administrative staff.) Department chairs do not like to fire people.  Most departments are small, close-knit units, and firing your friends and acquaintances is hard to do.  Because some faculty in a department will be more adversely affected by laying off some support staff than others, deciding which support staff to lay off or not replace can cause internal strife.   Consequently, closing open faculty lines seems to have been the preferred way to meet budget reduction targets.  Only if you had no open faculty lines in your department to give up were other options seriously considered.  By largely leaving it up to department chairs to decide who would be laid off without providing them any strategic priorities or guidelines for making budget cuts, we continued our tradition of management by attrition.

During this budget crisis, we were again unable to focus on preserving the central missions of the university, teaching and research.  For our administrators, purchasing agents, accountants, administrative assistants, plumbers, and student advisers are more important than tenure-track faculty.   The result is additional faculty lines gone with a concomitant increase in teaching loads, class sizes, and lowered research productivity.  This is not a strategy that will get any organization from good to great.

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