Thursday, March 23, 2006

 

Capital, Fat, and Arresting Decline

For a whole series of reasons, my college is facing a revenue shortfall next year, and it looks likely to worsen for the next few years after that. As a cc, we can’t just pass on our costs to our students, so we have to find fat in the budget to cut.

This is no fun at all.

Republican rhetoric to the contrary notwithstanding, ‘fat’ isn’t a budget line. It isn’t an isolated expense, easily cut if you can just work up the gumption. It’s a judgment. It’s a judgment that a given expense isn’t worth it, at least at that level.

In higher ed, the major operating expense is labor. Most of that labor is either tenured, and therefore uncuttable, or adjunct, and therefore too cheap to be worth cutting.

Major budget cuts require either eliminating entire programs, and therefore compromising our mission, or watering-down the full-time faculty with a greater percentage of adjuncts, which compromises quality over time.

That’s old news. What people on the outside may not realize is that what little slack that does exist in the budget is what makes it possible to pursue new initiatives.

Over the long term, I can’t help but think that our fiscal fortunes will reflect (broadly) how well we serve our community. Our easiest measure of how well we’re meeting the needs of our community is enrollment. One of the best ways to maintain and increase enrollments is to keep developing new programs that reflect emerging needs or trends. The budgetary slack that gives us room to take a bath on a new program in its first year is exactly the ‘fat’ that gets cut when there’s a budget crunch. It’s like a tech company sacrificing research and development to balance its budget when sales drop. Yes, it works for a little while, but it’s long-term suicide.

The dynamics of decline are hard to stop, once they get moving. We’d like to develop a new program to attract new students, but we don’t have the money to buy the equipment the program needs (buh-bye, Perkins!), or the room in the budget to hire the faculty. So we don’t develop the program. Enrollment stagnates or drops, leading to greater fiscal pressure, and more cuts. So it becomes hard even to stay current with technology in the programs we do have. As those start to fall behind the curve, enrollment drops more, and so on.

As any good capitalist can tell you, growth requires capital. Our capital is being cut, because, in the political rhetoric of the day, it’s considered ‘fat.’ For-profit businesses borrow capital, and pay it back (or not) as the profits roll in (or not). We aren’t allowed to borrow, so we have to glean capital from government support, philanthropy, and internal efficiencies. Of course, ‘efficiency’ involves cutting out fat, which is precisely what enables innovation in the first place. The reaction to budget cuts, which makes sense in the short term, makes future shortfalls even likelier.

As an expat of Northern Town, I’m a student of decline. I’m fascinated by the lesser works of great artists, like Miles Davis’ early 1970's albums. I suspect there’s an absolutely great book in the subject of how colleges handle decline. (Has a college ever cut its way to greatness? Has that ever happened?) I’d just rather read about it than live it.



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