Wednesday, May 28, 2008


Well, That Was Quick...

It's easy to underestimate the impact of sex scandals.

According to this article from the Albany (NY) Times-Union, Governor Paterson of New York has abandoned his predecessor's plan for a hiring boom in the SUNY system. In fact, he has gone farther than that, freezing already-collected monies, implementing a hiring 'pause,' and telling campuses to gird themselves for a systemwide cut of 3.35 percent, on top of the $38.8 million already cut.


Just a few short months ago, then-governor Spitzer proposed an ambitious plan to scale up the SUNY system, pouring new funding into it and hiring hundreds of new faculty. (My initial response is here.) Then he got caught in a particularly sordid sex scandal. Now, the system will be lucky to keep most of the people it already has.

(Across-the-board cuts are particularly brutal when large chunks of the budget are effectively uncuttable, such as tenured faculty, utilities, and contracted services. Any cuts have to fall disproportionately on other areas to compensate for the untouchability of those.)

The T-U article is worth reading to the end. I was particularly struck by the union chapter president saying that she had never seen the campus presidents so upset. When the union is expressing sympathy for the presidents, you know things have gone off the rails, and that's not a criticism of either the union or the presidents.

The public sector as an employer is subject to two utterly contradictory realities. On the one hand, it compensates for uninspiring salaries by offering unparalled job security. On the other hand, it's reliant in various important ways on the budgetary whims of the government, which change pretty much whenever the wind blows. Balancing 'unparalled internal job security' with 'volatile external funding' is the frustrating task of administration.

There's no easy or elegant way to do that. If you're too conscientious and build a reserve – the term of art among private colleges is an 'endowment' – then the legislature will take that reserve as evidence that you don't need funding and they'll cut accordingly. If you're not conscientious enough and some sort of interesting waste occurs, headlines will follow, and the legislature will use the headlines as an excuse to cut. So the standard route is an ad hoc combination of cost cuts – adjuncting-out faculty retirements, negotiating multiple-tier union contracts to buy off the opposition of the entrenched while screwing the young – and aggressive pursuit of philanthropy and profit-making side ventures, like non-credit community programs. It manages to annoy just about everybody, but hopefully keeps the really dangerous wolves away from the door.

Aid-based budgets are tricky, since aid is so unpredictable from year to year. It's also largely divorced from local performance, so incentive-based funding at a local level is based on a gamble that the state won't leave you hanging. If it does, good luck ever running that again.

Honestly, I'm starting to wonder if there might be a better way to fund public higher ed. What if we did away with operating subsidies altogether, and redirected that money to financial aid for students? Make colleges run their operating budgets – not capital, necessarily – on tuition, and subsidize the tuition heavily to ensure that no academically-capable student is excluded for economic reasons. It would still be somewhat volatile, since enrollments fluctuate, but at least the volatility would correlate with actual campus conditions. When enrollments boom and costs go up, revenues go up, too. When enrollments slide and revenues slide, so do costs. Right now, whenever there's a recession, enrollments boom and costs go up, but aid goes down. That doesn't make any sense at all.

On the upside, revenues derived from operations wouldn't have all the red tape that direct aid has. (“This pot of money can only be used for these purposes, and that pot for those purposes.”) Colleges could actually allocate available funding as needed (rather than 'as directed.')

As it happens, we're sort of moving in this direction anyway, only without the upside. I've seen many aid cuts, but I've never seen restrictions lifted. If anything, they metastasize. I say, if you aren't going to pay the piper, stop calling the damn tune. If a state wants to micromanage, it can always earmark certain scholarships for certain programs and do it that way. At least then the revenues will have some vague relation to the costs.


Good luck, SUNY. Here's hoping your next sympathetic governor is less of a selfish idiot.

Isn't that what SLACs do? And the concern is always that the price scares people off.
Let me address just the revenue side here (which you also discussed in the January post on Spitzer's plan): I don't think the fund-the-student model is going to work, even though it fits with the voucher zeitgeist these days. In community colleges, I suspect a bunch of legislators around the country would rather fund exits than enrollments (and a bunch of CTE programs here in Florida do that already in various ways). As far as four-years are concerned, legislatures are not generally going to be happy giving up their prerogative to meddle in university budgets, since that's a huge opportunity for patronage/pork. (That may also be true for CCs in certain places.)

Having said that, this dynamic isn't unique to education; it's what's happened to the public sphere in general.
Whether it is prudent to build a reserve depends on the state funding model being used. If it is based on a per student formula, so the budget of an individual college is not a line item, then you only have to be sure that most of the other colleges are poorly managed and you can do OK.
I actually had a feeling this would happen.

Oh well, so much gor getting a job at my law school alma mater.
Reframing "I have never seen campus presidents so frustrated."

This comes from a 30-year veteran (hired circa 1978) who might have been busy with other things when the other recessions rolled through. I also don't know how those hit NY. That got me wondering where the President at Albany (SUNY) is coming from.

He is an interim president! One that had (past tense?) almost 50 faculty openings, including almost 20 in a new College of Nanoscience. He was expecting to make a mark with triumphant growth and move on up to a better school. You can bet he is frustrated.

Now for the story missed by Dean Dad: interim president Philip has a BA and MA in history !!! (plus a JD) with a career path that included working an entry level job between his BA and MA. His entire career is in the bureaucracy of the NY teacher's retirement system.

I'll bet he has never cut a budget.
All I can say (as someone just finishing her second year on the t-t at a SUNY campus) is THANK GOD our faculty/staff union negotiated our new contracts--and got them signed--before Spitzer left office.
To anonymous 9:04 AM:

If that contract has built into it an unsustainable pay increase, the part of it that specifies how decisions are made to lay off untenured t-t faculty will come into play. I strongly suggest reading it so you know what might happen and how the decisions will be made.

How did Sherman Dorn put it about the situation at USF? He said "very few" t-t faculty are being laid off. That has not been the case for every university that has been in the budget woes news.
A selfish idiot? Wow.

The problem with that Times-Union article is that it doesn't put the SUNY issue in the larger context of the runaway state budget.

This report gives you a better understanding of why the new governor may have made the tough choices he made.

I'm trying to give the guy the benefit of the doubt, despite the fact that I am brand new TT this year at a CUNY school, we still don't have a current contract (the last one ended September '07), and the state budget is running at a projected $5 billion deficit.
I think the selfish idiot remark was directed at Eliot Spitzer, not the new governor.
Anu was right -- the 'selfish idiot' in question was Gov. Spitzer.
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Oh, ok. Now THAT makes more sense. I thought it was a reference to Paterson saying he was sensitive to SUNY concerns while still freezing the budget. My bad.
An interesting note, the last governor to care about the SUNY system was Nelson Rockefeller, who died while having "relations" with a 26 year old aide.
The student-based funding model you describe is actually being at least tentatively tested by the state of Colorado (albeit as a way out of some particularly nasty constitutional idiocy). Students apply for Colorado Opportunity Fund dollars, which are then shifted from the state budget to individual institutional budgets.

It... sort of works. The vast majority of people in the state -- students and otherwise -- have no idea that COF even exists, which makes an already complicated student financial aid system even worse (with predictable effects on access). What's more, most state funded institutions also have line items on the state budget anyhow (the University of Colorado being the exception).

But it's an idea. For the record, it hasn't done anything positive or negative to calls for accountability from the legislature. But it's an idea.
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