Friday, February 13, 2009

 

Moving Targets

This week I've been a part of some very difficult conversations on campus about budget cuts and their implications for our cc. Some of the difficult parts were easily predictable: impact on jobs, impact on students, impact on various programs.

But the hardest part was one I hadn't really anticipated. It was the almost palpable desire for a fixed target, a final figure that once we had hit, we could exhale and know we'd be okay.

That, we can't do. The state budget is a moving target. And this makes inclusive, good-faith planning incredibly hard.

Every few months, the state gets a new batch of quarterly tax receipt figures. Lately, each quarter's number has been shockingly low, forcing yet another series of cuts. Since state tax revenues are based on income tax (which drop when employment drops), capital gains (not too many of those around lately), and sales tax (which tanked when car sales tanked), I don't foresee good news this quarter, either. Were I the betting kind, I'd bet that the figure we've been given for the fiscal year starting this July will be adjusted even farther downward before we even get to July.

This means that we can't just do one plan. We have to do levels of contingency plans. And as hard as one plan can be, multiple plans are that much harder.

At least with a single plan, once it's done, whoever escaped the pain escaped the pain. You have the nasty battles, the deed gets done, and you move on. But when the goalposts keep moving, the 'winners' can never be sure that they've actually won. As hard as it is to build trust during cuts, it's that much harder when the cuts that were 'enough' last month aren't enough this month.

The speed of the drop is so severe that we've literally been unable to stay ahead of the curve. A few months ago we did several budget projections for the coming year, ranging from bad to awful to worst-case; we've already blown well past the worst case.

As people have started to figure out the seriousness of what we're up against, some have stepped up and offered real help in finding sustainable answers, but some have retreated into unhelpful knee-jerk posturing. Stress affects different people differently, I guess, but I'm always a little disappointed when people take crisis as opportunities to ride old hobbyhorses. Narcissism is too expensive to afford now.

Sigh.

When it comes to contingency planning, I'm beginning to think there's a choice to be made. Fast, inclusive, and effective: pick any two.

Comments:
I'm not sure if your institution can follow the Broward County (Ft Lauderdale) K-12 example: take all suggestions and put them into a triage process: Level 1 are the cuts that don't affect students; Level 2 cuts affect students. You can have more layers, of course, but it strikes me that a tiering process allows you to take all suggestions at face value, sort them into tiers, make decisions within tiers (or behind tears) as the budget cuts worse. and still satisfy "fast, inclusive, and effective." The stupid/craven/cruel suggestions just get placed in the "we do this when hell freezes over" tier.

Well, effective at this point isn't in the picture, but you know what I mean...
 
What sort of communication do you maintain with the faculty and other stakeholders? Do they know how bad the cuts are in real numbers (as in, "in the last quarter, we were told to make another X million in cuts, beyond what we had cut three months ago"), or are they just hearing "we need to keep cutting"?
 
Like anonymous said, I think it matters that faculty hear the numbers. Our administration sends out updates, with estimates of what is going to happen and what those estimates mean. Cuts are still painful, but it does alleviate anti-administration feeling.
 
I'm no economist, but I know the terminology and the way mathematical physics gets applied to the data to predict future trends (and create bizarre financial instruments). Here the key idea is leading economic indicator, and most of those are trending downward.

If you perceive that the trend from the legislature is that you WILL get 1% less than they currently predict by the time July rolls around (and maybe even less than that by the end of the fiscal year, or the next one), you really need to plan based on that projection rather than the underestimates you have been using.

Easier said than done, but you can always not layoff someone if you end up getting the money. That will be better than having to lay off someone who thought their job was safe.
 
Yeah, but you know as well as I do that such foresight is viciously punished by legislatures looking to make across-the-board cuts. If you plan for no cuts, you get 1%. If you plan for 1%, clearly you're not hurting if they do 1%, so they'll do 2% to spread the hurt around.

I'm not saying that there's a better system out there for low-information legislators. The principle-agent problem is vicious. But the game theory is pretty strong; you need to genuinely be surprised by cuts or else they will be deeper.
 
The idea of cuts that "don't affect students" for a K-12 system is weird. In the long term, what could possibly be justified in a K-12 system that didn't affect students? Is there seriously some program that has no effect whatsoever on students that's getting funded in lieu of an extracurricular or a teacher-attracting salary or a library book?
 
The value of preemptive planning is, as Punditus notes, a function of two additional factors: whether your state uses a funding formula for CC (as our does) so well-managed and poorly-managed ones get the same amount of money per student, and whether your CC has a President who can get in front of the politicians and the local press by announcing the amputation that is needed to save the patient.

I think the way you protect the students is by first harming the faculty and staff. You could also ignore un-funded mandates that have no effect in the classroom.
 
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