Monday, January 24, 2011
Let's Play...What Would You Cut?
Let's say that you're a chief financial officer at a community college. You've been told that next year's state allocation will be half of this year's, and the political tea leaves suggest that the direction after that will continue downward. Since the state allocation is already, say, half of your budget, this amounts to about a 25 percent cut.
What would you cut?
To get a sense of just how bad this is, you could reduce every salary at the college by 25 percent, and still not make up the gap. (That's because labor isn't the only cost.) Alternately, you could lay off 25 percent of the employees and still not make up the gap.
The 'squishy' things would be the first to go. That means travel, professional development, and food for college functions. This adds up to well under 1 percent.
Obviously, any new full-time hiring for non-unique positions is out of the question. Normal attrition, unreplaced on the staff side and adjuncted-out on the faculty side, might get you another percentage or two.
You'd take an axe to the library acquisition budget, the software budget, and the technology upgrade budget. Depending on how ambitious you got on the software/tech side, you might gain something here.
You'd raise tuition and fees, to the extent that you could. I'd be surprised to see this gain you much more than maybe five percentage points, assuming the most extreme case.
You'd call a halt to all non-emergency building maintenance. Construction projects that use college operating money would stop. (Projects based on separate bond issues might continue, oddly enough.)
You'd stop all pay raises, and maybe impose furloughs. This could net you a few points overall. Now, maybe you're at about ten to twelve points total. Where do you get the rest?
Larger class sizes, both minimum and maximum.
Admittedly, I'm making several assumptions. I'm assuming that many of the low-hanging fruit for raising money – renting out unused classroom space for conferences, running profitable noncredit offerings – have already been done; they're part of the baseline. I'm skipping over severance packages for the laid off. I'm also assuming flat energy costs, flat health insurance costs (ha!), flat legal costs (ha!), and no other significant exogenous shocks. (In my neck of the woods, this year's snow removal budget is taking a severe hit. I'm guessing that's not an issue in Arizona.)
So even with several rosy assumptions, a significant tuition hike, and some unsustainable parsimony in physical plant, you're stuck with layoffs.
You could draw from reserves (or “rainy day funds”), assuming your college has any. But most cc's have only a month or two of their operating budgets in reserve. Worse, once they're gone, they're gone. In practice, you'd probably have to use reserves to pay for severance packages. A reserve draw could make sense in the context of “teaching out” the last semester of a dying program, but barring a political sea change, using a reserve draw more globally would simply prolong the inevitable.
I play out this thought exercise to illustrate a basic point: the choices administrators make are not always the choices they (we) would like to make. This is the fallacy in the oft-heard line that “budgets reflect priorities.” They also reflect constraints. When external funding shocks are severe and unremitting -- this year’s cut reflects the fourth year in a row -- and certain costs are either fixed or simply uncontrollable, your room to maneuver is much smaller than many people seem to imagine.
That’s not to say that the choices are entirely dictated or automatic, of course. But I’m constantly amazed at just how little my personal preferences -- or those of my colleagues -- actually matter. When resources are relatively flush, it’s possible to have significant agency. But when cuts pile on top of other cuts, there are only so many choices you can make. Blaming those who have to make the choices doesn’t help.
That said, if cuts have to be made, is there anything preventing a college from adjuncting out all its teaching? Such an institution might have a very few full-time faculty members for continuity and curriculum design, perhaps at the department-head level, but all other instruction would be paid for by the course. Quality would drop, sure, but cuts are cuts. Could it work?
If you gave me a hand spade and told me to dig a big hole, I'd work my butt off too. But I'd work much more efficiently if you gave me a big shovel. By analogy, how much more effective would even the most hard-working and dedicated adjunct be if he/she was given a fixed office, predictability in scheduling, a living wage with benefits, etc.? The point isn't that adjuncts aren't good at their jobs, the point is that they're even better when they're given the resources they need, including stability.
Two-year state colleges, unlike community colleges, have no local tax base and get hit especially hard.
And, as mentioned, CCs do have the ability to make up most of what they would lose by increasing property taxes and/or raising tuition.
I assume the situation in TX is different.
I really think that this would basically turn colleges into gussied up tutoring centres. Think about it: teachers with no job security, little pay and no specific loyalty to an institution. Sounds like a for-profit tutoring institution if you ask me. Drops in quality are just one piece of the pie. If "profs" aren't around for office hours, or have any non-instructional interest in being at a school, then what do students gain other than transmission of information? School community would basically disappear overnight. As well, if you start taking away full-time work opportunities for adjuncts, why would the good ones stay? Even the most dedicated, passionate teacher wouldn't take a >$20K paycheck, including unpaid service, indefinitely with no benefits or job security.
When I compare my local university (maybe 9-10k a year just for tuition and fees, not including parking/gas/books/cost of living) to my local community college ($960 a year if you took a full load) I can kind of see why politicians would want to cut community colleges. I think it's one of those middle class biases where they are being "primed" to how much tuition students "typically" pay and not realizing the niche that community colleges support. But I suspect that's the way this is going, four year institutions become more and more out of reach of the middle class and community college becomes completely out of reach of anyone below lower middle class in standard of living.
My prediction: replace all retirees with yet more adjuncts. Then sell admission tickets to the Marx Museum in Rhineland where spectators can see him roll over in his grave.
Then re-negotiate faculty benefits and up their portion of contributions. Lower the health care benefits too.
Yes, furloughs are a very good idea. From now on, "summers off" really means "summers off."
I'd also suggest really cracking-down on that photocopier usage even more. Install tasers.
Maybe the lack of educational access will cause people to be willing to rethink artificially low property and corporate taxes. (insert wild laughter here)
The most common occupation in my state's legislator is teacher, significantly outnumbering lawyers. We currently have three professors (out of 150 legislators); as recently as five years ago we had five.
The actual problem is that there is no money. 10% unemployment means lower tax revenue *and* higher unemployment insurance payouts (for which my state is already borrowing money from the federal government).
Medicaid - the biggest item in most state's budgets - is harder hit in these times because many people lose their healthcare as they become unemployed.
Meanwhile, voters are tired of property tax increases and will vote out anyone suggesting one (not that the middle of a recession is the best time for a tax increase anyway).
So there's not a lot that will happen legislatively until the economy recovers. It's not that legislators don't understand the problem (education is the second largest budget item); it's that they really can't do anything meaningful about it.
I looked up the Maricopa system budget and only 45 M$ of their 650 M$ budget comes from the state. They can accommodate a 50% cut from the state with a 10% increase in tuition and a 2% increase in property taxes that is permitted by the Constitution but not implemented by their Board.
They could also take it out of their fund balance, but (as DD surmised) they only have a 5% budget cushion in that pot. It looks like athletics makes up only a small fraction of the cut. I suppose they could also raise there "out of area" tuition since the state is not supporting that.
Did the legislature target AZ CCs because they already get so little from the state?
Also, having adjuncted my buns off in one of the evergreen disciplines, I look back and see that I wasn't as effective as I'd have liked to be. I was teaching several different courses at two or three schools and shared office space with several others. I didn't have the time or resources to be more than pretty good, no matter how much I cared.