Monday, September 12, 2016

Looking to peers for guidance, state funding to UA system should be cut much more deeply ...


Last week while in Anchorage to take public comment on various options under consideration by the University of Alaska in response to budget cuts UA President Jim Johnsen said this:

"We are the most dependent university system in the United States on its legislature for funding — No. 1." http://goo.gl/IXAmTo

But as concerning as that should be, it doesn't even begin to tell the story of how deep the dependence is, or how much of a spending bubble the state has created at the University.

As we have previously discussed on these pages (https://goo.gl/4542nU), the University periodically publishes a list of "peer" institutions.  One category is "Student Enrollment/Resource Allocation Peers."  The University itself identifies the purpose of establishing that peer group this way: "The Student Enrollment/Resource Allocation Peer group is used [to] compare the UA System to other public university systems .... UA can be compared to other public university systems in several common expenditure and revenue categories."

The peer group is then broken down by full time equivalent (FTE) students.  The most recent peer group ranking (published in May of this year, http://goo.gl/YlnvSZ) indicates the University has a student FTE of approximately 16,000, and then lists three other universities within the peer group of "Student FTE Under 30,000."  They are the Montana University System (which includes both the University of Montana and Montana State), the Southern Illinois University System and the University of Maine System.

Using just this peer group -- self-defined by the University -- the depth of the University of Alaska's dependence on state funding becomes shockingly clear.

This coming year the University of Alaska will receive roughly $325 million in state appropriations. That equals $21,875 per student FTE.

Let that sink in for a moment.  UA will receive from the state this coming year over $20,000 -- $21,875 to be precise -- per student. Over $20,000. Per. Student.

The next closest "peer," as defined by the University itself, doesn't receive even half that per student.  According to the most recent published figures, the University of Maine System will receive $210 million in state funding this coming year.  That works out to $10,500/student FTE. (http://goo.gl/1OsFRG at 18)

The other two "peers" are even lower.  The Southern Illinois University System receives $6,406/student FTE,  http://goo.gl/OaZYm1 at 7.  The Montana University System receives $5,780/student FTE, http://goo.gl/AnCICi at 14.

If UA received the same as the per student average received by its own self-selected peer institutions, state funding would level off at roughly $120 million (a reduction of more than $200 million -- a fifth of a billion dollars -- from current levels).  Even if UA received the same as the per student average received by the highest of its own self-selected peer institutions, state funding would still level off at roughly $168 million, a savings of still more than $150 million from current levels.

Yes, President Johnson is right that UA ranks higher than others in terms of dependence on state funding.  But that doesn't get at the core of the story, which is that UA RANKS ASTRONOMICALLY HIGHER IN TERMS OF DEPENDENCE ON STATE FUNDING THAN ITS PEERS.

There are a number of places where state spending should and can be cut back further in the coming session.  State appropriations to the University of Alaska is one of them.  Hopefully, the University and its Board of Regents will have that message clearly in mind in its upcoming meetings and make its decisions -- including those involving the athletics programs -- accordingly.

My view?  Want to consider continuing athletics, then ask boosters to step up significantly in terms of private support. Simply put, apply a market test. If it's not worth it to the programs' boosters to help support the programs out of their own pockets, then frankly it shouldn't be either to the state.