Friday, October 28, 2016

UA throws a few coins in the bucket, tens of millions need to follow ...

Yesterday, University of Alaska (UA) President Jim Johnsen announced that UA was proposing to cut a few of its sports programs. https://goo.gl/ctQlzr

The University treated it as a major event, worthy of a press conference that required at least Johnsen and one of the University attorneys to fly down from Fairbanks.

The combined savings?
Johnsen said the proposed elimination ... will ... save $1.2 million.
To be honest, that's not even a decent "tip" percentage on the level of cuts that are needed.

Last month we analyzed the level of state funding that UA receives compared to the level received by UA's own, self-identified "peer" institutions.  UA identifies three such peers -- 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. https://goo.gl/nR2sne

Here was the result of the analysis:
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. 
The other two "peers" are even lower. The Southern Illinois University System receives $6,406/student FTE .... The Montana University System receives $5,780/student FTE ....
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.
The cut in University spending Johnsen announced yesterday?  It amounts to a reduction  of $75 -- yes, seventy-five dollars -- per student FTE.  

That is 0.6% -- yes, six tenths of one percent -- of the more than $11,000 reduction per student FTE needed to bring state funding for UA in line with merely the highest level of any in UA's own self-defined peer group.

As we said above, that's not even a decent "tip" percentage on the overall level of cuts required to bring UA in line with its own, self-selected peer group.

And the irony?  Johnsen announced the cut with one UA Athletic Director earning $100,000+ seated next to him, talking on the phone to another UA Athletic Director also earning $100,000+ on the other end.

Uh, guys?  There is at least one additional cut -- which would have amounted alone to an additional 10% -- you could have made right there while you were at it.

We appreciate making cuts is hard.  But if we are going to go about it $1 million at a time, every dime of state savings, and all of the PFD, are going to be long gone before we even get halfway there.

Big steps are required, now.  The longer the University -- and other state agencies -- take to make them, the lower the level of state savings -- if any -- that will remain by the time they finally finish.

Let's at least get 10% of the way -- that's $15 million in reductions -- next time before we ramp up the drama.  This much drama for what amounts to a bad tip isn't going to get the job done.