Trustees | Costs

Massive budget cuts to the University of Alaska system could have ‘tidal wave’ effects according to the university president

KTUU   |  July 12, 2019 by Rebecca Palscha

Alaska lawmakers failed to override the governor’s veto of $444 million from the state operating budget.

For the University of Alaska it erased $130 million on top of a $5 million cut approved by the legislature.

That’s a 41 percent cut in state funding from last year, and a 17 percent cut to UA’s overall budget.

In an afternoon news conference in Fairbanks, University President Jim Johnsen said furlough and layoff notices will go out. He also said he is cautiously optimistic that the veto overrides could still happen by Saturday.

“The university will proceed to plan as if this override is unsuccessful, we have programs to plan, for students to plan for, so we’ll be moving forward. Monday, July 15th the Board of Regents will be meeting to consider a possible declaration of financial exigency to discuss which strategic options might be available for pretty dramatic and rapid cost reduction,” Johnsen said.

A declaration of financial exigency would allow the university administration to cut positions without the usual notification requirements.

A request for a comment from the governor’s office was not returned. Additionally a call to the Alaska Republican party to speak with ARP chairmen Glenn Clary was not returned nor was a call to the Anchorage Baptist Temple to speak to Clary, where he is a pastor. The Anchorage Republican Women’s Club referred Channel 2 to the Alaska Policy Forum for comment.

Here’s what could happen now according to previous budget reporting:

About 2,500 University of Alaska staff must take 10 days of unpaid leave.

There have been talks of closing a campus.

The University of Alaska Anchorage could have 700 layoffs and the elimination of about 40 of its 105 degree programs. That’s a loss of at least 3,000 students.

Johnsen said even in the best-case scenario layoffs will happen.

“As soon as we get a little more clarity about the funding situation I imagine that we will expect we will be sending out layoff notices but that is going to be contingent on the Boards of Regents decision next week whether to declare financial exigency and then two weeks later we will be bringing to the board more specific plans for where exactly the reductions would be implemented,” Johnsen said.

He also said no matter what happens, the cuts could be much larger because of the loss of federal money and grants.

“There are going to be ripple — tidal wave if you will — effects of that cut,” Johnsen said. “On enrollment and the tuition that comes with enrollment, and also on research grants and contracts because there’ll be fewer faculty out there competing for those grants and contracts, so really the $130 million, I think, is a conservative estimate for the budget impact in the current fiscal year.”

Johnson said that for the fall semester, programs will not change.

“It’s critical for our students to know that we’re here, that we’ve got courses and programs, the schedule is set, the faculty will be here, the labs will be open, so we will be operating this fall,” he said, adding that UA might have to make more drastic changes in the spring. He said that in the near term, the university would be make cuts in non-academic programs, in order to ensure that the university meets its teach-out requirements.

One specific influence it might have, according to Johnsen, is on the thirteen community campuses across the state. He said he would try not to close them.

“Their role, however, may need to change such that a community campus is less a source of programs and courses and more of a receiving site for courses and programs from larger universities,” he said, adding that closing all of them would still only save UA $30 million.

National education advocates say cuts this large, in one hit, are unheard of.

“They will eviscerate higher education in Alaska with both short and long-term consequences for the state and its well being,” Michael Poliakoff, President, American Council of Trustees and Alumni in Washington, DC said.

Johnsen said they will do everything they can to avoid losing accreditation after a letter from the Northwest Commission on Colleges and Universities issued a warning to state lawmakers urging them to reconsider the funding cut.

As state lawmakers debated the budget vetoes, not even able to agree on where to met, frustrations for Alaskans intensified over the past few weeks. Protests and rallies grew louder, and Facebook posts more intense.

“I think he’s out to ruin the state,” Vic Fischer, who served in Alaska’s territorial Legislature and its state Senate, and was a delegate to the 1955 Alaska Constitutional Convention said at a recent rally in Anchorage.

Supporters of the governor say the university is important, but that everyone must live within the state’s fiscal realities.

“I think it’s important that we have a budget built upon our expenditures that actual match the actual revenue that we have coming in, and so it’s important to deal with fiscal reality,” Bethany Marcum the executive director for Alaska Policy Forum said.

Marcum also said that over the past five years the private sector has also had to deal with cuts.

“While it’s easy to say we need more funding the reality is we have to address these issues…” Marcum said. “It’s just not sustainable to continue to subsidize government with savings.”

The board of regents will meet Monday to talk about the declaration of financial exigency.


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