Last year, I took a class on the president’s role in higher education. One of the requirements of the class was to address possible issues that may arise at an institution. These were called ” case studies.” One of the case studies involved a 10% across-the-board cut for all higher education in the state. In one month, the governor wants to see my plan for these cuts. Students, faculty, staff, the local news, and other stakeholders are, understandably, anxious. The SGA asks about the increase in tuition. The faculty senate wants the president to address the cuts at the next meeting. The Office of Governmental Affairs has received calls from legislators asking what they can do.
In my response, I had to answer some of the following questions.
- What talking points will I stress for various stakeholders?
- Will I consult with other higher education institutions? If so, which ones? Why
- Where will I make cuts?
- How will I prepare for a possible budget surplus or potential additional cuts in years to come?
In today’s post, I share my response. I am not a university president, so there are numerous aspects that I do not address. However, I do think I lay out the beginnings of a feasible plan to weather the storm. If you would like to see some more of my case study responses, let me know in the comments below.
Case Study 10% Cuts
Any announcement of decreased funding from any source, specifically the state, will cause panic among the stakeholders of an institution. A 10% across-the-board cut will be detrimental; however, I would wonder if the 10% is per institution or if it is the overall budget. This would make a difference. For our purposes, I am going to assume that the 10% cut will occur at each institution in the state. That means that as the president I have to think about what this means for our overall situation, and I also have to think about how I will calm the fears of various stakeholders who will probably be impacted by the announcement.
First and foremost, I must consider the public approach I, and the university as a whole, will take when approaching the state government’s decision. As such, I need to think bout 3-4 consistent talking points that will hopefully assuage the fears of various groups: the SGA (students), the faculty/staff, the community, and others. My speaking points would be as follows:
- At this time, faculty/staff will not receive their annual percentage increase in salary. As well, they do not need to fear any cuts or departmental eliminations due to some resources we have stored up. If additional cuts arise, we will need to reevaluate this position.
- Students will experience a slight tuition increase to help offset some of the losses due to the budget cut. Since we have some resources stored up, the increase will be less than 5%.
- Our university has done an excellent job, throughout the years, of generating funding through the pursuit of federal grants and contracts to the university. This will help to offset some of the budget constraints.
- Our alumni and donors have always greatly contributed to the mission of our institution, and over the past few years, we have seen a steady increase in gifts from these individuals. We will work with these individuals to create new means of revenue to help counteract the budget cuts.
On the issue of contacting other higher education institutions, I would look, if I decided to do this, at comparable institutions across various states who have encountered similar issues. I would ask these institutions how they prepared for the funding decrease and what measures they took to maintain their current budget. As well, I would ask them how they came up with decisions about what programs to possibly cut, whether or not they decided to raise tuition, and how they sought out other means of funding to offset the deficit.
When thinking about cuts, I am not sure where I would do that. Thinking about this issue, I would probably construct a committee to look into possible areas where cuts could be made. This initiative, however, may prove difficult considering the timeframe of the discussions. Since time is of the essence, I would think about, even though it pains me, the use of more contracted instructors and professors. I would look to see where we could cut back on expenses such as power and other services. (I say this because the university where I previously worked, in Louisiana, experienced multiple budget cuts over subsequent years. To help alleviate this burden, they cut back some on hours of operation. M-Tr the school was opened from 7:30-5:00. On Friday, the institution closed at 12:30. This save about one or two hours in operational costs, and I am not sure how much it saved overall.) One of the key aspects I would consider would be looking at what programs generate the most income per student and boosting those programs in some manner. Some schools can offset these cuts via athletic departments, but those are few and very far between. I know LSU supplemented part of the academic budget with the athletic budget in some manner.
To prepare for future cuts, I would look at ways to stockpile for what appears to be the inevitable. I recall Dr. Gouge speaking about a university where he worked. There, they could not carry any money over to the next fiscal year. If there was a surplus, they found places to use the money. One example was in the stockpiling of coal for the power plant on campus. By stockpiling the coal, the institution could cut back on that expense in case of a budget crisis. Every university is different, so every item that could be stockpiled would be different, but I would look, way before the announcement of the budget cuts, where we could stockpile these assets to offset the downfalls caused by the 10% cuts.
If the university does not have a reserve, of any nature, it will be difficult to weather the cuts unscathed. If I am a new president, I would may or may not have a reserve. If I have been a president for a few years, I will have worked, from the outset, to work on ways to create some reserve to help assist with budget cuts that may arise down the road. Again, the way I would do this would depend on the institution and the state, but I would make sure to find a way to set aside some funds especially for these moments.