About a week and a half ago, a regular reader/contributor to EMUTalk.org sent me the content below the “read more” line about a 3% or so increase to higher ed being proposed by the state. I didn’t post it back then because I got busy with my “day job,” and also because I was busy much of last week taking advantage of my quasi-sabbatical status to take a little road-trip.
However, in light of the recent rumors discussed here, these articles from just a couple weeks ago does raise some interesting questions. Has the budget picture changed that much in the last two weeks, or are these $3 million+ rumors legit, or is there something else going on here?
2.3% EMU Budget Increase Proposed by the Governor
In case anyone missed it, Gov. Granholm has called for a 2.3% budget increase next year for EMU. While an overall average increase of 3% is proposed for higher education, higher increases are dedicated to (not surprisingly) other state universities.
See the bottom half of the below Free Press article from last week, which includes a quote from an EMU rep:
http://www.freep.com/apps/pbcs.dll/article?AID=/20080208/NEWS05/802080315/1008
My question is: why does EMU always seem to be at the bottom tier of state funding allotments whenever state funding is proposed? I don’t understand the rationale for distinguishing EMU from other state universities, so maybe someone here can help explain. It does seem that our current governor continues to view EMU at the low end of the spectrum relative to its state peers. While this view was understandable the past few years (University House issue and the recent tragedy), but what do we need to do to demonstrate to the state that we are working to put this behind us?
On a different but related item, the Detroit News recently noted that Dennis Archer is likely to throw his hat into the ring to serve as Michigan’s next governor. I believe Archer would generally be considered a strong candidate and might be an early front runner if he does jump in formally. Given his close ties to the southeast Michigan region, which is where EMU recruits most heavily (I believe), then does a potential Archer administration bode well for EMU? Also recall that EMU’s very own government relations guru Hendrix was Archer’s deputy, which can’t hurt. I only mention this because it seems EMU needs a fresh perspective in Lansing if it is ever going to get its fair share of state funding support.
http://www.detnews.com/apps/pbcs.dll/article?AID=2008802060394
Feel free to delete this (off-topic) comment. But, I’ve done a lot of thinking on this and I am curious about something…
Is there anything “EMU Budget wise” that would be funded and help a lot of Students and Faculty members out that I could donate to?
The issue is this lame brained “Stimulus Package” money coming in a few months.
I do not support the stimulus package so my options are to flush it down the toilet or make some good use of it.
P.S. What kind of stimulus package is this that doesn’t fund or support struggling graduate students looking for a job? If the rich people aren’t getting it then how do we expect them to hire anyone?
I expect the check to be $600 based on my research. What could $600 do for EMU?
Hi All
Sitedad asked for an answer regarding the rumored budget cuts and the increase in state funding (in the other budget posting that turned into a discussion about other stuff). Here’s my simple answer using some basic, conveniently round numbers.
EMU is spending $300M this year. Of that $300M, only $80M comes from the State appropriation. Let’s say costs increase by a mere 1%, that’s $3M more EMU needs to cover next year. The State is giving EMU 2.3% more, but in dollars that’s a $1.84M increase. Thus EMU must make up the other $1.16M some other way. But costs are not going to increase a mere 1%. Say costs go up 3%, EMU must then find $7.16M of that $9M increase. Hence the problem.
Then couple this with enrollment issues, dorm occupancy, lack of any plans/projects to expand revenue sources, the incredible amounts of money we spend on screw-ups, the increased costs of band-aiding decrepid buildings, and the fact that no one seems to be willing (have the ability?) to make the hard choices, then problem is seriously compounded.
Remember this whole conversation started based on a rumor because an administrator is afraid and cannot talk out loud about the problem. We have swept so much stuff under the rug that the stuff is no longer covered up by the rug.
JP
J Physics,
You provide very useful numbers and context for understanding the EMU budget situation. Thanks! But since the lion’s share of EMU revenues are from tuition and fees, and since there was — if I recall correctly — an 8% increase on tuition and fees for the current year, that means EMU is making 8% more in student derived revenue (since enrollment overall held about even). How much more did EMU’s costs go up? Nobody in Business & Finance has ever, to my knowledge, been able to project, with some degree of reasonable accuracy, what EMU’s expenses will be for a given year. They routinely overestimate, for example, the actual total compensation costs for the faculty, by millions of dollars per year. Year in and year out, EMU officials make budgets based on very faulty estimates of costs.
So the real EMU budget difficulties are internal – we can’t project costs, we don’t know how to maximize revenue (add more sections!), we close down classes that would produce more revenue than expense. What Lansing does or does not appropriate for EMU is not based on a real deep knowledge about EMU’s actual spending or needs — it’s based on statewide political and economic concerns. The formula is designed to favor those schools that are most “in favor” with the powers in Lansing.
This mismanagement of the budget is catching up with EMU – the higher ed environment is increasingly marked by competition and universities are increasingly scrutinized by the press, the public, and state officials, yet EMU’s budgetary processes are still decades out of whack. J Physics sums this up nicely — ‘we have swept so much stuff under the rug that the stuff is no longer covered up by the rug.’
1) Mark’s thesis is that revenue is up because “enrollment overall held about even” in the face of tuition increases. This would be true if “enrollment” is the same as total student credit hours. Anyone have hard numbers?
2) Look for Hendrix to leave the sinking ship for a spot in an Archer administration, which would not help EMU’s position in Lansing.
I get what you’re saying here, JP. But in order to get to that very large deficit, you have to project all costs going up (which, given the nature of the recession economy we are either in or entering, isn’t likely), and you have to also assume that we don’t raise tuition at all (which, given the nature of higher ed in general and EMU in particular, I assume will happen). So I don’t know; I think the deficit is still kind of fuzzy to me.
Assuming there will be some kind of deficit though, my gut feeling is that it won’t be a problem “solved” in the same way as before. There was very wide spread agreement that the way the budget cuts went down last summer was very stupid, and I recall that much of this chaos and stupidity was Fallon’s fault. I believe even members of the BoR expressed surprise and dismay at the extent of the cuts. I’m pretty sure some of this was posted on EMUTalk.org last summer, but I can’t find it now….
Anyway, my point is I am at least hopeful that we aren’t going to have to face the super-deep cuts in my department this coming year/summer that we had to face last summer. There might be other areas of EMU that feel the pain deeper than academics, but I am hoping that Loppnow, Nealy, et al, with Fallon and the catastrophe that was last year in the rear-view mirror, won’t make the sort of cuts to “Education First” EMU this time around. Hopefully.
I do agree with JP completely about almost everything else though. For me, the fact that the “fact finding” process more or less agreed with the AAUP’s numbers is proof that EMU’s administration has never kept very good books. The fact that last summer, even with all the cuts, we managed to find more money to spend on athletics suggests to me that the priorities of at least some administrators/BoR members are elsewhere.
And yes, millions and millions of dollars have been swept under the rug.
Never mind the house– that’s three presidents ago, and as stupid of an idea as it was, that’s done and over-with. Maybe the next president will have some good ideas about how to actually make the place livable for a family and actually useful for the university community. The millions I am thinking about under that rug are all from last year. I don’t know if anyone has added it up yet, but with various pay-offs, lawyers, overtime for PR people, etc., etc., but the Dickinson Murder cover-up has to have cost EMU $5 million, maybe more. When we talk about budget cuts of $3-$10 million, that’s a lot of freakin’ money.
PC, you make a good point about enrollment versus student credit hours. Maybe one of the Administrative types who lurk on this blog can come forward with the relevant data on this point? But from what i’ve seen, i think total revenues are still up this year over last. The student credit hour production was of course badly hurt by the bone-headed decisions to cut the number of sections offered this year. (One problem for all these discussions of course is the near embargo on releasing information that prevails at the top levels of the Division of Business & Finance: Subordinates there who want to release info speak frankly of being fearful of being punished if they do so, and the top dog in the Division does not even reply to queries on matters about which she has promised full disclosure — for instance, at a fall meeting on the budget sponosored by Faculty Council, she said she lacked data at that time to address the university’s spending on legal fees, but would answer such questions directly for interested persons. I was interested, I asked her, back in October I think, and I’ve not gotten a reply. She seems to either have much to hide, or an inability to follow thru. She is also the same official who directed her subordinates to NOT answer queries about the PrayHarrold asbestos removal job last summer, the one that violated federal rules and alienated countless students. To have answered those queries would have required naming the responsible officials, including the Building Administrator, whose screw ups created the whole mess.)
HI All
I think sitedad and Mark are asking exactly the right question: what costs are increasing and by how much? At the first budget meeting sponsored by faculty council it was admitted that EMU just “increments” its costs. My guess is that process has not changed much, but before we go through another round of cuts and before we randomly jack up tuition, the question should be answered in detail. I would hope the students and faculty would demand a detailed, transparent answer.
Clearly one cost going up will be energy. But it is a small percent of $300M.
Salaries will go up, however that does not mean costs go up due to retirement or resignation, and the lack of hiring. Faculty total costs should not increase in next budget year. There will be less faculty.
In the new faculty contract, the Administration claimed that their health care plan would level the cost of health care for the university. Since they forced it on everyone, if their plan was correct they should not claim health care costs in the budget are increasing. The employees are essentiall paying for the increasing cost now in premiums, co-pays, etc.
We clearly cut Full-time lecturers every year as a matter of “policy” (a huge mistake).
The Grad Assistant money only goes up because tuition goes up, but since we haven’t changed the stipend in years, that isn’t a real increasing expense. Then we cut them anyways. We hacked into the PhD programs last year too.
We have not increased Spring/Summer money in years.
We pay a huge amount of money to former administrators. Clearly that seems to increase every year, especially when they return to faculty and get a full year off at full administrative pay. Plus then we hire an interim.
We spend an aweful lot on fixing up the lawns only to obliterate them with the plows every winter (it seems this year is the worst ever).
So what is going up is still the $3M question?
JP
J Physics, yoiu wisely put this all into context, and I echo your call for a completely transparent budget making process. What are actual costs? would be a good place for Business & Finance to start with. I hear that they don’t have the ability to do that. Their inability to do an actual assessment of real costs and real revenues is why they create a budget by guesswork, with hugely negative consequences for the University and our studies.