Earlier this week, EMU-AAUP President Susan Moeller sent around an email that said, basically, that EMU is currently running a $5.8 million surplus. “Given that our academic departments are suffering from a terrible lack of funding lets hope that the EMU administration uses some of this surplus,” Moeller writes, “to remedy the underfunding SOON.”
Earlier today, I was talking with a suit-type who I trust who basically said that what Moeller was saying wasn’t completely true because a) a lot of this “surplus” is really about about accounting changes, b) a lot of it is based on federal stimulus money that we all know is going to go away, and c) everyone is pretty sure we’re going to get cut big-time from the state next year.
And just now, a friend/colleague of mine who teaches at Michigan State posted something kind of alarming: “Possible MSU cuts: 30 programs, 2 departments, 600 jobs.”
So, what’s the deal here? Who is spinning the numbers at EMU, Moeller or the administration? How is it possible that EMU’s overall financial picture seems rosier than MSU’s? Anybody know anything?
I heard a similar story from a U of M Professor who was told by their dept. head that the funding cuts next year would be like falling off of a cliff.
It is always dangerous to assume that a current surplus should be spent because one has to plan for future cuts, etc. The idea of jumping on a short term “raise” needs to be buffered with economic realities. Other types of cuts may happen (as stated previously), basic supplies for the university may increase in cost, etc. I’d rather move slower and plan ahead then spend asap.
Agreed SS. For an university our size, $5.8 mil is a drop in the bucket and can be easily spent very quickly if cuts come. I am somewht concerned by some of the posturing being done by the faculty union leading up to negotiations. Hopefully all parties can work together to keep EMU strong.
Cut proposed by MSU for 2010:
http://www.detnews.com/article/20091031/SCHOOLS/910310309/1026/Michigan-State-proposes-shutting-2-departments–cutting-40-programs
I mostly agree with SS and Brad about not spending the surplus for the sake of spending the surplus. But one of the quirky things about budgeting at EMU (and I think this happens at a lot of places) is that anything that my department doesn’t spend by the end of the fiscal year at the end of June goes away and is not carried over into the next year’s budget. In my department, if we had $5,000 or so left over in our operations budget, we wouldn’t get to keep that for the next year; it’d disappear.
So, the common practice is for departments to spend that money, even if they don’t necessarily need to spend that money on something. Better to have (for example) extra paper or computers or other supplies which can carry over to the next year then to have nothing. I don’t know if that is what’s going to happen with this mystery surplus money or not, but it would make perfect sense to me if that was what happened. Use it or lose it, as the saying goes.
Excellent point. Where is the incentive to be thrifty and to spend wisely? I have experienced the same thing. End of the year comes and department head runs around asking people to spend the money on anything.
For years – probably a decade or more – EMU budgets were set in one year without the actual spending in the previous year being reconciled to what sums had been budgeted per line item. This was insanely idiotic of course but it’s all that the “suits” of that era were required to do. Try that at home, and you’ll lose your home. Now, in the last two years, and no longer, EMU is starting to implement a rational budgeting process. Tip of the hat to John Lumm and his staff and Sue Martin for these changes. But EMU is still far from actually doing what needs to be done – setting budgets according to solid strategic goals. Given how badly priorities have been set in the past, there’s reason for reasonable people to doubt that the current surplus – which is real, thankfully! — will be wisely used. For years, EMU suits have cut student support and academic offerings, and the result is a lack of progress in the areas of student retention and academic success, which deepens the economic/fiscal difficulties of the university. It’s a brutal cycle. Getting a rational budget process started up from scratch has been hard work — but the hard choices required with true strategic budgeting haven’t been undertaking and EMU management still lacks the capacity to collect the information which strategic budgeting requires.
Personally, I’m very pleased that the university has an actual surplus this year, largely due to the increase in enrollment for the first time in 5 years. That’s great news. It’s controversial only because of the years of mindless management EMU has suffered, and the resulting doubts about the university’s capacity to use money well. Spending it on strategic priorities makes sense – what who’s to say what such priorities are?