Once again, I’m struck by how it is far too nice outside for a meeting like this (I wonder if these folks would be willing to move out of doors?), and once again, I’m multi-tasking, both blogging and working on some classes I’m teaching. But here’s the live blogging as far as it goes. It looks like a PDF of this is already online here:
http://www.emich.edu/busfin/docs/budget-forum-august-2010.pdf
More after the break.
- Two differences so far: it’s two pm, and there’s like no one here– I mean 30 people, tops. Second, production values are high! Video, big screen projector, the snazzy auditorium, etc., etc.
- Susan Martin opens: “This is a budget forum, but not about ongoing bargaining– that’s a different thing, we’re not going to talk about any of that, it wouldn’t be appropriate.”
- Martin says enrollments are not up to the point where it wants to be.
- The stuff on health care reform says it throws things off too.
- Lumm talking– very much emphasizing that this was part of an ongoing forum. Translation: seriously, we’re not really going to talk about bargaining.
- Lumm promises a “boring” dive into the finances of EMU. Great…. BTW, he’s talking about stuff right off the slides that were on the site above.
- “Our balance sheet has been pretty stable over time.” But “these are just numbers,” and he talks about this in relation to stuff like Moodys, Standard and Poors, etc.
- One of the things that’s kind of interesting to me is that WMU is really not in good shape relative to this stuff he’s talking about. Anyway, with the current state of affairs, Lumm says our abilities to go out and borrow are limited. And then he lists a bunch of stuff about raising money– fund raising, state aid, etc. Seems like tuition and fees might be a way to raise money, right?
- To me– and I’ll be the first to admit I don’t get all this– it looks like we’re kind of in the middle of the pack of the schools we are compared to. The take away is with $60 million in reserves we’re not broke, but (obviously) the admin would like to have more reserves.
- Moving on to the talk of the budget. 71% of the revenue for EMU is tuition and fees, and 27% is state appropriation. As Lumm says “those percentages were much different earlier in the decade.” Again I wonder: then why cut your revenue by not charging anything for tuition and fees?
- It’s never a good idea to use reserves to fund operating expenses.
- Looking around, I guess I’d say there about 60 or so people here.
- Basically, enrollment is not up high enough yet from their point of view. The state appropriation is probably going to be down about 3.1%
- “And we built the budget, we didn’t fully understand what the health care act would do.”
- Good news is we’re saving money on utilities and servicing debt.
- Health care stuff: 19-26 year olds will have a major impact. Lumm is stumbling over this health care stuff in sort of interesting ways.
- Sharine (sp??) Boone who came on 90 days ago is gonna talk benefits now. A slight techno glitch….And a new slide show. Not sure where this slide show. Reading off of a big slide with lots of text….
- Our plans are more or less self-insured, but we use the benchmarks from BlueCross/BlueShield.
- The “annual cost” slide seems a little deceptive to me.
- Talking about the “challenges to healthcare.” Talk about a euphemism! And “health care” is two words.
- Again, there’s something I don’t understand here: given that this stuff was up in the air back in March and there was at least an educated guess as to how these expenses were going to go up, then why risk the 0/0/0% plan?
- We don’t know how many children are going to do this, but they picked 500 children. That seems like a very large number to me.
- She’s going on here a bit with some of the stuff about the complexities of health care, etc., etc. I suppose this is interesting to someone, but it seems like it’s more “case by case” than it is the sort of global issues that matter with the budget and the contract.
- Jim (I can’t think of his last name right now– sorry, man!) asks some good questions about the insurance issues, and said “this is in bad taste.” Maybe. But I don’t buy that the answer that the timing is coincidental.
- Martin said “the bargaining does make people want to ask a lot of questions.”
- Someone asked about can we divide up the salary pool between faculty, staff, administrators, etc. (good question). And then there was some discussion about how the assumption was based on 3.4% increase in enrollment.
- Lumm says it’s hard to figure out what our balance of the budget will be at the end.
- Jim Vanderbosch! Sorry about that….
- At the end, I asked if, given the budget problems being described here, if the 0/0/0% thing was a good idea and if they thought it might change. Martin went into some detail in answering “yes,” as did Lumm. They didn’t answer the question about whether or not they will raise tuition.
- And that was pretty much it. Overall, pretty boring.
I will say this about the 0/0/0% thing and the way they talked about the budget: I am far from a “money guy” with these things, but it sure seems to me like from the way they were talking about this, the 0/0/0% thing was perhaps more of a gamble than they perhaps thought or considered.
While I appreciate that the 0/0/0% thing is a good marketing catch-line, there’s no good evidence that it has actually brought in students. If anything, the fact that enrollment is slightly below projections suggests the opposite of this. And really, this isn’t that surprising since tuition expense is not necessarily that high on the list as to why someone does or doesn’t attend a particular school. I mean, U of M is a few thousand dollars a year for tuition, but does anyone really believe that someone chooses EMU over U of M for that?
I just wished that we would have had a 2/2/2% or 4/4/4% marketing campaign instead….
Nice that you were at the forum. It would be great if the 0% brought in new students but what about giving a tuition break to the students that already attend here? Or have you forgotten about them? Oh yeah…that’s right! You all are more concerned with getting your 2/2/2 or 4/4/4. What happened to Education First? Sounds to me like faculty is more concerned with lining their pockets first.
Krista, with your kind words here, I’m surprised you didn’t say hi!
First off, I have said before and I will say again that I am not so sure that this 0% campaign was, in hindsight, a good deal. A lot of people, including many of my faculty colleagues, friends, the union and others, disagree with me on this. There is no doubt that the 0/0/0% campaign has brought the institution a lot of good PR, and I think that Martin is perhaps right that it *might* pay off in the long-run. But you know what? a 1/1/1% “Eastern first!” or 2/2/2% “to Eastern!” campaign also would have brought good PR and would have come closer to giving enough of a cushion to the health care budget that we wouldn’t be about to go on strike. A 1 or 2% increase in tuition for almost all students is not a deal-breaker; a 1 or 2% decrease in revenue at a place like EMU, already running a very “cut to the bone” kind of operation, is.
Further, there is no evidence that the 0% campaign has brought in more students, there is no evidence that the 0% campaign retained students, and given that EMU looks like it is going to miss its enrollment targets, you could make as good of a case that it actually hurt enrollment. I know that seems counter-intuitive, but it wouldn’t be the first time that sort of thing as proven to be true. And besides that, if students in this area made their decision on what university to apply based primarily on which school has the lowest tuition, then we’d be the “highly selective” university that had to turn away two-thirds of applicants and the U of Michigan would just be the school with the football team.
In short, I was dubious of the 0% campaign before (and said as much here), and I think your characterization of the faculty “lining their pockets” is ignorant and unfounded.
Second, while I am always reluctant to do so here at EMUTalk.org, I have and will delete comments I find insulting, rude, and otherwise not constructive. As someone I know used to say to her students, you are on the verge of “taking up too much space.” So as an educator and as a moderator, I would kindly encourage you to take some time to read the comments of others before you engage, and debate with others responsibly. If you do not want to do that, either start your own blog or you may find your comments deleted.
I spoke with a colleague from CMU about a variety of items recently. While I can’t remember the exact number, she indicated that their enrollment was up considerably–I believe more than five percent. The CMU tuition inrease was a little more than two percent.
http://www.cm-life.com/2010/08/19/tuition-increase-of-2-06-percent-this-summer-lowest-since-millennium/
While I certainly believe IHEs need to contain costs, there is a larger issue of public disinvestment in public education. The state has reduced it’s share drastically over time, (past 40 years) and I can’t see how this has improved Michigan’s lot. One thing I’m don’t believe the current leadership understands is how much cutting we did in the mid 2000s, including cutting positions. I sense that people are becoming really weary.
It’s sort of odd to me that anyone would consider selling a service that no one will pay for. Krista is essentially saying that she feels the value of her education does not warrant the price. If that’s the perception, the marketing campaign has failed catastrophically.
Steve, like so many people are saying, thanks for posting and sharing all this stuff. I, for one, appreciate the news.
I will withhold any comments on whether I think 0-0-0 was good budgeting or financial management. Many people, on both sides of the table, have forgotten more about these topics than I will ever know; my own analysis is not sophisticated enough to share.
But one thing I do feel confident in saying is that the 0-0-0 has generated good publicity for the school. Like you, I’ve been here long enough to remember bad publicity – REALLY bad publicity. Times when I was embarrassed to tell people where I worked. There is no denying how that bad publicity drove down morale numerous times in the last decade. Now, with the 0-0-0, people are speaking positively of the school. I was at a reception last night with EMU people and community people, local and from the Oakland county area, and people are speaking about EMU having momentum, having positive messages on billboards, hearing good things about the school. I think anyone who has been here for any length of time will note how different that is, and, in my humble judgment, how refreshing that is.
So, was it a good financial call? I don’t know. Did it drive enrollment in the Fall 2010 semester? Dunno. But it has people talking positively about EMU, and that makes it better for everyone.
As we approach my fourth strike while at EMU (four!!!!), like so many of my colleagues I fear the loss of momentum a strike will cause. If you look at the “Talk Backs” on public forums (like at AnnArbor.com), it’s hard to imagine the broader community people rallying to the cause of striking academics. Yes, the administration proposal is low, too low. They need to do better. Yes, I don’t want to end up with a net loss in my net income for next year. But I am uncomfortable, tremendously uncomfortable, with walking a picket line in this economic environment, with so many of our students’ family members out of work, or facing reduced hours, or struggling mightily to get by.
The image of the administration reaching out to students with 0-0-0, and the faculty turning around and striking, is uncomfortable to me. I know the union CAN strike – perhaps the financial numbers indicate that we have something to gain by doing so. Perhaps the administration’s offers leave them deserving of a faculty strike. I won’t rule that out. But I do hope that the union leadership will truly view the strike as a last, tragic, horrendous choice, rather than as a routine step in the bargaining process.
And, I hope both sides at the bargaining table will realize how easy it is to turn back the clock on recent progress and return us to the days where we were a laughingstock of the community. Let’s not go back there.
Thanks, Jeff.
I’ll get to the strike or to not strike in another post, but as far as the enrollment question goes: I am becoming more and more convinced that the 0/0/0% thing might look good, but it didn’t actually deliver more students. I heard recently that while overall enrollment is up (but not up 2.2%), that new student enrollment is actually down from last year, and graduate student enrollment is way WAY down.
Why? I can imagine lots of things, but it seems to me that this is more evidence that the 0/0/0% thing did not succeed in the sense that it was supposed to give us good PR (check) and increase enrollment (not check).
I concur with Dr Bernstein on all points, especially his questioning the wisdom of any faculty strike. I concur too on the thanks to Sitedad for covering this health care costs forum. Thanks!
But I am not as humble, perhaps, as Dr. Bernstein, so I will boldly state my views on 0-0-0: I think it was a good idea, and I’ve advocated such steps for years. The point of freezing tuition, however, must be deeper than a mere one year target of increasing enrollment. To implement 0-0-0 successfully, a serious budgetary reform was necessary, and it wasn’t made. Yes, I am talking about cutting expenses, and millions of dollars in EMU spending could be cut with no impact on students’ education. That such cuts were not made shows that the 0-0-0 was more of a gamble than a serious undertaking of needed reforms, more of a gambit than a serious institutional strategy. And no, I’m not talking about reducing student services or classes or faculty or other teachers. Millions can be saved with zero impact on academics.
Future enrollment growth at EMU will depend mostly, especially first year students, on radically increasing student satisfaction with their experiences at the University. Hence, we need to shift resources to student priorities: academics and student services. When that’s done, really done, we’ll not have the huge drop out rate we have, and our students will talk up EMU.
In the “for what it’s worth” category of things: The slides for the health care part of the presentation have been posted:
http://www.emich.edu/negotiations/documents/HealthCarechallengespresentation.pptx
Even though the administration folks insisted at this meeting that it had nothing to do with the on-going contract negotiations and they were just telling us stuff for the purposes of informing people, etc., etc., etc., the administration posted this stuff explicitly as part of their negotiations updates. Look at the URL.
Gosh, I wonder why faculty think that the administration’s motivations and presentations here might not be completely pure?