Category Archives: Budgets

Budget problems worsen (and I like what BOR member Morris said)

Posted on October 19, 2011 by | 15 Comments

It’s been mighty mighty busy around here with my day job as of late, so I was happy to see a loyal reader send me a couple of links about ongoing budget problems at EMU, notably this annarbor.com piece, “EMU’s budget shortfall expands to $4.6 million.”   Here are the opening paragraphs:

EMU Chief Financial Officer John Lumm told the EMU Board of Regents on Tuesday that the shortfall, which was reported at $1.7 million at last month’s regents’ meeting, had ballooned to $4.6 million by Sept. 15.

When he first reported the shortfall at a Sept. 20 regents meeting, Lumm originally said the gap could grow to $5 or $6 million by the end of the fiscal year, which isn’t until June 30, 2012.

The university is developing a plan to cut back costs and accommodate for the potential deficit, Lumm told the regents Tuesday .

I’ve got two ideas for cutting costs right off the bat:  first, travel back in time and raise tuition enough to cover the expenses you knew you were going to incur.  As I said before and I’ll say again:  EMU probably would have laid off people over the summer no matter what, but had we raised tuition by 5% or 6%, we would likely not be in this situation now.

Here’s another idea:  maybe it’s time to fire Lumm.

One of the things that comes up in this article is some of the problem with EMU’s finances has to be laid at Lumm’s doorstep.  And Board of Regents member Mike Morris pointed this out.  Here’s a quote:

EMU has $87.4 million in investments. About 37 percent of that amount —or $32 million— is cash or short-term investments. Another 17 pecent constitutes moderate-term investments and the remaining 46 percent is long-term investments.

Morris contended that the university should more heavily invest some of the money it has in cash and short-term investment, which have low return rates. He highlighted the University of Michigan and Michigan State University invest more aggressively and see greater returns.

“I don’t know why we have so much money in cash and short term investments,” Morris said.

Why indeed.

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Posted in Administrator Life, Board of Regents, Budgets, In the media...

Not surprisingly, 3.65% was not enough to cover expenses

Posted on September 21, 2011 by | 20 Comments

At least that’s what I would have had for the headline for this annarbor.com story, “EMU’s budget shortfall could grow to $6M, regents told.”  Here’s a quote:

Eastern Michigan University enrollment levels declined this year, ending the school’s two-year growth streak and contributing to a growing budget shortfall.

EMU is experiencing a $1.7 million shortfall so far this fiscal year, EMU Chief Operating Officer John Lumm reported at a Board of Regents meeting Tuesday afternoon.

The gap, Lumm said, could grow to between $5 and $6 million by the end of the fiscal year.

The reasons include the enrollment decrease and a drop in investment income.
“The challenges we face are really twofold: The enrollment shortfall is one, the second one, which is way too early to draw any conclusion on, is the investment income,” Lumm said. “Investment income is tracking down year to year. The markets are down.”

The markets are down?  That’d make sense if EMU were an investment bank, but since EMU is a university which derives most of its resources and income from tuition, I somehow think that the artificially lowball “let’s throw some people under the bus” tuition increase might have something to do with it.

One more thing from this article:

“Obviously this is a pretty discouraging report,”[Board of Regents Chairman Roy] Wilbanks said. “If this track continues, the board is going to have to give some type of budget amendment.”

Lumm goes on to suggest that this “budge amendment” might mean more cuts, but as I said back in June, I have a feeling this 3.65% tuition increase is temporary.  Look for a bigger hike in Winter term, folks.

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Posted in Board of Regents, Budgets, In the media...

Enrollment remains flat despite EMU’s efforts at ridiculously low tuition

Posted on August 28, 2011 by | 9 Comments

That’d be my headline to this annarbor.com story.  We’ll see how it plays out this school year, but after 0/0/0% got us nowhere and after this year’s 3.65% so the administration could get rid of some people while doubling-down on a losing football program I mean to hold the line on expenses and still flat growth in enrollment, I wonder if the administration will start to take a different tactic.

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Posted in Administrator Life, Budgets, In the media..., Student Life

At least EMU isn’t Rutgers

Posted on August 17, 2011 by | 6 Comments

That’s not a phrase I’d generally use since Rutgers is a great university, but this article published by the Bloomberg news service, “Rutgers Boosting Athletics at Expense of Academics Fails to Emulate Texas,” actually makes me glad that our current Board of Regents isn’t gutting academics as badly here.  Believe it or not.  The opening paragraphs:

Rutgers University forgave $100,000 of the football coach’s interest-free home loan last year. The women’s basketball coach got monthly golf and car allowances. Both collected bonuses without winning a championship.

Meanwhile, the history department took away professors’ desk phones to save money and shrank its doctoral program by 25 percent. After funding cuts by the deficit-strapped Legislature, New Jersey’s state university froze professors’ salaries, cut the use of photocopies for exams and jacked up student tuition, housing and other fees.

Rutgers also increased funding for sports. The 245-year-old school spent more money on athletics than any other public institution in the six biggest football conferences during the 2009-2010 fiscal year, based on data compiled by Bloomberg. More than 40 percent of sports revenue came from student fees and the university’s general fund.

“I am dumbfounded,” said New Jersey Assemblyman David Wolfe, a Republican who is a professor of psychology at Ocean County College in Toms River. “Rutgers officials appear before the Legislature every year and claim they are underfunded and need more money. Now we find out we have the No. 1-subsidized athletics program in the country.”

That last passage there suggests Rutgers’ sports spending might come back to bite them in terms of state funding.  I wonder if the Michigan legislature will notice any of the funding for athletics at the expense of academics at EMU….

Oh, the bit about Texas mentioned in the headline is discussed later in the article.  Texas is one of seven universities (according to this piece, at least) that make enough money from football to pay the bills for athletics and beyond.  Note that:  seven out of what I would guess to be 200 (or so?) BCS universities.

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Posted in Board of Regents, Budgets, In the media..., Sports

Meanwhile, at Wayne State…

Posted on July 29, 2011 by | 3 Comments

A couple of interesting stories in the news about Wayne State (and Michigan State, too) both from the Detroit Free Press:

  • “Wayne State cuts 200 positions in face of $32M less funding.”  The opening sentences say “Wayne State University has eliminated 200 positions, spokesman Matt Lockwood confirmed.  Of those positions, 80 were currently filled. The exact number of layoffs will be known once union bumping processes are complete.”  So what this suggests to me that they are laying off 80 people and not hiring 120.
  • “State: Tuition hikes at Michigan State University, Wayne State University didn’t break rule — technically.” I heard a version of this on the radio this morning:  depending on how you count it, MSU increased tuition by 9.4% and WSU by 8.4%.  And then there’s also the issue of various fees and such that are being implemented all over the place (and that includes at EMU, BTW) that aren’t tuition but certain that impact the cost of attendance.  It’ll be interesting to see how this plays out.

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Posted in Budgets, In the media..., Michigan State U, Wayne State U

A couple of tuition rate stories

Posted on June 30, 2011 by | 11 Comments

First, an alert EMUTalk.org reader sent me this piece from CNN Money, “Extreme Tuition Hikes Ahead.” It might be paraphrased as “you think it’s bad in Michigan, you ought to see these other states.”

Second, from the New York Times comes “What’s the Most Expensive College? The Least? Education Dept. Puts It All Online.” That’s a little misleading too because of the different ways that costs are calculated, but you get the idea.  There are some links to some kind of interesting tools to look at to compare schools, as long as you realize the “ballpark” nature of a lot of the numbers.  There’s the College Affordability and Transparency Center and then this much more interesting tool, the College Navigator.

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Posted in Academics, Budgets, In the media...

Facebook folks: cast your vote in the Echo FB poll

Posted on June 29, 2011 by | 1 Comment

I noticed that the Eastern Echo has rolled out a poll on Facebook about the tuition hike.  Here’s a link to it; I think this should work to click on and then to vote, but I’m not positive.  Anyway, the question and answers are:

How do you feel about EMU’s 3.65 tuition increase?

  • It’s great!  The university kept students in mind when tackling the budget.
  • The university shouldn’t have raised tuition at all.
  • EMU should have raised it more to help balance the budget and save jobs.
  • I don’t care either way because I still have to pay tuition.

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Posted in Administrator Life, Board of Regents, Budgets, EMU President, In the media..., Professional-Technical, Staff Life, Student Life

“EMU saves 5.4 million”

Posted on June 29, 2011 by | 6 Comments

Well, that’s the headline on annarbor.com at least: “Eastern Michigan University will save $5.4 million from layoffs, attrition.” Here’s a quote:

Eastern Michigan University will save $3 million from the layoff of 38 employees and $2.4 million by not filling about 30 vacant positions.

The university laid off 38 employees last week, including 28 unionized workers and 10 from administrative positions as a result of the budget approved by the Board of Regents June 21, said Walter Kraft, vice president of communications.

Like I said before, if the rule of thumb notion that a percentage point raise in tuition raises a million dollars, then this merely confirms that these firings and layoffs– or at many of them– were avoidable.

There is some dispute about the number of people losing their jobs:  Kraft said there was 12 PTs laid off and the number in the union press release was 14.  I am sure someone who knows will chime in on that sooner than later.

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Posted in Administrator Life, Board of Regents, Budgets, EMU President, In the media..., Professional-Technical, Staff Life

EMU athletics like Austro-Hungarian Empire, says CHE, sort of

Posted on June 28, 2011 by | 5 Comments

Actually, the headline of the Chronicle of Higher Education article forwarded to me by a loyal reader is “In Athletics, Ambitions Compete With Costs: Median budget deficit at less-elite programs tops $9-million.” That headline sounds about right too– meaning that, give or take, EMU is dubiously above average in its funding of athletics.  But the article itself is a pretty scathing critique of what is clearly a national trend of funding athletics at the expense of academics at many EMU-like universities.  Here’s a long quote:

A forthcoming report by the Knight Commission on Intercollegiate Athletics finds that athletic spending among public colleges in the championship subdivision grew by 42 percent from 2005 to 2009, nearly twice as fast as academic spending. Meanwhile, institutional subsidies to athletics grew by 34 percent, according to the Delta Cost Project on Postsecondary Costs, Productivity, and Accountability, which did the Knight report’s analysis of per-athlete and per-student spending during that period.

Most programs at this level are far from financially independent, relying on institutional support and student fees to cover most of their expenses. Unlike big-time programs, they have smaller stadiums, fewer alumni and fans, and no rich media contracts.

The trends strike many as unsustainable. By continuing to spend so heavily on athletics, universities are overextending themselves, says John R. Thelin, a professor of higher education at the University of Kentucky who has studied the history of college sports.

“It’s like the Austro-Hungarian Empire,” he says. “They were the most loving of empires. They did everything by marriage and by granting wishes to every province and country. But at some point, you just knew it was going to implode.

“It’s not just an athletics problem,” he adds. “It turns into an institutionwide budget-and-mission issue.”

For the non-historically inclined: we don’t want to be like the Austro-Hungarian Empire.

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Posted in Budgets, In the media..., Sports

Thoughts as the dust settles on lay-offs

Posted on June 27, 2011 by | 39 Comments

It would appear that the administration’s/Board of Regent’s layoffs have settled out– that is, we seem to know the scope and reach of them.  A few thoughts I thought I’d share:

  • I’m surprised by the number of AP layoffs.  As far as I can tell, nine AP folks were fired, some who had been here as long as 24 years.  I’m not going to speculate too much on the thinking behind all the choices, though I heard from one soon to be former employee that the firing suit seemed to have a certain level of glee dropping the axe.
  • There have been some dean/associate dean-level positions eliminated too, including the dean and associate dean in Extended Program and Educational Outreach (aka Continuing Education).  I’m not really sure what that means; is that program going away and/or what?  That would include lots of online and alternative programs, right?
  • Susan Moeller sent around an email with a link to this all union press release. I’d include text from it here, they put it out in a PDF that can’t be easily copied for some reason.  The tally there is 30:  12 clericals, 14 PTs, and 4 physical plant folks.  I of course understand why the these folks are mad (heck, we’re all mad), though this press release seems a little all over the place and out of control to me.  Don’t write angry, folks.
  • In her email, Moeller also wrote:

    In addition President Martin was not around as the lay offs were occurring. She went out of town after announcing the layoffs at the Board of Regents Tuesday meeting. A real leader would have stayed and personally handled the layoffs to explain the decision to keeps millions in athletics and lay off 40 employees. She should be willing to explain to her employees why she did this.

    As EMU presidents come and go, Sam Kirkpatrick is remembered for the University House mess, John Fallon is remembered for lying about a student’s murder, and Sue Martin will be remembered for needlessly laying off employees and making Athletic’s First at EMU not Education.

    Time will tell how Martin’s legacy is impacted by this, of course. I blame the Board of Regents more than her and this is not the first time employees have been laid off at EMU, but I see Moeller’s point.

  • Just for the sake of argument, let’s say that the top suits (Martin, Lumm, etc.) and the Board of Regents did not have bad intentions.  Let’s assume they held tuition to a completely inadequate 3.65% increase not because they wanted to create a crisis to justify firing some people and/or to play hardball with the unions, but they really were keeping tuition as low as possible to benefit students.  Never mind that they knew they were benefiting students and the football team by firing people; I want to believe the suits and BoR aren’t doing this because they’re evil.  I really need to believe that these people aren’t evil.
  • But I do think these folks have made terribly wrong decisions, and I think the last couple of years focusing on keeping costs low low low (the press release emphasizes “fiscal stewardship,” the lowest increase for any state university three years running, etc.) demonstrate they are both not thinking of other universities around us and they are fundamentally misunderstanding the reasons why people go to a particular college.  Keeping things super cheap benefits students for the short-term at best.  Students don’t pick universities based on the cheapness thriftiness if its administrators; they pick universities based on programs of study, reputation, location, family and friends, social factors, and then costs, especially when costs are in the same basic range.

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Posted in Academics, Administrator Life, Board of Regents, Budgets, EMU President, EMU-AAUP, Faculty Life, Professional-Technical, Staff Life, Student Life