UA president has big ideas to manage smaller budgets

  • By ELWOOD BREHMER
  • Thursday, April 7, 2016 9:17pm
  • News

There are major changes coming to the University of Alaska.

Many of the changes will, unsurprisingly, be budget driven, as Alaska’s institutions of higher education absorb their share of the state’s $4 billion budget deficit nightmare.

However, UA President Jim Johnsen said in a March 30 interview with the Journal that strictly focusing on improving the bottom lines at Alaska’s campuses would miss major opportunities to reinvest in what they do well.

“I think it’s much smarter for the university, in its mission to serve the state well, actually to be clear and conscious about what our priorities are, and even though our budgets are being reduced, to actually focus on — set aside money for — investment in key areas even as we’re being cut,” Johnsen said. “Some people think that’s nuts. They say, ‘Let’s all stick together here and everybody take a 5 percent or 10 percent or whatever reduction and we’ll all be here and we’ll save our jobs.’”

Now seven months into the lead role, his primary goal is to avoid what happened to the university system after Alaska’s first oil price-driven fiscal crisis.

Johnsen’s first job with the University of Alaska came in 1996, when he was hired as director of labor relations. He saw a collection of schools with “demoralized” and thin ranks of faculty and staff after years of rash budget cuts that started in the late ‘80s, Johnsen recalled.

“There was nothing that was excellent — that was carrying people through — and so I want to focus on distinctive and unique strengths of each one of our universities,” he said.

Johnsen was UA vice president for administration when he left the system for the private sector in 2008.

Determining what Anchorage, Fairbanks and Southeast do well is the easy part.

The University of Alaska Fairbanks is the most oft-cited Arctic research institution in the world. In the R/V Sikulliaq, its School of Fisheries and Ocean Sciences has operating rights to one of the nation’s premier research vessels. Through partnerships with Oregon and Hawaii, UAF leads one of a handful of federally designated test sites for unmanned aircraft research.

“Research is going to happen in Alaska; it’s going to happen here for many years,” Johnsen said. “Are we going to let Dartmouth do it all or the University of Colorado, because they’re going to do it, or do we train our own research workforce?”

UA Anchorage prides itself on its nursing and engineering programs. UAA’s Institute of Social and Economic Research was another “unique strength” Johnsen cited.

The economic impacts of prospective state budget cuts detailed in a study led by ISER Director Gunnar Knapp were sought-after figures as the House and Senate drafted their respective versions of the state operating budget earlier this session.

The University of Alaska Southeast is Alaska’s primary liberal arts institution, but also runs the world-class Center for Mine Training.

Strengthening what the state’s universities already do well will not come without sacrifice, however, particularly when the system’s budget is not getting bigger.

Gov. Bill Walker’s 2017 fiscal year budget proposal would cut the university’s unrestricted General Fund budget by about $15 million, or about 4 percent, to $335 million. That would be on par, percentagewise, with the cut in the current 2016 fiscal year.

Unrestricted General Fund support from the Legislature accounts for roughly 40 percent of the UA budget. It peaked in fiscal year 2014 at $371 million.

This year, the Senate passed a university cut of about $25 million; in the House it was closer to $50 million. The final UA budget will be hammered out in a conference committee in the coming weeks.

The three main campuses absorbed the cuts in the current 2016 fiscal year primarily — without discounting some employees who were laid off — through attrition and defunding vacant positions.

Johnsen said the university system will continue to eliminate vacant positions and try to minimize layoffs, but also noted that capturing savings through employee attrition doesn’t allow UA to chart its own course.

With hesitancy towards cutting faculty, the only place to turn is administration.

The Senate’s budget could mean cutting between 300 and 500 positions statewide, according to Johnsen.

“I think the people of Alaska are going to demand if you’re reducing academic programs by ‘X’ percent, we’d sure like to see your administration reduced by a comparable or more percent,” he said.

He added that on top of the now yearly budget cuts, the UA system absorbs about $25 million per year in “unfunded mandates” — negotiated salary increases, benefit increases and ever inflating deferred maintenance costs.

The system’s latest estimates put its total deferred maintenance need at roughly $700 million. The administration proposed $10 million for university deferred maintenance needs in its capital budget.

Johnsen emphasizes to legislators that he understands the university budget can’t be spared, he said, but at the same time that it can’t absorb drastic cuts if it is to successfully “bridge” to a leaner, more focused and prosperous future.

He said a drastic cut this year from the Legislature would expedite and challenge the system’s Strategic Pathways initiative to evaluate structural academic program reform.

Johnsen pitched the Strategic Pathways to the Board of Regents in January and has said it would take two or three years to fully identify and implement the changes with the funding in the governor’s budget.

If the UA unrestricted General Fund appropriation is much less than the Senate’s proposed $325 million for fiscal year 2017, Johnsen said, “It’s going to be very, very difficult to take that kind of time to do a deliberate, data-based and really inclusive process and so then it’s going to have to be sharp and it’s going to have to be pretty fast and when you do that you end up with unintended consequences.”

A piece of the near-term funding bridge will probably be another look at tuition rates, he said, but that decision is ultimately up to the UA Board of Regents. At an average of about $6,100 per year for lower level undergraduate resident tuition, Alaska’s campuses remain among the most affordable state schools in the nation, despite the fact that the UA Regents have increased tuition by 5 percent each of the last two academic years.

Johnsen also noted that Alaska ranks very high in terms of the state’s per student contribution from its General Fund to its universities.

“It’s the share of the cost that students bear; we’re super low,” he said.

However, he hopes to de-link, at least to some degree, tuition at the system’s community colleges from the three main campuses. Tuition at Alaska’s community colleges is the same as at the three large campuses because the satellite schools are extensions of the hub universities. That has led to Alaska having some of the lowest traditional university costs but some of the highest community college tuition in the country, Johnsen said.

He commended the Kenai Peninsula Borough for voluntarily supporting the Kenai Peninsula College in Soldotna with about $700,000 of property tax revenue each year and suggested that could be a model used at some of the other community colleges.

The future, according to Johnsen, also likely includes consolidating some of the system’s 478 degree and certification programs to specific schools, as many of them are duplicated across the state.

Through increased use of distance learning between campuses, students could receive the same education without the expense of redundant faculty and classroom space for some programs, he surmised.

He has also discussed the concept of admissions standards, at least for the three main campuses, with the leaders of UAF, UAA and UAS. Some sort of academic requirement to enroll at the universities would address the issues of high numbers of students with remedial course needs as well as the system’s poor graduation rates for baccalaureate students, Johnsen said.

“Fifty percent of our students require developmental or remedial education,” he said. “Fifty percent, that is a whopper of a number; and you’re not getting credit towards a degree for that (coursework) and yet you’re writing a check for that — you’re borrowing money for that.”

Less than 30 percent of UA students working towards baccalaureate degrees graduate within six years, according to the UA system. That is roughly on par with other open enrollment universities, but is far short of the 56 percent graduation rate after six years nationwide.

By funneling students that need refresher courses to the community campuses first, in a more traditional higher education model, students should be better prepared to successfully pursue their degrees once at the main universities, Johnsen said.

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.

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