UA prioritizes its way through budget cuts

  • By ELWOOD BREHMER
  • Sunday, August 30, 2015 11:03pm
  • News

University of Alaska leaders are trying to minimize the impact of budget cuts on the new school year while at the same time remodeling operations to make institutions statewide more efficient.

In raw numbers, the UA System absorbed a $26.3 million cut from the Legislature to its unallocated General Fund appropriation, according to the operating budget approved by the Board of Regents. However, the actual cut is closer to $31.4 million, UA officials say, when unfunded fixed cost increases, such as pay raises for union employees are included.

Most union faculty and staff throughout the system received 2 percent pay increases July 1, the beginning of the 2016 state fiscal year.

Direct state appropriations account for about 40 percent of the overall system budget each year. The overall budget is $920.6 million for the current fiscal year, $355.7 million of which came from unrestricted General Fund dollars.

Statewide Programs and Services took the largest hit percentage-wise with a $4.9 million cut from a 2015 fiscal year appropriation of $28.3 million, UA Vice President of University Relations Carla Beam said. Beam also serves as president for the UA Foundation.

The statewide offices are making ends meet through program cuts, furloughs and direct staff reductions, according to Beam.

Staff reductions totaled 17 positions statewide from a count of about 240 employees. UA senior leaders and administrators will be furloughed for seven to 10 days, while non-union faculty, such as deans and heads of university institutes will take five days of unpaid leave this fiscal year.

Savings were identified from a 90-day hiring delay.

“As we curtailed spending in fiscal year 2015, we were able to keep over some funds that are also helping fill the gap,” Beam said.

She noted that the university system is not allowed to carry over general funds, but other revenues can be banked when available.

Other service and support reductions include terminating a contract with a Washington, D.C., firm that aided in federal relations. Beam said that will now be done in-house.

The fact that the cuts this year are not a surprise — growth in state UA appropriations slowed in 2013, funds peaked in 2014 and have fallen the past two budget years — has helped somewhat in preparing the mindsets for tough times, according to Beam.

It’s understood that tighter budgets will be the norm for the foreseeable future, she said, which is a mantra carried at the three major campuses as well.

“Just like the three universities are doing, we’re really trying to balance our near-term need to cut with preserving opportunities in the long term,” Beam said. “Looking at what can we cut so we can reallocated funds to things that might provide long-term benefits, either in cost reduction or revenue generation.”

University of Alaska Fairbanks

Research costs money, and Alaska’s primary research institution, the University of Alaska Fairbanks, receives the largest share of state funding, despite having a significantly smaller student body than the Anchorage campus.

UAF’s portion of the overall state budget cut is $13.1 million from its $179.2 million base 2015 appropriation.

This fiscal year is the third-straight year of state funding reductions at UAF.

The actual gap is closer to $20 million when university-specific fixed costs, debt service and pay increases are factored in, according to a UAF budget report.

“UAF-wide, spending reductions in (fiscal year 2016) will amount to approximately 11 percent of state revenue and more than 7 percent of all unrestricted funds, which includes tuition, indirect cost recovery for sponsored activities and other external funding sources,” according to the report.

University executives will take furloughs and support and administrative service departments will take deeper cuts than academic wings of UAF to minimize direct impacts to students.

Over two years, spring 2013 to spring 2015, UAF’s total employee headcount has fallen by 205 positions, nearly 5 percent of faculty and staff.

Regular employees may be asked to work reduced contracts, for example, working 11 months per year, to save cash in the future. The measure is being implemented to some degree at the Anchorage and Southeast campuses as well.

Academic units under the provost were targeted for the smallest percentage cut of General Fund revenues at 11.4 percent. Rural, Community and Native Education was pegged for an 11.7 percent General Fund reduction and UAF’s 40-plus research centers and institutes absorbed a 13.3 percent General Fund hit. The chancellor’s office took the largest percentage cut at 17.3 percent.

University of Alaska Anchorage

The University of Alaska Anchorage is facing a $13 million shortfall from a base 2015 fiscal appropriation of $133.3 million.

“We’re doing everything we can to minimize the impact on our students,” UAA spokeswoman Sarah Henning said.

Students should expect longer waits for administrative procedures such as processing paperwork, she said, but UAA is also trying to give students a heads-up where services are reduced or slowed.

While more than 200 positions have been affected by the university’s fiscal plan, only 17 employees were laid off, according to a university release.

UAA’s satellite campuses in Kodiak, Kenai, Palmer-Wasilla and Valdez collectively took a $1 million hit. Academic departments in Anchorage will manage a $3.4 million shortfall, while support services at the main campus are facing an $8.6 million cut.

Significant indeed, but Henning said the university is grateful the cuts are not as great as some of the numbers that were discussed through the legislative session.

Each department was given a budget number to try to reach and staff was tasked with finding their own ways to reach the goal. Those recommendations were then rolled into the fiscal plan, according to Henning.

Additionally, UAA is canceling nearly 40 degree programs from certificates to master’s degrees and reworking dozens more as part of a prioritization effort started in 2013, long before the budget cuts of today were envisioned.

Henning said many of the programs were simply outdated and no longer fit UAA’s mission.

“Through prioritization, some of the changes we’re making are good ones regardless of the fiscal environment,” she said.

Henning noted that uncertain economic times in Alaska could push more people to further their education, and UAA is still ready to meet new demand, she said.

A new Doctorate of Nursing Practice program opened this year, the first doctorate offered specifically through the university, according to a UAA release.

“I want to reassure you that UAA remains a vibrant and resilient university,” Chancellor Tom Case said in a formal statement. “Our commitment to our students and employees — as well as to our incredible state — remains optimistic and forward-looking.”

University of Alaska Southeast

The smallest of the main three institutions, the University of Alaska Southeast, is absorbing a $2.3 million budget gap — 7.9 percent — on a $28.8 million state revenue base in 2015.

As a result, UAS was forced to eliminate 21 funded positions in fiscal year 2016, according to a university budget report. Like the larger schools to the north, Southeast is also saving through reduced full-time contracts — keeping less IT support during the summer, for example, Vice Chancellor of Administration and IT Services Michael Ciri said.

“Given the fact that between 60-80 percent of your budget, depending on how you count it, is staff costs, you really can’t get there without tackling the staffing side of the budget,” Ciri said.

Staff vacancies were shifted to non-essential positions as much as possible through promotions, he added.

In recent years UAS has sold buildings, reduced IT funding and continues to strive to be more energy efficient, efforts to defray fixed overhead costs.

“There’s been a huge emphasis to reduce our energy consumption, which hasn’t necessarily reduced costs, but if we were still consuming energy now at the rate we were in 2008 it would be costing us about $350,000 more a year,” Ciri said.

Still, like its much larger siblings to the north, UAS is eliminating programs. Among those is the school’s MBA.

UAS Live!, course delivery via broadcast television, is being cut due to staffing reductions.

Some required fixed costs make it more difficult for a smaller institution to absorb budget cuts, but Ciri said being able to adapt quickly because of its size has helped UAS through challenging budget times, now and before.

“We’ve been able to do some innovative things at UAS in large part because we’ve been able to be very fast moving,” he said. “Thus far, I would say that our smaller size has helped more than it’s hindered.”

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

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