‘Unprecedented in Our History’: One State Is on the Verge of Slashing Higher-Ed Funding, Leaving Public Colleges in a Panic

Updated (7/1/2019, 4:31 p.m.) with additional information on the line-item vetoes and outside comment.

Layoffs of tenured faculty members. Eliminations of academic programs, even entire campuses. A brain drain from a state that can ill afford to lose the talent the University of Alaska nurtures.

On Monday, as a new fiscal year began at the University of Alaska, employees, students, and alumni expressed shock and fear at the news that Gov. Michael J. Dunleavy had slashed the university system’s budget by 41 percent.

He did so by vetoing the $130-million state-supported portion of the university’s operating budget. Combined with a $5-million cut already approved by the state’s Legislature, the university has been told to cut $135 million, or 41 percent, from its current state-funding level of $327 million. The cuts apply to the 2019-20 fiscal year, which began on Monday.

“We can’t continue to be all things for all people,” the Republican governor said at a news conference broadcast statewide.

James R. Johnsen, president of the University of Alaska, described the cuts as more than twice as deep as the worst case the system was preparing for. He described the governor’s action as “devastating” in a video address posted Friday on the university’s website.

Johnsen urged listeners to contact their legislators and urge them to override the veto. If the override effort fails, he said, the system’s board “will be forced to declare financial exigency.”

The Legislature will go back into session on July 8 and will have five days to vote to override the veto. That would require approval by three-quarters of the Legislature — a task university administrators concede will be extremely challenging.

‘Fear and Confusion’

Regardless of the vote, the university has already taken several major steps to save money. In addition to freezing hiring and travel, the system will send furlough notices to all staff members statewide, requiring them to take a specified number of days off without pay. Systemwide, Johnsen said, the university will need to cut 1,300 faculty and staff positions.

Last week Johnsen warned, in a local newspaper op-ed, that “the university cannot absorb an additional, substantial reduction in state general funds without abruptly halting numerous student-career pathways midstream, eliminating services, or shutting down community campuses or universities.”

He added that “an extra cut of even $10 million — on top of the $51 million in cuts we’ve already taken — will mean the discontinuation of programs and services with little or no notice, and that in turn will have ripple effects, damaging UA’s ability to generate revenue and causing even greater harm across the state.”

The $327 million the university received from the state for the previous fiscal year represents about 40 percent of its total budget. The rest comes from tuition and fees, research grants and contracts, proceeds from land development, and private grants.

Over the last five years the university’s budget has been slashed by $195 million. Its statewide administration has been reduced by 37 percent over the last several years, Johnsen said.

The governor had proposed deep cuts for the university system in his original budget, in February, saying they were needed to help close a $1.6-billion budget deficit facing the state. During budget negotiations, lawmakers reduced the cut to $5 million, allocating $322 million to the university system.

The cuts announced on Friday, he said, will allow the state to balance its deficit over two years without raising taxes or reducing the amount state residents receive through the Alaska Permanent Fund, which is fueled by oil and gas revenues.

The cuts in the university system represented the largest chunk of the $444 million in total savings freed up by the governor’s line-item vetoes. Other areas that suffered cuts were public safety, health programs, early education, and legal services for low-income residents.

The state, Dunleavy said, “can no longer afford to continue down the path of oversized spending, outsized government, and out-of-line priorities.”

Jahna Lindemuth, a former state attorney general, responded in an opinion piece in the Anchorage Daily News that the cuts were “not only irresponsible, they are unconstitutional.”

Daniel M. White, chancellor of the university’s flagship campus, in Fairbanks, said the focus this week will be on urging a veto override.

The system’s Board of Regents is scheduled to meet on July 15, by which point it will know whether the override attempt had succeeded. If it fails, the board could declare financial exigency, allowing the system’s universities to dismiss tenured faculty members and discontinue programs more quickly.

Such a move, if not unprecedented, would be extremely rare, according to Mildred García, president of the American Association of State Colleges and Universities.

“While there have been individual campuses that have declared financial exigency, and some systems have threatened to do it, we are not aware of any actual statewide systems that have declared financial exigency,” she wrote in an email.

White said that there is “a lot of fear and confusion” on his campus, and that the governor’s decision to wait until the Friday before the start of the new fiscal year to announce the cuts is making the challenge even greater. So is the fact that it’s the summer, when most faculty members and students are away.

“This is a budget cut that’s unprecedented in our history,” White said in an interview on Monday. “People are pulling together. We’ll do the best we can.”

Pruning the Tree

Cathy Sandeen, chancellor of the University of Alaska at Anchorage, said in an interview that while administrators would be meeting with advisers and supporters to push for a legislative override, they would also meet among themselves to talk about program eliminations.

They will start by gathering data on enrollment, revenue generated, work-force need, and other factors. Alaska faces a huge demand for health-care workers, for instance, so that would factor into any program-elimination talks, she said.

Many faculty members’ contracts don’t begin until mid-August, so any action would have to wait until they return, Sandeen said. In the meantime, she plans to spend this week communicating with faculty, staff, and students who will be affected by any cuts.

“I want to reassure people as much as possible and express my empathy for what might happen,” Sandeen said. “I have to give hope but be realistic at the same time.”

The program-elimination process “will be like pruning a tree,” she said. “Some branches will go away, and some will remain strong.”

Those to be eliminated must have a viable teach-out option — something that’s not only required for accreditation but also “morally” the right thing to do, Sandeen said. Students might continue their studies in a reduced department, they could transfer to another college, or they could finish through an online program offered by such institutions as Arizona State University and Western Governors University, she said.

Scott Downing, president of the Faculty Senate at Anchorage, said the cuts would be devastating, in both the short and the long term. “We’re talking about potentially 1,300 faculty and staff cuts” systemwide, said Downing, who is also an associate professor of English at the University of Alaska. “This will affect the university for years to come.”

Katherine Mangan writes about community colleges, completion efforts, and job training, as well as other topics in daily news. Follow her on Twitter @KatherineMangan, or email her at katherine.mangan@chronicle.com.