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Since the release of Gov. Dunleavy’s budget in February, there have been many unknowns that have complicated the planning process. These unknowns persist to this day, and we eagerly await resolution of the state’s budget so we can get going with the new year. As we wait for the state budget issues to resolve, I want to thank all of you for your tireless and relentless support of our university’s budget. Thousands of university students, staff, faculty, alumni and friends are weighing in with the Legislature and as a result, there is a possibility of improvement.
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As you know, the budget cut was unprecedented in its magnitude, and early on, the Legislature signaled that it would not stand. For these reasons, the universities were directed to plan for scenarios that ranged from no cut to cuts as deep as $30 million systemwide, with a sliding scale of internal reinvestments.
These cuts were contemplated, and with some elimination of facilities and other cost-cutting measures, I asked units to plan for a 10% reduction to the unrestricted general fund, or UGF, for FY20 budgets. The Legislature passed the modest cut of 1.5% ($5 million) for UA, a much more manageable version compared to the governor’s proposed cut of 41% ($136 million). The planning needed for a $5 million cut is completely different from what we need for a $136 million cut. President Johnsen has presented some stark options to the Board of Regents to meet the governor’s budget after he vetoed it back to his original $136 million cut. Unfortunately, we are already in the new fiscal year with a major state funding budget cut now in effect, requiring decisions in the very near future.
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Several weeks ago, before we heard about the governor’s veto, President Johnsen asked that each chancellor send him some specifics about how each university could reach a more significant cut, such as $30 million in unrestricted general funds at ÃÛÌÒÓ°Ïñ (with different targets for UAA, UAS and SW). In consultation with vice chancellors, I outlined some broad thoughts around programs, services and facilities where this larger set of savings may be achieved, recognizing that this may be altered through broader input and feedback as we learned more about state funding. The following areas were discussed.
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Possible one-time cost savings
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- Employee furloughs
- Hiring freeze – 90-day holds
- Building or property sales/reducing footprint
- Administrative Services
- Underutilized facilities in several of our remote satellite areas
- Undeveloped or high-value property
- Use of central reserves to offset immediate cuts
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Items considered for potential reduction
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We regularly review all programs. We would examine programs that had recently undergone program review to reevaluate decisions made before the current budget environment. We would also review IPEDS data that shows cost structure of programs. These would include:
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- Reviewing some 15 departments and programs based on high cost structure
- Reviewing about 30 additional programs that went through special program review in the last three years
Service and outreach is a critical part of what we do. However, we would have to consider if there are reductions in services that could be made for areas including but not limited to:
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- Reduction in some services such as the Marine Advisory Program, Cooperative Extension Service and K-12 outreach
- Moving some service areas such as KUAC and the Mining and Petroleum Training Service to more user-supported funding models
- Reduction in operating hours for auxiliary services and/or areas such as the library and museum
- Reduction in facility maintenance
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I have also received many recommendations for reductions in administration that might occur through mergers and consolidations. Included in these were possible mergers of colleges and research institutes such as engineering and management, and IARC and GI. These would be considered, but the impacts would also need to be quantified.
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Additional efficiencies might be achieved by expanding shared services. Many units have adopted shared services already as a way to maintain service, improve backups and share expertise. It is possible to grow this concept through:
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- Expanding shared services travel hubs
- Increasing the procurement technician program and migrating high-expertise procurement (with increased delegation of authority, up to $25,000) to fewer locations
- Shared pre-award and post-award management
- Shared personnel and payroll assistant services
- Shared fiscal technician transactional processing
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Reduction in adjunct teaching has also been contemplated as a way to reduce costs in areas where multiple small sections are offered or where permanent faculty exist to teach those courses.
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All of these items listed for consideration are just that — areas for consideration. Each idea is not without trade-offs, and remains to be vetted. Unfortunately, we still do not have the final word on our budget and we do not have clarity on university system structure. The BOR will be meeting on Monday, July 22, and again on July 30 to discuss the budget and university structure, and this may provide some insight on how we move forward.
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I was interviewed this morning by a reporter from the Washington Post. After covering the waterfront on the budget process and what the potential cuts mean, she asked if there was anything I did not cover.
What an opening.
What was not yet covered was a message of hope and optimism for our future. We subsequently discussed ÃÛÌÒÓ°Ïñ’s strategic goals, solidifying our leadership in ÃÛÌÒÓ°Ïñ Native and Indigenous programs, achieving Tier 1 research status, having a modern student experience, and commercialization of research among them.
I also talked beyond our current crisis and about ÃÛÌÒÓ°Ïñ’s long look, our hopes and expectations for our great university. Among the topics we discussed was ÃÛÌÒÓ°Ïñ’s Center for One Health Research. One Health research gives nearly all lines of inquiry at ÃÛÌÒÓ°Ïñ the opportunity to address human, animal and environmental health. Human well-being (including our own) has never been more important than it is now. Take care of yourself and others.
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Thank you for your continued support and dedication.
— Dan White, chancellor
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