Don’t call it bankruptcy but financial exigency is very bad news for UA

The University of Alaska Fairbanks west campus (Photo by Frank Monaldo/Creative Commons)

The University of Alaska’s Board of Regents are set to meet today to consider making a declaration of financial exigency after a divided Alaska Legislature failed to override Gov. Michael J. Dunleavy’s veto of $130 million, which when combined with the Legislature’s cuts amount to 41 percent of the state’s funding of the system.

The declaration has been on the table since the university was blindsided by the governor’s veto when he announced the cuts in late June, nearly doubling what university officials had expected as a worst-case scenario for cuts. At the time University of Alaska President Jim Johnsen said the planning had “assumed rationality” and after the vetoes stood said everything is on the table for cuts.

The declaration is a recognition that the university no longer has the funds to cover its costs and allows the system to radically and quickly restructure, including laying off faculty who would normally be protected under tenure. Decisions on the shape of those cuts would be due on July 30.

“We’re looking at entire campuses, we’re looking at community campuses, we’re looking at university campuses, we’re looking at service programs that are important but may not be absolutely critically core to our mission, we’re looking at programs, colleges and schools where we have more than one of them … those are all options on the table,” he said at a news conference after vote on the vetoes failed. “We’re also looking at increasing class size—our student faculty ratio—we’re looking at increasing instructional workloads of some of our faculty, we’re looking we’re looking at administrative savings.”

He also said things like athletics and other programs could meet their end thanks to the cuts.

The university has already sent out furlough notices to thousands of employees, but the changes that’ll be considered today and over the next few weeks could mean as many as an estimated 2,000 employees could be out of work.

As of fall 2018, the University of Alaska system—spread across three main campuses in Fairbanks, Anchorage and Juneau, multiple community campuses and the statewide administration—employed 4,510 people on a permanent basis and an additional 3,920 people on a temporary basis. In the last four years, the university has already cut more than 1,200 employees due to budget cuts.

Cuts have been a reality for the University of Alaska for years now and the administration had implemented a program called Strategic Pathways in an effort to carefully shrink the university while bolstering its strengths, particularly when it came to programs important to the Arctic and the state’s economic and social well being. But with cuts of the magnitude handed down by Dunleavy, Johnsen said efforts that would have taken months or years will be made in a matter of weeks. The long-term impacts could be unknown.

The $136 million cut is expected to be closer to a total impact of about $200 million, according to an announcement by the university, because it will also impact enrollment, tuition, federal income and other revenue the university generates. There’s also the broader long-term reputational damage that’s been done to the University of Alaska with headlines like the Washington Post’s “Alaska university system braces for ‘devastating’ budget cuts” appearing in national outlets as the rest of the country gets word of what’s happening in the 49th state.

Last week, Johnsen said the university will attempt its best to shield students from dramatic changes this fall. He said changes to courses, program offerings and potential tuition increases will hopefully be put off until the spring semester.

It’s not the only nightmare situation facing students as many more got the notice that there’s currently no money available for university scholarships because Dunleavy broke precedent and included the Alaska Higher Education Investment Fund in an annual accounting maneuver.

The cuts also put the University of Alaska’s accreditation on shaky ground. The University of Alaska Anchorage’s teacher education program lost accreditation earlier this year.

Today’s meeting is scheduled between 1 p.m. and 3 p.m. in Fairbanks. It will be live streamed on the Board of Regents’ website.

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1 Comment on "Don’t call it bankruptcy but financial exigency is very bad news for UA"

  1. I wonder if they will cut any of the Administration staff, the part of their operating budget that accounts for 53% of their costs? Gotta keep “management,” so I guess professors and their classes will just have to go!!

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