University of Alaska regents terminate declaration of financial exigency, brace for uncertain future

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

The University of Alaska’s Board of Regents voted unanimously today to terminate its declaration of financial exigency after Gov. Michael J. Dunleavy reversed course on a $135 million cut to the system and signed a budget amounting to a $25 million cut.

The Board of Regents issued the declaration of financial exigency on July 22 after the governor hit the system with a veto that, when combined with cuts passed by the Alaska Legislature, amounted to a one-year hit of $135 million or 41 percent of the system’s state funding.

The devastating cut sent the University of Alaska into emergency mode to figure out how it would keep its doors open through the year. The declaration would have allowed the university to make massive changes essentially overnight, including eliminating tenured faculty, ending academic programs and shuttering campuses.

Amidst the discussion, the Board of Regents approved a preliminary plan to begin the process of consolidating the University of Alaska Fairbanks, University of Alaska Anchorage and the University of Alaska Southeast under a single accreditation that would lead to the elimination of duplicated programs.

That plan is still underway because to escape a $135 million one-year cut, Board of Regents Chair John Davies signed an agreement with Dunleavy to cut $70 million over three years ($25 million of which is arriving this year).

University of Alaska President Jim Johnsen said no major cuts were made during the last month, and said that hiring and travel freezes have been “thawed.” He said, though, that under the hiring freeze, most adjunct faculty were not brought back for the fall semester.

Looking ahead

Regent Dale Anderson said that the promise of additional cut will still be a great source of uncertainty for the University of Alaska’s future. He said significant cuts will still need to be made to meet the $70 million cut contained in the compact and that financial exigency in the future may be the university’s best path forward.

“We’ve been given the luxury of a three-year glide path. Remember it’s a $70 million reduction. I don’t want us to be lulled into an assumption that all is well because this cut is only $25 million—only $25 million. The ultimate goal is $70 million, and the state of exigency may raise its ugly head in year two or year three of our compact,” he said. “I don’t think we can assume that a declaration of financial exigency is totally off the table in the future if it means using the declaration to save our institution.”

Anderson said that the university will still need to consider a major overhaul of how it does business in order to survive.

Regent Karen Perdue agreed with the general sentiment that things need to change but added that without the broad powers of financial exigency the University of Alaska will now need to be more thoughtful about how cuts are made.

“None of us know at this point what $70 million in reductions looks like,” she said. “The lifting of exigency requires us to be even more rigorous in our approach to looking at a new university. … We will treat our employees fairly and we will honor our contracts.”

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