A Serious Threat to Higher Education in Alaska
After a series of line item vetoes, the University of Alaska is facing a 41% cut in state funding.
A story about massive cuts to higher education has been developing in Alaska. From earlier this month:
University leaders in Alaska are scrambling to prepare for a 41 percent cut in state funding and mobilizing a last-ditch lobbying effort to try to persuade legislators to overturn the governor’s decision.
“Simply put, if not overridden, today’s veto will strike an institutional and reputational blow from which we may likely never recover,” University of Alaska System President James R. Johnsen said in a statement following a Board of Regents emergency meeting after Gov. Mike Dunleavy (R) used a line-item veto Friday.
[…]
University officials had braced for stark reductions from the governor and were relieved when the state legislature proposed a $5 million cut. But after Dunleavy’s action, the university faced a $135 million cut in the fiscal year that began Monday.
WaPo: Alaska university system braces for ‘devastating’ budget cuts
The reason for the cuts?
In the 2018 governor’s race, Dunleavy campaigned on paying out a higher Permanent Fund Dividend, the annual checks sent to state residents based on growth, a fund created through the state’s oil wealth. The previous governor and legislature had dropped the dividend amount amid revenue shortfalls from low oil prices to help close massive budget gaps.
Dunleavy campaigned on a platform that the move amounted to theft from Alaskans of their “full PFD” and at points even proposed to pay back the diminished funds from the three previous years.
Disputes over whether Alaskans will get hefty dividend checks come October are a key obstacle in competing budget proposals. The Dunleavy administration insists that under a legal formula for calculating dividends, residents will get $3,000 checks this year. A proposal in June from the state Senate to drop that amount to $1,600 was dead on arrival.
WaPo: Alaska university system braces for ‘devastating’ budget cuts
The cuts in perspective:
A $135 million loss correlates to about 1,300 positions, [UA President] Johnsen said, but the “tidal wave-size” ripple effects from the loss of connected funding, such as federal research grants, likely will affect 2,000 positions.
Closing all 13 satellite campuses would save only $30 million. Closing one major campus would defeat the UA mission of making higher education available where most of the population lives, he said.
Anchorage Daily News: Alaska Legislature ends effort to overturn Dunleavy vetoes
The Board of Regents will meet this week to vote on whether to declare a financial emergency. Such a move would be necessary to fire tenured faculty.
Meanwhile,
The University of Alaska’s credit rating was downgraded sharply Wednesday in the face of drastic state funding cuts.
It was the latest sign of the impact Alaska’s roiling politics are having on the state’s universities, with funding so sharply reduced that school officials have sought to reassure students that classes will convene this fall, even as administrators consider measures as extreme as shuttering campuses.
The multi-notch drop in the credit rating, and a negative outlook, reflects “the severity and magnitude of the financial challenges” the public university system is facing, Moody’s Investors Service announced.
Moody’s downgraded some of the University of Alaska’s bonds from A1 to Baa1 and another type of bonds from A2 to Baa3.[…]
State-funded scholarships have also been cut, leaving many students unsure of whether they can pay for school, said Bernard Aoto, student government president at the University of Alaska at Fairbanks. He said some students told him they will have to drop their fall classes if financial aid is not restored.
WaPo: University of Alaska credit rating downgraded, reflecting financial turmoil
While I clearly lack specific knowledge of the University of Alaska’s programs and budget to know how these cuts will affect its curriculum and operations, I know more than enough about university budgets to know this will devastate the system. Indeed, it is a remarkably short-sighted policy choice by the governor for dubious short-term gain.
As is the case with a lot of organizations, the biggest single expense for a university is personnel. The bulk of the personnel, in terms of dollars, is the faculty. To cut this kind of money from the budget, large numbers of faculty will have to go. Lose faculty, lose programs. Curricula will have to be altered. Grants and contracts will be lost. The ripple effect will be huge.
And the faculty that people like to complain about (the humanities, for example) are often the cheapest faculty who teach large numbers of students.
This choice, assuming that it stands (and it appears that it will), will reshape the face of higher education in the state in a highly negative way. Further, it will lead to long-term economic problems with the state as it will quite likely lead to a significant number of young people leaving for educational opportunities (especially the academically gifted) and likely staying gone in large percentages.
This isn’t a budget cut. This is a budget stab to a vital organ.
When I first read about this a couple weeks back, I joked that I was unaware that there was a University of Alaska. But, yes, this is just a bizarre prioritization of resources. Alaska is rich. It can afford to fund a university. (I still contend that Alabama has too many universities for its size, population, and GSP and would be better off consolidating and better funding the remaining institutions. But that’s a different thing than gutting your flagship.)
@James Joyner: Clearly, the U of Alaska is not especially prominent (and I was already vaguely aware of some fiscal difficulties there before this). And yes, many states should likely engage in some consolidation (too much of higher ed across the country is designed around an assumption of continued growth rates in the population that are not coming to fruition).
But good grief, asking for this kind of cut in this period of time is plain insane.
@Steven L. Taylor:
But isn’t this just Consevative/Libertarian philosophy being enacted? There should be no public schools but rather if individuals want to spend their money on education then they are free to do so. After all, the for profit education systems are the most coveted degrees, right? And, of course, if they don’t have money well, F*ck em. It’s the natural order that the poor remain poor.
Bottom line, this is just Kansas all over again. This is the modern Republican Party.
If I supported gutting education in order to line my pockets, seeing people leave the state would just seem like a virtuous circle: more for me.
Another example of America, in this case a subset, living for today and stealing from the future. When the U of Alaska closes a campus and/or fires a thousand faculty and staff, it will be accused of forfeiting the future of Alaska.
I’d like to be smug and say that this isn’t happening here in Cow Hampshire, but this state’s support of post secondary education is abysmal and is reflected in the number of young adults who leave for educational opportunities and never return.
The largest component of the economy in Alaska is petroleum extraction. The military is probably next in importance followed by fisheries. The North Slope oil jobs often pay well and require no university degrees. This fact probably explains why the people there are happy to receive the checks now instead of investing in higher education. In time we’ll see how this works out. A few years ago when the price of crude dropped to $40, things looked like Alaska might take a big hit. However, once a well is producing it makes no economic sense to shut it off; it is new exploration that takes a hit. The price has rebounded. The more tension with Iran, the less Alaska needs a university.
@MarkedMan: Exactly!
@MarkedMan:
Well, except for the fact that the education budget is being slashed in order to (re-)increase welfare distributions.
Yes, Alaska, welfare. That’s what you call it when the state collects money and distributes it to people who didn’t earn it. “Permanent Fund Dividend” is just as much a euphemism as “Earned Income Tax Credit”.
Hypothesis: uneducated voters are Republican voters.
If we fire all of the climate researchers working in the Arctic, then we won’t have any Arctic climate research that needs “debunking.”
@DrDaveT: Alaska is operating the American precursor to the universal basic income model.
@DrDaveT: A sane person could argue that this is not welfare in this case. After all, the state is not owned by the oil companies. In some sense, it is owned by all the residents and charging an extraction fee and distributing it to the residents is similar to a trust paying dividends. But, of course the next step is to decry the “theft” of the money from the shareholders. Point out that the poor use this bounty to buy liquor and steaks and drugs, and this tax is driving away the oil companies, who are taking the jobs with them. Why should oil workers lose their jobs just to fund “those” people who are too lazy to work?
This is why people like the Kochs and the Mercer’s fund Libertarian think tanks, Reason magazine, and the various “Conservative” get togethers on their ranches. You can get a Libertarian to pull down any structure.
I can’t see what this governor is thinking, long term. Once you tear down a university and all of its professors go elsewhere, it’s not like it can be easily recreated. A huge amount of institutional knowledge disappears that will need to be replaced.
What will also happen is the percentage of the population that wants higher education will go elsewhere….and will be less likely to return. Have fun with your brain drain, Alaska!
@grumpy realist: The best and the brightest mostly do go away–and stay away after graduation.
@grumpy realist:
He’s not thinking long term, he doesn’t care about the long term. He’s thinking about the next election. Once he’s he’s got his, fuck them.
@MarkedMan:
I tend to agree, actually.
@DrDaveT:
This is entirely consistent with conservatism. The population of Alaska is largely white with some native Americans and Asians. Very few blacks and almost no hispanics. Therefore it’s not welfare.
Them kids don’t need no fetchin’ up anyway.
I see this as kind of precursor to what’s going to come. The higher education bubble is going to pop one day. And when it does, it will be ugly. And I guarantee that the first step will not be firing the high-salary admins the universities have been larding themselves up with over the past few decades. It will be the faculty.
(In fact, we’re already moving in that direction as non-tenure faculty hires are starting to outstrip tenured faculty hires.)
How did the Republican Party get to this point? Mindlessly tearing down everything, repealing pollution control laws, refighting the Civil War, actually hostile to looking at reality in any way shape or form. Those younger than me must find it almost unbelievable that the Republican Party used to represent something other than reflexive assholery.
@Steven L. Taylor:
“Charging a ___ fee and distributing it to the residents” is known everywhere else as “taxation and redistribution”. That’s all it is; the state charges a tax, and uses the proceeds to do stuff, including give handouts. Calling it a ‘dividend’ is good PR, but doesn’t change the basic reality.
I can assure you that nobody would be fooled if the federal government attempted to do the same thing, no matter what they called it.
@DrDaveT: As a general principle I do not object to the notion that the state, rather than simply selling the mineral rights, pays dividends (or whatever you might call it) to the citizens as “owners” of the state.
I am not sure what I said that is relevant to that.
@Hal_10000:
The degree to which there is a higher ed bubble is linked to student loans. As such, I am not sure the concept is relevant here.
@Steven L. Taylor:
What I thought you said was that you agree that:
If I misunderstood what you were saying, then never mind. My primary annoyance here is that taxation and redistribution is called ‘welfare’ when it benefits Them, and “profit sharing” or ‘dividends’ when it benefits Us.
@Steven L. Taylor:
I think perhaps that has cause and effect reversed. The bubble is driven by the (irrational) requirement for a bachelor’s degree for all kinds of jobs for which such a degree is completely irrelevant. Making the diploma a required signal of quality for even mediocre jobs leads to an inflated demand for the diploma. The willingness of people to take on crazy debt to get the diploma follows from that.
@Hal_10000:
Here in Virginia, a couple weeks ago, it was reported that the President of Virginia Commonwealth University (VCU), Michael Rao, is making $1,020,828 a year.
That same day, VCU announced it was laying off 20% of the staff from its Institute for Contemporary Art. And VCU, for years, has had open protests from its adjunct facility for the pennies on the dollar they make.
@James Joyner: “But, yes, this is just a bizarre prioritization of resources.”
Isn’t it just the prime example of Republican values? “I get a tiny payout that will be gone in months, and in return I destroy a system built over decades to help the entire population — and once it’s gone, rich people will never be taxed to pay for it again.”
@DrDaveT:
While there’s some of that, I do think redistributing usage fees paid by companies for access to resources is different than redistributing income taxes extracted from citizens.
@MarkedMan: @wr: My disdain for what the Republican Party has become is rather high. And, yes, there’s a natural consequence of massive tax cuts of having insufficient resources to pay for services. But I have not noted a general trend in Republican-governed states cutting funding for state universities to a greater degree than Democrat-governed states.
As a now-retired adjunct, I can agree with many criticisms of the administrative bloat that afflicts many public institutions of higher education. However, this meat-ax approach to cost-cutting brings to mind Pink Floyd: “We don’t need no education, we don’t need no thought control . . .”
@DrDaveT: Well, I don’t think it is welfare, per se, (at least not in the way the word is usually used) but that is a different discussion. It certainly is communal or social ownership.
@DrDaveT:
But the need for the debt load is driven by decreased state funding for education over the last 30 years.
But sure: not everyone who earns a degree necessarily needs it for their eventual jobs. I think that the signalling device in question is useful, but I am biased towards university level education for obvious reasons.
@James Joyner:
This is an interesting empirical question, for which I do not know the answer.
I will say that there has been a trend by GOP state level lawmakers in the last decade of so to be especially critical of higher education.
@James Joyner: But but but James, corporations are people. Or so I’ve been told.
@Steven L. Taylor:
Commies in America! 😉
@Steven L. Taylor:
I think we are giving out way more degrees than are necessary. A college degree is now a requirement for many jobs that frankly don’t need them. Grad school, in particular, is a bubble as we are giving out several times more PhD than there are jobs for (and universities are raking in cash on that0. Most countries don’t send as many people to college as we do. Eventually, we’re going to realize this makes no sense.
And fixing the student loan system is going to mean sending a lot fewer people to grad school. That’s when the bubble start popping.
(The for-profit bubble will pop first, but that’s kind of deserved.)
@Steven L. Taylor:
Steven, is this really the case? Is the cost of education, adjusted for inflation, still equal to tution plus state funding compared to thirty years ago? I do realize that the question is rather broad.
@Steven L. Taylor: “But sure: not everyone who earns a degree necessarily needs it for their eventual jobs.”
Maybe I’m dreaming here, but I could have sworn there was a time in human history — maybe even in the USA — when it was thought that there might be more to a person’s life than their “eventual jobs.” That maybe educating people so that they would be better citizens leading happier and more productive lives was an end in itself.
Now we seem to have decided as a society — and don’t get me wrong, I don’t see this coming from you, but from many others here — that the only purpose of education is to train us to perform a particular task, and that the only proper education is that which does precisely that, preferably in STEM. And that a liberal arts education is a waste of time and should be replaced for most people by a trade school which will give them nothing but the essential tools they need to repair cars or fix plumbing.
And of course, education in the broader sense is to be reserved for those who can afford a life of leisure. For anyone who isn’t rich, the idea that maybe a life containing knowledge and the ability to think is a ridiculous luxury, and we should simply do away with it now.
@Kit:
I can at least answer this: tuition has grown faster than that rate of inflation over the last roughly 30 years. I can also say that at least part of that increase is tuition having to cover more of the cost as state funding has decreased.
@William Rabkin: I was responding to the comment, which was job-specific.
I agree with the basic thrust of your comment, although I am also mindful that as much as I think, say, a liberal arts education is a good in and of itself, that almost everyone who goes to college sees it as a means to a broader end, which includes more gainful employment.
But to fully elaborate on this would take more time that I have at the moment.
Let’s just say that the drive to require the signaling device of a degree for much employment has the added benefit of getting a significant percentage of the population to have a broader education and not just job training.
@James Joyner:
I don’t think I specified personal income taxes. Usage fees to the government are a pretty straightforward corporate tax. (We can save the argument over which is more efficient for another day.) Using those fees to provide a handout to the general public, rather than (say) to offset externalities of resource extraction or escrow funds for the day when the resource runs out, is pure pandering.
@William Rabkin:
Absolutely. And so we have universal public education, providing a liberal arts and sciences education to all. A high school diploma in the US probably puts you in the 99th percentile of educational attainment, viewed historically across the world.
A university liberal arts education beyond that level is pure luxury, and always has been. It’s a sign of an affluent society that so many people have the leisure and resources to consume that luxury. It’s a good thing, not a bad thing — but making the society sufficiently wealthy and productive to create that leisured class comes first. Requiring a bachelor’s degree for people who sell used cars or print posters does not help.
@DrDaveT:
I’m late getting back and some one may already have said it, but I don’t know about your assertion. How many people see… say Social Security… as a redistribution plan?
@Steven L. Taylor:
That depends entirely on how many people get neither benefit because they were priced out of the employment pool by the signaling device requirement. It would be nice if every high school teacher were functional in three languages, but refusing to hire teachers who aren’t would not be a change for the better overall.
@Just nutha ignint cracker:
I think that if Social Security paid out equally to everyone, regardless of their work history (like the Alaska dividend), even those people who haven’t yet caught on would recognize it.
@DrDaveT:
While I am sure examples like this can be generated, I highly doubt that most used car salesman jobs, let alone poster printers, require a BA.
@James Joyner:
This is an interesting question. But I assume you wouldn’t disagree that Republican states invest substantially less in all forms of education, preschool and K-12 included? But it would be interesting to see if this tendency is different at the university level. If it is, I suspect it is because the almost insane level of identification Trump state residents tend to have with their public university sports teams, resulting in some protection to the university as a whole.
@William Rabkin:
I think you have hit on the essence of Conservatjve–and as a consequence Libertarian–thinking here. The time of expansion of educational opportunities was a time of belief in the virtues of social and economic mobility also. We’ve largely abandoned our belief in both–to a large degree that they are even possible let alone desirable.
Indeed, we’ve largely abandoned our belief that most Americans should be able to make ends see each other across the room and wave, let alone make ends meet. Then again, those people should have planned better, n’est pas?
@Just nutha ignint cracker: Social security is different, Everybody pays into it and everybody gets something out of it according to how much they paid in.
@DrDaveT: Well, that’s certainly true (which, of course is why Roosevelt’s people designed it that way), but the fact that the redistribution is imperfect does not make the program less redistributive.
(And of course, the fact that the retirement age was set at 65 while life expectancy among the black population was 62 was mere happenstance also, I’m sure.)
@Steven L. Taylor:
Probably true, though note that many job postings for such positions include a preference or bonus points for a 4-year degree, which has the same effect.
A quick browse at Monster.com for entry-level jobs with bachelor’s degree required turns up such professions as doing kids’ event logistics for a nonprofit, file clerk for a patent law firm, dispatcher for a drayage company, Maserati mechanic, etc. If you’d like to be a Correctional Officer, a bachelor’s degree (in any field!) counts as 1 year of experience, which is a primary criterion. And so on.
@Just nutha ignint cracker:
We agree on this, I think. Both the Alaska dividend and Social Security retirement benefits are transfer payments — they collect taxes and then pay the money back out to individuals. “Transfer payments” was the preferred term for “welfare programs” in my college economics texts.
@DrDaveT: By the time I was taking economics, in my mid-40s, the authors of texts had come to an acceptance that transfer (in the government sense)= welfare. Some texts even used the terms interchangeably–but I didn’t think that was a good idea because it’s sometimes confusing.
@DrDaveT:While I’m still hanging around this thread, I will note that you are spot on on this point. A few months ago, I was reading an article about the difficulty corporations are having hiring administrative assistants/executive secretaries. The problem? Most employers are requiring bachelor’s degrees whereas something on the order of 90+% of all current job holders in the field don’t have them. (And alas, the degree holders tend not to have secretarial skills either, strangely enough. 🙂 )
How very Palinesque.
The Kansas Fiscal Solution, or maybe its the Mississippi Solution, comes to Alaska. This is what happens when a party dedicated to no government-funded programs other than law enforcement runs a state.
@DrDaveT: Keep in mind it’s the Feds that gave Alaska it’s sweetheart deal on revenue from royalties off of federal lands.
The largely decentralized revenue sharing system for onshore federal energy and mineral resources under the Mineral Leasing Act of 1920 provides states generally with a 50% share of revenues collected (rents, bonuses, and royalties), less 2% for administrative costs; Alaska, however, receives 90% of all revenues collected on federal onshore leases (less administrative costs).
@Davebo:
Even better — that makes it effectively a transfer from the rest of the country to Alaska, rather than merely a tax on Alaska businesses…