Facing $130 million budget cut by Dunleavy, University of Alaska braces for big budget decisions ahead

University of Alaska officials are preparing to eliminate academic programs and lay off employees after an effort by legislators to reverse deep budget cuts failed.

The UA Board of Regents will decide Monday whether to take the uncommon, perhaps unprecedented, step of declaring “financial exigency,” allowing it to more quickly discontinue programs and academic units, and remove tenured faculty. Concerned UA students and employees say they’re bracing for the worst as they await news on what and who will be cut — and whether a deal can be reached to restore any of the funding the governor erased.

“It’s the feeling of despair, quite honestly,” said Matthew Pacillo, a 22-year-old student in Anchorage who’s concerned his degree program could be eliminated. “It feels like the rug just got ripped right out from underneath you.”

The regents’ Monday vote is the latest, and one of the most significant, decisions facing UA officials since Gov. Mike Dunleavy announced last month that he was erasing an unprecedented $130 million in funding for UA, where he got his master’s degree, on top of the $5 million cut approved by the Legislature. That’s about a 41% cut to state funding for the university system, and around 17% of its overall budget.

“This declaration reflects a sharp turning point,” UA President Jim Johnsen said in a statement. “Financial exigency is an action I never anticipated that this great university or its regents would need to take. But every day we delay increases the size of the cuts required.”

Johnsen has described the cut as “devastating” and “draconian,” and said it could result in the closing of campuses, slashing of degree programs and the elimination of at least 1,000 university jobs. A gradual reduction in state support over several years is rational, but a $130 million cut three days before the start of the fiscal year is not, he has said.

[Big spending cuts and deadlines loom as the standoff continues among Alaska legislators and governor]

In total, Dunleavy vetoed $444 million from the state operating budget last month, cutting spending to move closer to a balanced budget while avoiding new taxes or reducing Permanent Fund dividend checks. Dunleavy’s cuts are in addition to the more than $100 million in reductions made by the state Legislature.

At his news conference June 28 announcing the vetoes, Dunleavy said there’d be more cuts next year.

‘Suffering whiplash’

Since then, UA officials and a wave of others have tried to persuade the Alaska Legislature to throw out Dunleavy’s vetoes by the deadline Friday night. But by then, the state’s deeply divided legislators had yet to all agree on a place to meet.

“I still kind of feel like I’m suffering whiplash through all of this,” said Rachael Ball, an associate professor of history at the University of Alaska Anchorage. “I sort of cycle through despair, rage and numbness every 30 seconds or so.”

Ball isn’t alone, said Maria Williams, a professor of Alaska Native studies at UAA who chairs UA’s Faculty Alliance. Williams said she has heard from anxious faculty, some of whom have started looking for other jobs. She’s also heard from worried students, and some have started applying to other schools, she said.

“The suite of options for faculty and students is looking very oppressive right now,” Williams said. “Everyone is scared and frightened and so, me personally, I of course am worried I am going to be out of a job.”

The Faculty Alliance has passed a resolution asking regents to delay a declaration of financial exigency.

[Alaska college students lose state scholarships amid uncertainty following obscure budget vote]

Monday is too soon and the possible impacts are too grave, Williams said. She said she fears the declaration will harm UA’s reputation and affect UA’s accreditations, which Alaska’s accrediting agency has already warned legislators about.

Johnsen said UA is going to do everything it can to keep accreditation.

UA includes three separately accredited universities: the University of Alaska Anchorage, the University of Alaska Fairbanks and the University of Alaska Southeast in Juneau, plus 13 community campuses.

As far as cuts, Johnsen said, everything is on the table. For scale, the entire UAA campus receives $120 million in state funding — $15 million less than the total cut, according to UA.

For the fall semester, the plan is to not interrupt degree programs, Johnsen said. Most reductions will first occur at the administrative level, and then any academic changes will go into effect in the spring, he said.

On Monday, the regents will also discuss options to restructure UA, including moving from three separately accredited universities to a single accreditation, and possibly eliminating universities and community campuses, according to a UA statement. Decisions are expected July 30.

[Full coverage of Gov. Mike Dunleavy’s budget vetoes and the Alaska Legislature’s special session]

Already, UA has implemented freezes on traveling, hiring and new contracts to curb some costs. About 2,500 UA employees also recently found out they’ll have to take 10 days unpaid leave during the current fiscal year.

It’s possible the state Legislature could decide to put funding for UA into another bill, but that money would still have to survive Dunleavy’s veto pen. It’s unclear where the governor stands on that possibility, or the path forward. The governor’s office has refused to make Dunleavy available for an interview over the past week.

“The governor seems to be pretty determined,” Johnsen said. “We have a lot of support in the Legislature, but clearly fell substantially short in terms of the override.”

Among the biggest yearly cuts

The 41% reduction in state support for UA is one of the biggest cuts to funding for public higher education by a state in one year, according to data that dates back to 1980 from the State Higher Education Executive Officers Association.

Only New Hampshire comes close, in fiscal year 2012, said Rob Anderson, president of the association. Two years after New Hampshire pulled back state support for higher education by about 39%, it restored a majority of the funding, he said.

But New Hampshire also is very different from Alaska, he said, and relies more heavily on tuition, so the cut had a much smaller impact there.

“What makes this cut particularly harmful is that state appropriations currently cover such a large proportion of costs which is necessary in a state such as Alaska which is twice the size of Texas with fewer than one million residents,” Anderson said in an email. “A state of this size can’t garner scales of efficiency in the same manner other states can.”

A document from the governor’s office explaining the budget veto says UA is too dependent on state funding and it has too many high-paid executives, too many duplicative programs and outcomes that are too poor.

But Johnsen says the governor’s office is lacking important context for its statements.

UA is an open-enrollment university system and its students are often part-time and have at least one job, according to a document from UA. Also, it said, 75% of UA executives are paid “well below the average pay of their peers.” UA has been completing work on streamlining and it has raised tuition by 5% for the upcoming academic year.

State funding is also used for research at UA, Johnsen said. Critics of Dunleavy’s budget veto say his cut could seriously impact climate change research.

“The Arctic has a big role in affecting the global dynamic and we are the Arctic experts,” said Larry Hinzman, vice chancellor for research at the University of Alaska Fairbanks.

State funding is used to write the proposals and collect preliminary data to apply for grants. On average, for every $1 in state money spent, the return is $7 in federal or foundation funds, he said.

As a result of the state budget cuts, some funding agencies have reached out to UA employees with concerns about whether they can complete the research they’ve received grant money for, Hinzman said. He said UA is trying to assure agencies they can.

‘A mess right now’

For the first time in more than 20 years, Steve Johnson, director of UAA’s elite debate program, has applied for a job outside of Alaska that he hopes to get, he said.

Since his program doesn’t result in a degree, he’s expecting it will get chopped.

“I’ve been here 24 years running this debate program. And you ask yourself, ‘What’d you do wrong?’" he said. “Hours upon hours upon hours, between myself and my students, giving to and working for and contributing to and lifting up our community, and why didn’t that mean something?”

If UAA’s debate program gets cut, away goes debate camp for middle and high school students, Anchorage’s debate series and many other programs, he said.

Sure, UA could be more efficient and reductions could be made, Johnson said.

“But that’s a conversation that must involve the community and those who are entrusted to lead higher education,” he wrote in a public Facebook post. “A manufactured crisis such as the Governor’s cut will prevent that transformation by lopping off the good with the expendable, condemning UA to a spiral of decline as programs get cut, students leave, enrollments decline and faculty flee.”

Johnsen, the UA president, has estimated the $135 million budget cut this year will be more like $200 million when costs, including lost tuition and grants, are factored in. There are “very real additional ripples, or tsunamis perhaps, as a result of the state’s actions,” Johnsen has said.

Pacillo, a UAA student who graduated from Anchorage’s Dimond High School, said he’s not only worried about what his university looks like as a result of the budget cut, but he’s also not even certain how he’ll pay for school.

Pacillo was one of thousands of students who got an email last week that they will no longer receive their scholarships or state-backed tuition because of a failed budget vote in the Alaska Legislature and a decision by Dunleavy.

Pacillo’s needs-based grant covers $3,000 of his annual tuition costs, roughly 30%, he said.

“I don’t really know how I’m going to fund the rest of the year. I’m really scared,” Pacillo said. It’s far too expensive to leave Alaska and go to an out-of-state school, he said.

“I don’t know what I’m supposed to do.”

Ball said she’s concerned for her students and about what the possible shuttering of community campuses could mean for access to higher education in rural Alaska.

“I feel like this is so irresponsible,” she said. “Young people are going to leave the state and they’re not going to come back.”

Ball said also she’s worried she won’t have a job soon, or her job will look very different from what it is now. As tenured faculty, she said, she expected some element of job stability, but that feeling of security has been ripped away. She and her husband are considering putting their house on the market, she said, in light of economists’ warning that Dunleavy’s vetoes will pull Alaska back into a recession.

She has written, emailed and called her state representative several times, pleading with him to override the vetoes, but never heard back, she said.

By Friday, she said, she wasn’t sure what else to do. It’s all taking an emotional toll.

“I have basically woken up at 4 a.m. and been crying by 4:15 most mornings this week,” she said. “It’s a mess right now.”