From: Scarborough, Scott
Sent: Friday, March 06, 2009 10:43 AM
To: Baker, Shirley Ann; Carroll, Shanna L; Derhay, Tyna (Kristina); Early, Johnnie L; Gaboury, John; Gaspar, Tim ; Gold, Jeffrey; Gutteridge, Thomas; Hayes, Teresa Lynn; Kania, Janet; Komuniecki, Patricia R.; Lettman, Dennis S.; McClelland, Nina ; Monger, Barbara J.; Mowery, Patricia M.; Naganathan, Nagi - Dean, Univ of Toledo College of Engineering; Padilla, Patricia Ann; Ray, Douglas; Russell, Nikki; Schmoll, Beverly J; Schultz, Kathy; Soncrant, Cynthia K.; Switzer, Thomas; Taormina, Camila Y.; Traband, Margaret M.; Whitman, Sandra L.; Barlowe, Jamie; Bell, Karen A.; Blochowski, Toni M; Bonitati, Julianne; Burns, Lawrence; Calzonetti, Frank; Chastang, Mark; Curtis, Linda; Dabney, David; Edgecombe, Roberta; Gold, Jeffrey; Haggett, Rosemary ; Hymore, Diane; Jacobs, Lloyd; James, Patricia A.; King, Val; Lehnert, Charles; Logie, Bill (William) G.; Manton, Sandra Ann; McMillen, William; Moore, Pamela; Nabors, Sabrina; O'Brien, Michael E; Ovwigho, Godfrey; Papadimos, Peter J.; Patten Wallace, Kaye; Pawlowski, Shirley A.; Scarborough, Scott ; Schorling, Joan; Schramm, Maria; Simpson, Gail; Snyder, Vern; Staunton, Barbara; Way, Jacquelyn
Subject: Talking Points on 7% and 15% budget reductions
As we make our way through the budget development process, one question that we have been receiving from some college deans is, “If the Governor is recommending a biennial budget with an increase in State Share of Instruction, why does UT need to construct 7% and 15% cost reduction scenarios?” The short answer to this question is as follows:
1. Based on the Governor’s recommendation, UT would receive approximately $6.7 million in additional funds over two years. Projected salary and benefit increases alone over the two years will exceed $16 million (based on existing collective bargaining agreements). Given that the Governor is also recommending an undergraduate tuition freeze, we have very little choice but to consider other revenue enhancements and cost reduction scenarios. The 7% and 15% scenarios are intended to address both revenue enhancement (up to 50% of the scenarios) and cost reduction possibilities. We need to explore these possibilities.
2. There will be other cost pressures: student financial aid, debt service, utilities, structural deficits and carry-forward spending, the threat of a lower academic subsidy from the hospital, etc.
3. The legislature might choose to change the Governor’s recommended budget, so anything is still possible at this point in the legislative process.
4. The Governor’s recommended budget is based on the receipt of substantial federal stimulus funds, and most of the federal funds are frontloaded into the first year of the biennium. In a best-case scenario, federal funds will stimulate the economy and restore lost tax receipts. In a worst-case scenario, federal funds will simply buy the state some time to adjust its finances downward. In other words, we may be living on borrowed time.
5. UT’s academic (non-hospital) operating margin was already inadequate prior to the national recession. Some improvements were budgeted for 2008-09, and more improvements were already planned for 2009-10. The academic operating margin is too low to generate enough funds to pay debt service and reinvest in the physical plant and IT infrastructure in adequate amounts. As a short-term strategy, UT borrowed funds to address deferred maintenance. As debt capacity is maximized, however, the operating budget must be adjusted to fund adequate levels of capital reinvestment. If we allow the plant and IT infrastructure to deteriorate, nobody will want to join or attend the university.
6. We still need to make further investments in the university’s implementation of its strategic plan. To do so will make us a stronger university. Academic quality will improve. The university’s academic reputation will improve. The student experience will improve. Patient care will improve. The region’s economy will improve. Our finances will improve, which will enable us to adequately fund and sustain full-time employment at the university.
7. Cost reduction scenarios are ways to spur creative thinking. It is good for us to ask ourselves the question, “Can we become more cost effective and move existing funds to strategic priorities?”
These are the top seven reasons why we need to continue to develop the 7% and 15% cost reduction scenarios. I hope this is helpful.
Scott Scarborough
2 comments:
Scarborough's talking points are not convincing. .The administration needs to provide an honest account of just what they are doing with actual dollars, not snow us with unsubstantiated generalizations. I think that the key to present position cutting is provided in the babble about making a "stronger university " through finding more money to implement the "strategic plan." We all know that the plan excludes most of the programs in Arts and Sciences,. Departments in the Humanities and Social Sciences have already been hard hit by budget reallocations that transfer positions and other resources to the areas favored by Jacobs and company. We need to know how much money has been taken from those programs by way of non-replacement of crucial faculty lines and where that money has gone. We need to know how much more flesh and bone they plan to cut from the liberal arts to fatten STEMM. And we need an honest, objective assessment of the effect of all these "strategic " reallocations on students who, contrary to the favored myth, do care about quality and do want to be taught by tenure track or tenured faculty competent in their discipline. When will the Union and/or Senate force an honest assessment of the implications for students of the University's so called strategic planning? When will the Board figure out that "excellence " in academia cannot be achieved by just saying the word over and over again , like a mantra, while following policies that leave much of the faculty and staff angered and demoralized ?
I think the problems with the university are a symptom of a much larger problem with our nation that has been going on for quite some time. That is the sacrifice of what cannot be measured, that which is immaterial, for that which can be quantified, appraised, calculated with a computer and marked with a price. It is seen everywhere in the ever-desperate search for extravagant profits at the expense of people and ideas, values, traditions, and even the rule of law. The best way I can say this is the sacrifice of the ephemeral and the spiritual for the exclusive search for material well-being. That is why our nation, not just the university, is in such a predicament. However, our nation, our state, and our university continue to plunge headlong in the pursuit of purely materialistic and quantifiable goals at the expense of that which cannot be measured, and the result has been a disaster. The priorities are backwards. The "the human condition" has at least two sides, only one of which, and that the least important, can be measured with statistics, time studies, cost to benefit ratios, spreadsheets, computer forecasts, etc. The other, the more important, consisting of intangibles such as community, identity, purpose, the search for meaning, our context in history, our vision for ourselves as a nation, state, university as well as a thousand other unquantifiable ideas are the more important and are in fact the foundation that support the former and make its amelioration possible. The cart is before the horse and unless we turn it around, then I shudder to think of what kind of “human condition” we will all be in a decade from now, for I fear it will be neither materially nor humanistically the kind of condition I want to exist in. It looks like we will have to plunge into another Dark Ages before we can experience a Renaissance.
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