Dispatches From the Ivory Trailer

You might not have noticed it in the midst of all the heat, vacation plans and Fourth of July festivities, but it’s a new year for many universities and other agencies — fiscally speaking, that is. On the other hand, maybe you have taken note of it; perhaps some dear readers even went to a Fiscal New Year party, a growing trend among aging hipsters.

 

 

If you did go to one of these parties, you might have even participated in some emergent new tradition, like the dropping of an audit report from a balcony at midnight to mark the arrival of July 1. Or like the making of fiscal new year resolutions (such as “I will not wait to turn in budget reports until the last minute ever again” or “I promise to try really hard to smile to the Assistant Interim Associate Vice President for Finance at least once every day”).

A new year, fiscal or otherwise, always brings with it excitement, possibility and a little bit of trepidation. Within higher education, many institutions are continuing to struggle with budgets influenced by a recession that may be over, ending, continuing or entering a new phase — depending on whom you ask. So in the spirit of the young fiscal new year, here’s a midsummer roundup of notes on finance from around academe.

• In California, state university officials are complaining that of the $690 million in federal stimulus funding for new projects they’ve received over the past year and a half is actually costing them money that they don’t have. According to the Wall Street Journal, by accepting these federal research funds the university system in California accrued an additional $69 million in related costs last fiscal year that were not reimbursed — further contributing to the state system’s billion-dollar budget deficit.

• In a New York Times piece from last week, a report was cited which claimed that as the proportion of traditional academic and instructional spending has declined at universities in recent years, it has risen for non-academic budget lines such as administration, recreation, student centers and other campus services. Respected Ohio University (distinguished) professor Richard K. Vedder was quoted in the article as observing, “This is the country-clubization of the American university.”

• Speaking of country clubs: The Daily Illini reported that the new University of Illinois president will receive paid memberships for two separate country clubs to go along with his $620,000 annual salary (a $170,000 raise over his predecessor’s pay), $45,000 bonus, two homes (a house in “Chambana” and a condo in Chicago), a car with personal driver for university travel, a collection of tickets for athletic and cultural events and other perks.

Meanwhile, the state of Illinois had stopped paying many of its bills and was more than $5 billion in the hole as of early July. Among the many state offices and services not receiving their current budget allocations are the state’s universities. According to the state’s official website, the 2011 budget includes $1.4 billion in additional cuts; Chicago Public Radio reports the new budget also features $100 million in reductions for the state’s public universities.

• Just in case one might think it’s only the universities that are struggling with their budgets, there’s plenty of evidence that years of ever-increasing tuition and fees are taking their toll on students too. The Chronicle of Higher Education led its web page this week with an article on the “shocking” rates of default for those with government-backed student loans, which according to data the Chronicle obtained, might be as high as 40 percent for some categories of borrowers.

So is there an overriding theme that’s out there in the serious media coverage of higher education finance? It’s hard to say, but if I were to try to identify just one, it would be the increasing number of questions about the sustainability of current practices. It would seem that there is growing consensus that “business as usual” isn’t working all that well, and that we are in dire need of an open conversation about what needs to change to make higher education work better and more efficiently.

But don’t be dismayed — there’s some good news about finances starting to emerge here and there too. Universities and their budgets will bounce back; it just might take a little time and a few new resolutions. Kind of like when the traditional New Year on Jan. 1 arrives and there are folks moving around slowly, taking a couple of aspirin, sleeping in and otherwise trying to cope with the night before when they overdid it a bit. Sometimes it just takes a few days to get back to full strength after the big party is over — or in the case of fiscal matters, maybe a few years.

“Dispatches from the Ivory Trailer” is a regular column on issues in higher education and college town life. Matt Zuefle can be contacted at dmz@ivorytrailer.com