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Archive for Thursday, January 15, 2009

Regents grapple with proposed cuts

KU says, ‘There will probably be some layoffs’

January 15, 2009

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The Kansas Board of Regents absorbed more glum economic news Wednesday, hearing a specific outline of budget cuts they had been warned about for months.

It was the beginning of a process as regents and other state higher education officials began to digest the cuts outlined in a 365-page report from the governor.

In a presentation to the board, Diane Duffy, regents vice president for finance and administration, said that for the most part, the cuts represented what the board had been anticipating.

Kansas University Provost Richard Lariviere said, too, that the cuts were in line with what the university expected to hear from the state.

“This is about as good as we could get under the circumstances,” Lariviere said.

He reiterated that KU would not be able to absorb the 7 percent reduction in general funding without a significant reduction in its work force.

KU hoped to freeze open positions as much as possible, but Lariviere said that would probably not be adequate to meet the cuts.

“There will probably be some layoffs,” he said. “We hope to keep those to as small a number as possible.”

Cuts outlined Wednesday included a 3 percent reduction in funds available for this fiscal year, and an additional 6.5 percent during the next fiscal year. The recommendations for the next fiscal year represented a 4 percent expenditure reduction for institutions and an additional 2.5 percent reduction from financing reductions and shifts in the state’s general fund. Some of those proposals included:

• The elimination of $15 million from the state’s general fund, but the addition of $13.7 million in one-time balances from the state’s Educational Buildings Fund for the state’s 2007 five-year deferred maintenance program.

• A $9 million reduction attributed to debt restructuring.

• A reduction of $15.9 million because of a moratorium on employer contributions for employee benefits.

Regents offered little public comment on the proposals during the meeting. Regent Jill Docking said she and other board members would need more specific information and clarifications from the state on some items.

Duffy said regents staff would be consulting with the state to get more specific information on items such as whether the reduction for employer contributions was a one-time or permanent reduction.

Under the proposals outlined Wednesday, KU would absorb the loss of its remaining $30 million designated for its pharmacy school expansion. Though bonding authority would be granted to the university to finish the project, no funding source was identified to fund the bonds.

Lariviere said that while he did not know what that meant for the outcome of the project, he hoped the measure was an indication that the state would issue a bond to complete the expansion.

All the recommendations will have to go through the Legislature, and will be subject to another budget assessment to be done in April, after income tax returns can be factored in.

Comments

4chewnut 6 years ago

Could the reporter explain what is meant by: "A reduction of $15.9 million because of a moratorium on employer contributions for employee benefits."

tir 6 years ago

4chewnut, I think that means they're not putting the state's contribution into KPERS, the retirement system for state workers. The thing is, KPERS' investments are tanking now, too, so it's a double whammy for the retirement system that the state is holding back their share of the contributions.

Sigmund 6 years ago

Come on people, the private sector does this all the time. Get a grip and reduce your damn expenses. Layoff people if you have to but why not just take across the board pay freezes (from top to bottom), reduce waste, quit building new buildings and maintain what you already have. Have none of these people ever worked in an environment where just demanding more taxes isn't the answer? Time to be adults, grow up and live in the real world now.

Shardwurm 6 years ago

No kidding Sigmund.The taxpayers and students are paying premium prices to have grad students teach classes. Not unlike other businesses higher education has glutted itself on the backs of the middle class and times have changed.Good luck finding a real job Professor.

Sigmund 6 years ago

Shardwurm (Anonymous) says… "Not unlike other businesses higher education has glutted itself on the backs of the middle class and times have changed."It has financed the glut and those high prices through government subsidized student loans and just like home prices that skyrocketed via Fannie and Freddie, Sallie has done the same for Colleges. We have all seen how well that worked out and the middle class will be bailing out Sallie very soon now.

lawrencechick 6 years ago

Could we sell some of the tacky Barker loungers at the football stadium? They have to be worth someone's yearly salary.

avoice 6 years ago

If the State can put a moratorium on their contribution to our retirement, can we put a moratorium on our own contribution? That mandatory retirement fund whittling away the paycheck is about as welcome as a hole in the head right now. I may not live to see age 65, but I'm sure going to live to see tomorrow, when I might need those extra bucks to keep a roof over our heads and food in the pantry.

yourworstnightmare 6 years ago

Kansas supports too many universities. Millions of dollars could be saved by closing Pittsburg State and Fort Hays State. The remaining four universities (KU, KSU, WSU and ESU) could easily accommodate the students.A business model of operation would be based on supply and demand. If a product is getting more expensive to produce and demand for the product remains high, it stands to reason that the business should charge more for its product. KU and all regents' institutions need to raise tuition as the free market demands.

mom_of_three 6 years ago

can you imagine what it would do to Hays, Kansas, if you close the University? It's one of the largest employers in the city, and probably the largest school on the western half of the state. Can we just find people for government that can make a budget and stick to it? And if no one working for the Universities get raises, neither should any state government official.

beawolf 6 years ago

Most higher ed institutions have been biting the bullet for the last 5-10 years as state funding nationwide continues to shrink. Yet, students want a highly qualified education that is respected in the marketplace, but do not want their institutions to invest in the resources needed to provide that education. Will it cost more to attend? Of course, but the value of that education will be superior than those who cut, cut, cut and wind up with little more than the equivalent of an associates degree.Higher ed is the cornerstone of our society. If you want to see our country fall into a greater abyss than it is now, support funding reductions. 20 years ago, a higher education panel recommended that 70% of all college students need to advance to a masters if not a PhD level, if we want to compete with foreign educational standards. Were at 10% and wondering why all the "good" jobs are going oversees; why our teaching pool is so diluted; why our financial markets are in jeopardy; why new technologies are coming from other countries; why our medical professions are filled with foreigners;

Luxor 6 years ago

There are deadwood people in every single department at KU that that could be laid off, but it won't be those people who do wind up getting laid off.

lily 6 years ago

The right people won't be laid off. KU is so top heavy it's not even funny. Are you going to see someone in administration shoveling snow or processing student paperwork? If you do, please take pictures. I know we need some administrators but I'd like to see what most of us consider "fluff" jobs done away with.

penguin 6 years ago

Closing FHSU would only send the message that fiscal responsibility is punishable by closure. The model at FHSU for years has been to deal with cuts by expanding the Virtual College. In addition, they are the least expensive of the Regents schools to attend. So closing FHSU would just mean that the parents/ students at FHSU would just have to seek out a higher education from an institution that will charge them more, provide them with higher class sizes, and also kill the Kansas Academy of Math and Science that is to be based at FHSU,Any call for the closure of FHSU shows a real lack of knowledge on what they are trying to do to weather the storm aheard. In fact, they are in a decent position in regards to higher ed cuts. They have already cancelled on-campus summer classes and are attempting to maximize the Virtual College in the Summer. In addition, they have begun the process of cutting down working days/hours during the summer. Long before the word came down on the amount of the cuts ahead, Dr. Hammond has decided to have a game plan for the future.The community of Hays and Ellis County would also be substantially impacted by the closure of FHSU. This in combination with the fact that this is the only 4 year university in Western Kansas would just be ridiculous. FHSU has proven over the years that they can handle the cuts and will work with what money they are provided. They also have done this without massive tuition increases. In fact, FHSU tuition is not much above the tuition I was paying at KU in 2000….yes the year 2000.Do a search on FHSU and this financial crisis and you will see that Dr. Hammond has proposed real action to handle the situation. The same clearly cannot be said for KU and KSU.The leadership on those campuses, Dr. Hemenway and Dr, Wefald, have just taken this time to head for the door during these difficult times. (Granted Wefald was on his way out before this hit, but still the news on their dealing with the situation seems to be pretty quiet)

CNA_Resident 6 years ago

Not only that, lily, but also the rather simple idea of cutting back on all KU salaries topping $75k or more by - let's say 3%; and 2% on KU salaries between $25k and $74.9 would save ~everyone's job~ .... which in turn would allow families to keep their homes and put food on the table!Instead, KU will doggedly and stupidly lay off those who can least afford it (facilities operations, GTA's, and student hourlies not on federal funding), cutting from the bottom up, rather than reducing and re-allocating salaries from the top down, for the duration of the financial crisis. Absolute Idiots.

make_a_difference 6 years ago

I have a child who is a senior in high school this year, 31 ACT score, straight A student, involved in school activities & outside volunteering, has a regular job plus picks up additional jobs through out the year, teachers have remarked that they would like to have a building full of such people. She knows that currently it's important to have a college education/degree...a high school diploma just doesn't cut it anymore. Plus she wants to go to college. This is an individual who belongs in college. She has watched the cost of a college education more than double since her oldest sibling began several years ago & she knows how hard it was then. Has made the decision to stay in state (like her siblings) because of cost. She stays current with the news and is aware of what is going on. Recently she has begun to make comments about dropping out of college because of money and she hasn't even started yet. She is so overwelmed by the financial aspect. I keep tellng her that we will take it one step at a time...somehow we'll work it out. But I have noticed a tighting in my stomach when I read more & more about the financial situation in our state. With the continued spiraling increases of not only tuition, but housing, books & the array of fees not included in tuition...I don't know. Will she be able to get the education she needs/wants? I know that she's not the only one in her position...there are many others. Education can't be about a free market. Our country can't "afford" not to educate our youth. We can't "afford" to overwhelm them with debt before they have even begun. I certainly don't know what the answer is, but do know that the situation is looking more & more dire.

LogicMan 6 years ago

"Kansas supports too many universities. Millions of dollars could be saved by closing Pittsburg State and Fort Hays State. The remaining four universities (ku, ksu, wsu and ESU) could easily accommodate the students."I couldn't support closing them, but if things get as bad as some predict, reorganizing them (and maybe ESU) into junior colleges might be necessary.Texas did something similar in the past by creating the UT and TAMU systems. So, for example, FHSU could become KU-Fort Hays, and PSU become KSU-Pittsburg.And maybe WSU becomes KU-Wichita (including the KU med school there), and ESU becomes KSU-Topeka (with the law school).The JuCos would produce associates for local consumption, and for transfer to the four-year institutions (KU-Lawrence, KSU-Manhattan, KU-Wichita, and KSU-Topeka). Each JuCo should also have locally-needed 1 or 2 year "vo-tech" training/education programs.

KU_cynic 6 years ago

As a well-paid KU professor I want to second the notion expressed by CNA_Resident that a partial solution for KU and other regents schools would be a modest salary cut of 2-3% for all employees earning above a threshold level, say $50-$75 K. Also, make it a permanent cut, not a one-time unpaid leave or anything like that. That way everybody's salary get's reset and future raises (when conditions improve) would be based on relative merit, not merely restoration of the status quo ex ante. That would get the regents schools about a third of the way to the needed cuts.

Sigmund 6 years ago

yourworstnightmare (Anonymous) says… "A business model of operation would be based on supply and demand. If a product is getting more expensive to produce and demand for the product remains high, it stands to reason that the business should charge more for its product. KU and all regents' institutions need to raise tuition as the free market demands."No a business model would suggest that the most efficient survive. An economics model suggests that when the government subsidizes something via low cost loans to people with little or no credit scores you increase the demand and that increased demand increases the price that can be charged. It is what happened in housing with Fannie and Freddie driving home prices out of reach with cheap money and Sallie has had the same effect driving college educations prices out of reach.If Sallie Mae ceased colleges would have to reduce their prices to attract students which means lower wages and more efficient operations. When Sallie collapses (and it will collapse, only matter of time) KU and KSU will claim they are "too big to fail" and we will be there bailing them out.

bd 6 years ago

ask the provost about the high paying job they made up for his wife?????

remember_username 6 years ago

KU_cynic - while I agree completely with your idea I would be surprised if the suggestion gets support at the decision level. My observation is that those who influence policy are both highly paid and feel little risk for their own positions, thus they would be generous indeed to accept a 2-3% cut to protect the jobs of those "beneath" them.And you thought you were a cynic.

Sigmund 6 years ago

Part of the high cost and expenses of KU is related to, and spent on, the new mission to be a "research institution" thus attracting lots of federal grant money. When KU's focus was as a teaching institution it didn't have the need for high priced researchers and as many new facilities. That hasn't worked out so well (all cost, no benefit). We replaced a first class teaching institution with a third rate research institution and as far as I can see you get a better undergrad education at Johnson County Community College for less money, both yours and taxpayers.

yourworstnightmare 6 years ago

The free market will determine if consumers value a KU education versus other options available.The free market should be allowed to operate to set the tuition levels for KU. Tuition should be raised now because of the increasing cost of the product and the state budget cuts. If attendance drops significantly, tuition would need to be lowered according to the supply and demand of the free market.Let the consumers decide.

LogicMan 6 years ago

"When KU's focus was as a teaching institution it didn't have the need for high priced researchers and as many new facilities. That hasn't worked out so well (all cost, no benefit)."Interesting theory. KU can't be unique on this. Any "fair and balanced", well-critiqued studies on this topic out there?

penguin 6 years ago

just to let you know....KU is not a partner with SLM (Sallie Mae) they are a Fed Direct School (William D. Ford Federal Direct Education Loan Program). There is a big difference. The servicer is the Dept of Ed instead of Sallie Mae. I remember when I worked at SLM and they would not even name a room in their complex the Jayhawk room because KU is a Fed Direct school.

Sigmund 6 years ago

LogicMan (Anonymous) says… "Interesting theory. KU can't be unique on this. Any “fair and balanced”, well-critiqued studies on this topic out there?"Certainly you are not implying that my comments were anything but "fair and balanced" or inaccurate in any way, are you?

bd 6 years ago

Problem is they usually only cut from the bottom, those who will be effected the most!They need to look at all of the "made up" positions that were formed for these top admin. spouses and eliminate them first!The provost's personal secretary he brought with him is also highly overpaid!

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