University of Alaska Regents Declare Financial Exigency!

Dear Commons Community,

As expected, the University of Alaska’s Board of Regents declared financial exigency yesterday, calling it a sad but necessary step given the budget crisis created by a 41-percent cut in the university’s budget from the state.  The vote was 10 to 1 in favor of the declaration, which system leaders said was needed to allow the system to downsize rapidly. That could include closing programs and laying off tenured faculty members.  As reported in The Chronicle of Higher Education:

“It’s hard for me to contemplate the path we may have to go down,” said John Davies, the board’s chairman. “But we do have a fiduciary responsibility to be sure the institution survives. Unfortunately, I think we’re grappling with survival.”

Members who said they were voting reluctantly in favor of the motion pointed out that it was a tool, not a plan for making cuts, and that it could be modified, restricted, or withdrawn if lawmakers restored at least some of the budget.

“I’d celebrate to the stars if things got reversed, but I don’t think it’s likely,” Davies said.

If the university does nothing, it will run out of state money by February, some of the regents pointed out. The cuts affect the 2020 fiscal year, which started on July 1.

Last week the regents delayed a financial-exigency vote until the end of the month, hoping that by then it would be clear whether lawmakers would restore some money to the system after failing to gather enough votes to override Gov. Michael J. Dunleavy’s spending cuts, spurred by line-item vetoes.

Even if they did, the regents said, Dunleavy could once again pull out his veto pen.

But then Moody’s Investors Service downgraded the university’s credit rating by three notches, which the university system’s president, James R. Johnsen, said, “makes bonding or borrowing money substantially more difficult and expensive.”

University leaders have said the impact of Dunleavy’s cuts could eventually exceed $200 million — even more than the $136 million cut this fiscal year.

One of the regents, Cachet Garrett, wiped tears from her eyes as she called the vote the hardest she’d cast. “I promised the students of Alaska that I would represent them and they have asked me to vote yes,” she said. “The faculty who I adore and admire have asked me to vote no.”

Ultimately, she had to prioritize students. But she stressed that both faculty members and students need to be included in the decisions about how the budgets are cut.

The regents are considering various options for shrinking the university system, which includes three separately accredited universities as well as 13 community campuses. Among the options are shutting down campuses, designating universities as “lead” campuses for different programs, and consolidating the system into a single accredited university. One of the greatest challenges is providing access to students who are sparsely scattered across a vast geographic area, some of which is inaccessible by land.”

Consolidation of colleges is very much a possibility and would follow an option taken recently in Wisconsin and Connecticut.



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