Alaska president seeks cuts ‘glide path’, not ‘crash landing’

While fighting huge state funding cut, James Johnsen concedes overcapacity and low interest

July 5, 2019
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State spending on higher education has been in short supply in the US for some time now, but the scale of the cuts proposed to the University of Alaska – 41 per cent in a single year – still provoked shock.

James Johnsen, the system’s president, told Times Higher Education that the $135 million (£107 million) saving was far more than his 16 campuses could absorb. But he conceded that the university was significantly larger than Alaska’s current population justified and that some spending reduction might therefore be warranted.

“I think there’s an argument for a gradual glide path of several years, something that is manageable by us, as opposed to a crash landing,” Dr Johnsen said.

Dr Johnsen said he and his staff had been offering such ideas to Alaska’s governor, Michael Dunleavy, but had received no response for a month when Mr Dunleavy announced the 41 per cent cut last week.

The stunning magnitude of the funding reduction and the resulting talk of closing multiple campuses in Alaska has alarmed university leaders nationwide.

The Alaska situation, however, is unique in some key aspects that perhaps make the governor’s action less dire – and the overall situation less of a national bellwether – than it might initially seem to some outside the state.

First, Alaska is among a small group of states – including Oklahoma, Montana, Wyoming and the Dakotas – whose economies and government budgets are highly reliant on revenue from oil and other natural resources whose values can fluctuate wildly.

“We live this,” said Mark Hagerott, chancellor of the North Dakota University System, whose state support was cut by almost 20 per cent in 2017 when oil prices plummeted from almost $100 a barrel to $25.

Second, as Dr Johnsen acknowledged, Alaska might not need as many higher education institutions as it has because it has long had one of the nation’s lowest rates of college attendance.

The Alaska university system simply had too much capacity, Dr Johnsen admitted, and regular and steady annual cuts might be appropriate.

“I don’t have a specific number” to suggest, he said, “but I do think that a $10 million reduction each year, while not comfortable, is something that can be managed.”

That, however, is not an immediate option. The Alaskan legislature was due to meet, with the only alternative being to override the governor’s decision to cut the $135 million taken from the universities.

Such an override would require agreement by 45 members of the 60-seat state legislature. The outcome appeared close, with about five or six of Mr Dunleavy’s fellow Republicans seen as key undecided votes.

If an override is granted, thus restoring amounts originally approved by lawmakers, the university system would lose only $5 million of its current $327 million state appropriation. Considering all sources, including tuition fees, the university system currently spends just short of $900 million a year on its 17,500 students.

Much of the current crisis stems from the Alaska Permanent Fund, which since 1982 has been handing state residents an annual dividend from oil-related revenues. The fund’s per capita payment had been about $2,000 per year, but it shrank in recent years, largely because of declining oil revenues and poor stock investments. Mr Dunleavy won office last year largely on his promise to reverse the shrinking value of payouts and bring them back to about $3,000 a year.

Viewing the situation from North Dakota, Dr Hagerott said he did not want to comment on the wisdom of Alaska paying that money to its residents rather than investing for future generations. But he observed that North Dakota politicians faced similar pressures and had so far resisted.

That, however, remained a real struggle, Dr Hagerott said. North Dakota’s governor and lawmakers are soon to begin discussions on how best to budget for the long term, he said.

“We’re trying to think of our children’s children, and how to have a better life for them,” Dr Hagerott said.

Dr Johnsen said he wished that more Alaskans would study at the university level and expressed hope that companies in the state would make good use of their training if they did.

But, he acknowledged, Alaskans are not doing that, and the university system’s low student-to-faculty ratio – including eight-to-one at the flagship Fairbanks campus – cannot currently be justified.

A place such as Harvard University perhaps can afford that kind of faculty depth, Dr Johnsen said. “But I’m a state university system – that is irresponsible to use public resources in that way,” he said. “I have to be honest.”

Either way, Dr Johnsen was bracing for the loss of top academics. During a recent visit to Washington, he said, he was told by staff at federal grant agencies that they were “getting calls from our faculty for references”.

The University of Alaska Fairbanks, regarded as one of the world’s best small universities, has leading research programmes in areas that include ocean sciences, ecology and engineering.

Fairbanks so far has managed to keep key faculty in those fields, said the university’s provost, Anupma Prakash. “But with a budget cut of this nature, there is anxiety about that critical mass,” she said. “That, at the moment, is up in the air.”

paul.basken@timeshighereducation.com

POSTSCRIPT:

Print headline: As brutal cut looms, head aims to avoid ‘crash landing’

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Reader's comments (2)

So, the annual budget for the Alaskan U system works out at US$900m for 17500 students - or an eye-watering US$51,430 per capita. That is about €46,000 per student. In my institution, which is not particularly poorly funded, the per capita cost/income (the two are roughly equal! ) per student is about €8,600. So the Alaskans are spending more than 5 times as much. They must have a gold-plated HE system :-)
The University of Alaska budget includes substantial external research grants and other items that are not directly related to instruction. So comparing per capita income/expenses based on the total budget makes no sense.

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