March 3, 2017
(For updates on legislative action on the UA budget since the BOR meeting see the Capitol Report)

The University of Alaska Board of Regents delved into a wide array of the university’s strengths and challenges at its meeting March 2-3, focusing directly on the FY18 budget making its way through the House Finance Committee.

During its two-day meeting in Anchorage, the board agreed that the university must continue advocating for the $341 million unrestricted general fund (UGF) budget request it passed in November. Additionally, the board said further reductions to the university’s current state UGF budget of $325 million will require serious cuts, including the loss of programs as well as staff and term and non-tenure track faculty positions.

President Jim Johnsen told the board that if the budget is cut, decisions would need to be made to address what programs or services the university would no longer be able to offer. Almost every unit would be affected, he said.

The House Finance subcommittee working on the university’s budget passed out a budget at the governor’s proposed level of $325 million. The full House Finance Committee will consider the university’s budget next week and the Board of Regents is urging the committee to consider amending the budget to the regents’ request of $341 million.

The Senate Finance Committee, meanwhile, has indicated its intent to reduce the university’s budget by 5 percent from the current funding level of $325 million, which would bring the funding down to $309 million – nearly a $70 million reduction from 4 years ago.

The Senate Finance Committee also noted that for the next two years it will propose an additional 4 percent, then 3 percent reduction per year, which would reduce the state unrestricted general fund appropriation down to $288 in FY20. To put that into perspective, Michelle Rizk, vice president of university relations and chief strategy, planning and budget officer, explained to the board the $53 million cut is on par with reducing UAS, with its FY16 $27 million budget, two-fold. A cumulative $90-million reduction would be similar to almost eliminating the entire Anchorage campus. These reductions are before factoring in the significance of fixed cost increases over the same time period.

“A larger discussion - if we get the Senate reduction - would be if we consider tuition increases. It would barely touch the impact of the reduction,” said UAF Chancellor Dana Thomas. “A 10 percent tuition increase would only cover one-tenth of [UAF’s] current budget gap.”

Budget reductions over the past three years have resulted in 927 fewer employees today than 3 years ago; hundreds of employees have reduced assignments and increased workloads. Morale has been significantly impacted. In terms of academic program reductions, 50 out of approximately 478 programs have been suspended or eliminated. With continued budget reductions even some medium-sized, well-performing programs are coming under special review and are being considered for elimination or suspension.

A special budget meeting is planned for April or May once the board has a final state appropriation.

The budget discussion also focused on revenue generation through both enrollment growth and research expansion. Johnsen told regents that transforming the campus culture relative to recruitment and retention is imperative and that efforts are underway at each campus to reverse trends of declining enrollment. The campuses have reallocated resources to this effort, in particular a focus on in-state recruitment and advising, and student support programs that enhance retention. Enrollment is a key driver of the board’s long term 10-year budget plan. Dramatic enrollment increase, with moderate tuition increases, is critical to lessening long-term dependence on state funding.

Johnsen also directly addressed the faculty votes of no confidence of his leadership, firmly stated his confidence in faculty, respect for their views and confidence in the future of the university and the improvements made to the Strategic Pathways process moving forward. The Strategic Pathways process evaluates the organizational structure of the university in a way that increases educational quality, cost effectiveness, access, and takes into consideration community impact and financial sustainability for the long-term.

• Since January, when options for Phase II were announced, Johnsen has extended his internal engagement, holding more than 30 listening sessions with those who work directly in or with areas under review and asking for their input and recommendations on proposed options. Those meetings helped form the Strategic Pathways discussion at the board meeting.
• The board and President Johnsen discussed potential options and initial directions on the eight areas under review in Phase II of Strategic Pathways – E-learning, fisheries, community campuses, health, human resources, student services, university relations and institutional research – but will not be making decisions or recommendations until the June meeting after additional input from university governance groups and a cost/benefit analysis has been conducted.

During a wide ranging discussion about university shared governance, Johnsen said he’s considering an expansion of the university’s decision making body, the Summit Team, to include other important sections of the university not currently represented on the board. He also wants to include governance leaders.

Governance leaders participated in a robust discussion of shared governance at the University of Alaska. The board and heads of the staff, faculty and student governance groups discussed the value of trust, communication and shared expectations and the use of established processes in overseeing the management and guidance of the university system.

Other items on the board agenda included a presentation on the Arctic Domain Awareness Center, a Department of Homeland Security Center of Excellence that performs Arctic research for a number of Federal agencies. It is one of two national centers of maritime research working closely with the U.S. Coast Guard on research that significantly addresses operational needs.

“This is highly applied research meeting emerging needs in Alaska and nationally,” said Johnsen of the presentation. “This is going to meet world needs in a critical part of the earth – where we live. This is also a marvelous collaboration between UAA and UAF in partnership with federal agencies. It goes to show, when leadership commits to something it makes great things happen.”

The board also passed a Resolution of Appreciation for outgoing Student Regent Stacey Lucason, complimenting her hard work, drive, strong student voice and the passion and value she brought to the board.

“While we certainly have bumps in the road, we are clearly seeking to be the university for Alaska and strive to be the best university we can be,” Johnsen said.