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The New Reality
University adapts to cloudy economic horizon
If the economy’s rude awakening delivered a painful
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lesson in fiscal affairs, maybe we’ve learned enough by
now to recognize hope on the horizon.
The last 12 months or so at Emporia State University
have played out similar to other institutions. Like a
household examining its declining revenue and ever-present
expenses, or the state of Kansas doing the same
on a larger scale, ESU is weathering its own unenviable
slice of the angst. From July 2008 to March 2009, the
ESU Foundation’s endowed assets lost 25 percent in
value, though the value began rebounding in late spring.
In May, ESU learned it would lose 10 percent of its state
funds, amounting to about $3 million.
At any point in time, the only sure thing seemed to be uncertainty. State cuts were 7 percent, then rumored to be moving to 19 percent. Ten percent was settled on before another 2 percent was added on in early July, reaching a total of 12 percent. It was a moving target with moving consequences. Would faculty and staff be laid off? Would they be furloughed for one day per month, losing 5 percent in pay?
“It’s been a whirlwind for everyone at all levels,
ranging from the highest state leadership all the way
down,” said Ray Hauke, vice president for administration
and fiscal affairs. “There is more uncertainty now than at
any time in recent memory.”
A “difficult budget year” used to mean a smaller-than-usual increase, Hauke said, but today’s reality is substantial declines. The level and rapidity at which state revenues fell off in the last year was very dramatic, driving special requests from the state’s executive and legislative branches to report on how various funding scenarios would impact educational missions at the state’s universities and colleges. Just to discern where ESU stood at any one point in time took a considerable amount of time, Hauke said, and then a new day would bring new requests.
At a mid-May open forum on the
budget and tuition increases, President Michael R. Lane
got that point across: “This presentation was finalized,
oh, 12 minutes ago,” Lane said. “I’m not kidding.”
Lane opened the forum with a topic of great interest to
the large crowd in the Union’s Kanza Room.
“I want to start with a very important matter of rumor
control: where our budget stands today, there will be no
layoffs, there will be no furloughs,” Lane said, speaking
when the expected cut was 10 percent. The comment met
with applause, but all understood his caveat that followed – further budget cuts could put those options back on the
table.
Another 2 percent cut was tacked on in early July, and
as of press time, the impact on ESU was unknown. Even
so, ESU will push forward with its core mission.
“We’re going to be open in the fall,” Hauke said. “We’re going to be carrying on, with hopefully not that
many people able to spot some of the differences. But the
differences are that some of the class sizes are going to
be larger. Some of the classes are going to be covered by
temporary instructors rather than ranked faculty. There
will be fewer graduate teaching and research assistants
supporting those faculty, and 25 classes won’t be offered.
But it will still be a great place to attend. Students need
not fear. We know we’ll still deliver a quality product for
our students.”
While tuition will go up, the one thing ESU won’t do is
attempt to recover the loss in state funding solely through
tuition.
“It wouldn’t be right for our students, and the economy wouldn’t permit it,” Hauke said. “We would be seeing diminished enrollment. We’re always balancing what’s right for our students with what’s right according to the budget. This year, that balancing has been quite a bit more delicate.”
Federal stimulus funds will provide some measure of
relief, but as one-time money it can’t backfill permanent
faculty positions. About $1.5 million is expected in fiscal
year 2010, which began July 1, and Lane said it will offset
operating costs, purchase academic equipment, address
deferred maintenance issues, provide for scholarships,
and fund temporary faculty positions.
To reach the necessary cuts, department chairs and
deans and leaders of other campus units decided how
to meet the percentages. On the academic side, a hiring
freeze for nearly all positions is constricting the class
offerings and increasing workload. Amy Sage Webb,
last year's president of the Faculty Senate and an associate
professor in the English department, sees the impact.
Four positions in the English department will be unfilled
when the fall semester begins. “Faculty are worried
about the integrity of academic programs,” Webb said. “Programs are people, and we’re concerned about the
integrity of our programs.”
In the end, students will select from a narrower range of
class options, and ESU’s reputation of one-on-one contact with
professors could be influenced as class sizes grow. “We are short-staffed. We’ve lost people in almost
every department to make up the cuts,” Webb said. “They’ve all had to make that choice: ‘Do you want to
give up a hand or a foot?’ We’re not afraid of working
hard, but we don’t want to compromise what makes ESU,
ESU.”
Even so, Webb credits university leaders, particularly
President Lane, for dealing honestly and openly with
the campus about every detail he knows, and having
the willingness to field questions in open forums. Webb
also hopes alumni will mobilize, pressing their Kansas
legislators to study the impact of ESU on the state’s
workforce. In biology, for instance, ESU’s graduate
students often work in Kansas zoos and natural areas,
and teach at community colleges. They stay close to
home. “We are staffing the workforce of this state,” she
said.
Advocacy in the alumni base is certainly welcome.
Peter Brodie, alumni relations director, also serves
as ESU’s legislative liaison. “Alumni can speak very
passionately with legislators about their experiences and
the value that ESU brings to not only the local economy
but more importantly how higher education is an
investment in the future of Kansas,” Brodie said.
Alumni can participate on the legislative outreach team
by contacting the Alumni Association and registering as
a legislative volunteer, or volunteer at ESU’s “Under the
Dome Day” in Topeka to discuss with legislators the value
ESU provides in preparing professionals for productive
careers and public service in Kansas and beyond.
Like the university, the ESU Alumni Association
and ESU Foundation have also adjusted. The office’s
budget was trimmed more than 15 percent for the new
fiscal year, driving a close examination of the entire
operation. Event, travel and publication expenses have
been reduced, and much more. Foundation trustees voted
to reduce the allocation percentage on endowed funds
from 5 to 4 percent, more in line with national standards,
to conserve resources. Portfolio adjustments helped
the Foundation escape some of the market’s continued
decline after January, and reap a slight rebound later in
the spring, which made Art Bloomer, chairman of the
Board of Trustees, cautiously optimistic.
Bloomer recalls the
investments’ performance after the last market downturn
in late 2001, when by 2006 the five-year average return
was back up to levels comparable with the portfolio’s
historical returns. “You sometimes have to look backward to see what the
future is going to be,” Bloomer said of the potential for
growth. “The thing that is encouraging to me is that we’re
not out of line with other university endowment losses,
and we can ride out the downturn. I really believe that in
the next two to three years we’re going to see an upturn in
the economy due to all the federal stimulus dollars, and
the stock market will respond accordingly.”
Other bright spots remain in the troubled climate.
In the spring, the Foundation contacted donors whose
endowed funds were “underwater” – meaning the current
value of a fund is less than the original gift amount, and
interest revenue does not finance an allocation – and
many donors stepped forward to provide one-time gifts.
The result is that the amount of scholarships available
to ESU students in the 2009-2010 school year will be
similar to recent years. Moreover, the Foundation’s total
fundraising activity for FY09 surpassed the FY08 total,
even during the downturn. And in the Foundation’s call
center, semester records were set in the fall of 2008
and in the spring of 2009; telefund callers raised more
than any year in the Foundation’s history. In those two
semesters, 1,310 new donors made their first pledges to
support ESU students.
“We have reason to be encouraged, even in these
tough times,” said Judith Heasley, Foundation president
and University Advancement executive director. “It’s
a position many university foundations are finding
themselves in right now. We were able to curtail
immediate expenses while developing a new budget
that reflects shared sacrifice – and better yet, we’re
still equipped to support the mission of Emporia State
University.”
- by Jesse Tuel
Last Updated July 29, 2009