“It was the best of times; it was the worst of times…

Alaska Budget Graph

“…it was the age of wealth, it was the epoch of waste,” we paraphrase with apologies to Charles Dickens.

For over four decades Alaska’s great Prudhoe Bay wealth elevated the sparsely populated, largest state in the U.S. to the biggest per capita spender.

Its public officials knowingly created an unsustainable budget.  They knew that North Slope production would decline but allowed their policies to create a state budget that was over 3/4 dependent on that huge but inevitably declining source of wealth.

That unsustainable wealth funded a massive university system and K-12 network producing lackluster results and a growing body of professionals demanding, “feed me, feed me”.

Policy makers supported the largest per capita array of not for profit organizations in the country with political constituencies in every nook and cranny of America’s only Arctic state.  They committed future budgets to fund scores of big and little airports throughout the largely roadless state.  They subsidized fuel oil powered electric service throughout rural areas, transforming independent, subsistence cultures into politically powerful, dependent enclaves.  The lack of restraint on growth of government and utility employee unions further contributed to the march of this northern economy toward the current fiscal cliff.

What now threatens Alaska’s unsustainable age of wealth?  Its foolish, unsustainable spending practices have brought it close to insolvency (i.e. in spite of a constitutionally protected, $65 billion “permanent fund”).  As the current governor seeks to convert the unsustainable budget process into a durable one, budget vetoes bring out countless opponents, including those from the education block.

More background to come later.  Meanwhile, we provide below the tale of two university teachers.  One is a rather hysterical liberal arts teacher from the University of Alaska’s Fairbanks campus;  she cries out for support of influence leaders in the Lower 48.  The other is a University of Alaska – Anchorage political scientist who more thoughtfully advocates a solution leading to a reformed system of higher education.

-Dave Harbour


From Must Read Alaska:

POETRY PROF CALLS ON WORLD’S COMEDIANS TO ADDRESS ALASKA BUDGET CUTS

A University of Alaska Fairbanks creative writing teacher calls the governor and legislators fascists. Some suggest she needs to look up the word “fascist.” We’re taking up a collection to send her a dictionary. One MRAK reader posted a very polite disagreement with Sara Eliza Johnson on Twitter and was immediately ….


Dear Friends of the University of Alaska –  Anchorage:

I am taking the liberty to inform you about the difficult situation with University of Alaska Anchorage. Nobody has prompted me to contact you.

As leaders of our community who have an interest in the success of UAA, you ought to be aware of the following perspective.

Since the price of oil crashed in 2014, many of us on the UAA Faculty Senate pushed for reform of the UA system. In our view, the system was overly-centralized and inefficient. These problems, which were recognized by outside reviewers of our system, were disguised in the past by plentiful funds made available by oil revenues. The UA system is more reliant on state aid than almost every other public system of higher education in the US, and we did not believe that this was sustainable. We called for bold plans to reform.

Instead, senior leadership of UA chose to try to centralize the system further, and to continue to rely on lobbying for state aid. We objected to this course, and at bottom, this objection was the cause of our votes of no-confidence in senior leadership of UA that were delivered by faculty senates of both UAA and UAF in January, 2017. After those votes, nothing changed.

The crisis of higher education in Alaska right now was foreseeable and foreseen. At the beginning of this year, other members of the faculty and I formed a committee appointed by the UAA Faculty Senate to study reform of UA. It is the largest and most active university committee on which I have ever served, which demonstrates how deeply devoted many faculty here are to our institution. Our report was adopted by the senate this May and called for the decentralization of UA, which you may see at FacultySenateReform.com.

The structure of UA governance and administration was established in the state constitution when the University of Alaska was one campus with less than 1,000 students. But the university has grown into a university system with tens of thousands of students and its institutions are spread out across a landmass equal in size to Mexico. Yet we have one governing board that, however well-intentioned and individually skilled, cannot know all of its parts well enough to know its charge and provide effective governance. Our statewide administration is beyond bloated and makes heavy-handed decisions that interfere with university leadership. For example, UAA is fortunate to have an outstanding chancellor and she has the full confidence of faculty. But our statewide administration wastes her talent by their heavy hand. Overall, the system cannot perform well due to this structure regardless of the capabilities of those who serve in the system offices and on the Board of Regents.

Here is some proof: Despite our oil boom and the rise of the stock market since the 1970s, the UA endowment is a mere $200 million. In comparison, the endowment of the University of Texas system is $26 billion. We were both oil-rich states. Our $200 million endowment is less than one quarter of UA’s annual budget in 2018-2019, and is less than one fifth the size of bill for deferred maintenance, which tops $1 billion. We can do better.

Our committee believes that by giving each of the three universities independent responsibility and authority, they will be more sensitive to market pressures, will make better decisions, bend down their cost curves and wean themselves off state aid. Independent boards of trustees for each university, rather than one statewide board, are in a better position to know their institutions intimately and provide better governance in consequence. They can be more effective at helping institutions raise their own endowments, develop strong relations with their own alumni and forge significant partnerships with the private sector. We believe that the quality of education and research will improve under these changed conditions.

Unfortunately, our efforts were too late, when on June 28th, the governor confirmed his cuts to the UA budget. Since then, we have been working feverishly and hoping for a compromise between the governor’s forces and his opponents, by which the cuts would be moderated in exchange for a commitment to reform. Moderated cuts, we hoped, would give reform a chance to work. The parties did not come together and our clock has run out.

According to a presentation published yesterday by the President of UA, on Monday he will ask the Board of Regents to declare a system-wide fiscal exigency. This declaration will grant extraordinary powers to the President to reshape the entire university system, shut down UAA, or complete the consolidation of our three accredited universities. These are among the options that he has laid before the Board.

My understanding is that although it will be difficult, UAA can handle a 41% cut to our state aid without financial exigency, and Board policy allows financial exigency to be localized. We also understand that the only way the President can pick apart UAA or close our university is by putting us under a system-wide financial exigency. The response of my committee is also available on FacultySenateReform.com.

The centralized structure of our system is what made us vulnerable to the governor’s cuts and created our present financial crisis. If UAA can come through this intact, I hope that you will support us in reforming our system and freeing UAA. I believe that we have many pieces that can become the basis of a great public university, but we cannot work towards this end unless we are more independent of centralized control.

Some of you have worked with me in a business or civic capacity and from my personal experience I know that if UAA leadership were free to work with you in building a new, independent university, we could achieve wonders. I hope that in the future we will not be talking about UAA’s survival but rather how we can build an outstanding, new board of trustees, dedicated to UAA.

I hope that you will share this with other business and civic leaders who care about UAA. Your support is greatly appreciated.

Sincerely,

Forrest Nabors

Chair, Committee on Governance and Funding Reform, UAA Faculty Senate

Associate Professor and Chair, Department of Political Science, UAA