University of Alaska President Jim Johnsen, members of the Board of Regents and other university officials listened in grim silence in a Fairbanks meeting room to a broadcast of Gov. Mike Dunleavy announcing a massive cut to the university system Friday morning.
Dunleavy vetoed $130 million from the Legislature’s approved funding for the University of Alaska for fiscal 2020, which starts Monday. That cut, on top of the $5 million reduction included in the Legislature's approved budget, brings the total cut in state support to $135 million — approximately the amount that Dunleavy had proposed in his own budget in February.
The Board of Regents voted unanimously to to declare a state of financial exigency if the Legislature does not override the veto.
“The financial exigency will give us the tools to make a lot of really tough decisions,” Johnsen said in a news conference following the veto announcement. “Closing campuses, closing programs, ending services. We will have to lay off a lot of people if this veto is not overridden and our programs and our campuses are all people, basically.”
The university is estimating reducing full-time staff across the system by about 1,300 out of 3,000, has imposed a hiring and travel freeze, started sending furlough notices to all employees, Johnsen said, adding that regents are taking further “aggressive cost management” steps.
“I can’t sugar coat this,” he said. “I can’t say that a veto like this, a huge 41 percent budget cut, can be isolated without serious impact on our programs and services. That would just not be honest with our students, with our people, with our communities.”
Should programs be cut, the university would still be required to allow students in eliminated programs to complete their degrees. This requirement would remain, even in the case of financial exigency.
“We have an obligation to students to help them complete their programs, to teach them out as we say in our business,” Johnsen said.
Tuition will likely be raised in the coming year. Johnsen said the plan he intended to present to the board during Friday’s meeting initially proposed raising tuition 5 percent for fall semester, then getting student feedback in fall on another possible tuition hike in spring 2020.
Johnsen said they may now have to expedite that process.
Johnsen, in a written statement released shortly after 5:30 p.m., said the veto is "more than twice the most extreme cut we anticipated."
“It’s devastating,” he said in the statement. “We had several constructive meetings with the governor and his team over the past few months. I believe we demonstrated UA’s value to the state’s economy, our re-focused mission, reduced costs, increased private fundraising, and strategic investments."
“The immediate impact of the governor’s decision will be to disrupt students’ educations – we will have no choice but to immediately send furlough notices to all employees, and if sustained, this cut will necessitate massive layoffs of faculty and staff, and we will need to end programs rapidly to address a reduction of this scale."
Dunleavy's veto and the smaller reduction from the Legislature amount to a 41 percent cut in state funding for the university and a 17 percent reduction to its total budget as of last year, which includes funding from the federal government and other sources.
Regents Chairman John Davies, a former state legislator, said the 17 percent is likely going to be a larger reduction when combined with the possibility of program eliminations and, thereby, lower enrollment and fewer faculty, all culminating in a loss to designated program revenue.
Office of Management and Budget Director Donna Arduin noted in the Friday morning news conference that the Legislature approved the separation of university funding into two appropriations: one for community campuses including the University of Alaska Southeast in Juneau and community campuses and one for the university's two main campuses in Anchorage and Fairbanks.
Arduin said at Friday morning's news conference with Dunleavy that the veto spares the community campuses and comes direct from the appropriation for UAA and UAF.
Johnsen said it's not so easy, that the schools are intertwined.
“Our community colleges, community campuses across the state and our universities for that matter do not bear all the costs of operations," he said. "A lot of those costs are borne by statewide administration.”
Looking at the UAF Community and Technical College for example, Johnsen said its funding is in the separate appropriations not subject to the veto but that many of its expenses are borne by UAF and the system office.
“The appropriation that was not vetoed is not secure… It will have to pick up additional costs that it’s not now picking up,” he said. “So there will be a definite impact on that side as well.”
At Friday's regents meeting, regent Sheri Buretta questioned the need for furlough notices.
“I just don’t want to create some kind of a panic where we have our best and brightest leaving us because of this situation when there’s a very high probability that it would be overridden by the Legislature by within the next few weeks,” she said.
Johnsen agreed he did not want to create a panic in the university but added he thinks the notices are the responsible thing to do.
Regent John Bania said he would like to see the regents begin planning for the cuts immediately.
“I’m not trying to be pessimistic, but I don’t see because every day seems critical to me, I don’t see how you can count on the veto being overridden,” he said.
Davies said the regents will better know by the week of July 12 where they should focus.
“What we need to authorize that week, assuming no override, is the financial exigency authorization,” Davies said.
UAF Chancellor Dan White said the Fairbanks campus would begin looking at programs for review.
“I think as we look at the budget and the potential impacts of a $135 million budget (cut), the Legislature has already spoken about what they think is important and they think the university is important,” White said in an interview with the Daily News-Miner. “So for me I think, while we will start looking at the programs that we will need to deal with in the event the veto is not overridden, the important thing right now is to focus on a veto override.”
White added that it is too early to tell which programs would be facing cuts, as the university would be looking at everything. He also said they need to give the Legislature a chance.
“They’ve spoken once and they need to speak again, and we’ll wait for that and then evaluate those things,” he said, “but I think it’s premature to say that this program or that program would be eliminated.”
Contact staff writer Kyrie Long at 459-7510.