UA Board of Regents Meeting

UA President Jim Johnsen, left, listens to comments being made via videoconference during a special University of Alaska Board of Regents meeting to consider declaration of financial exigency Monday afternoon, July 15, 2019, in the UAF Butrovich Building. On July 22, 2019, university leadership declared exigency. The big question everyone is asking now is what will happen to the university system.

The University of Alaska Board of Regents voted unanimously Tuesday morning to terminate its previous declaration of financial exigency passed last month in the wake of a possible $135 million budget cut for the current fiscal year. 

The termination vote follows agreement on a compact signed by Gov. Mike Dunleavy and Board of Regents Chairman John Davies last week that outlines a plan to cut the university by a total of $70 million over the next three years. 

Tuesday’s meeting only lasted just over 15 minutes but heard debate over whether the move to drop the declaration was the right thing to do. 

Although UA President Jim Johnsen told members of the board Tuesday morning that no official budget reduction action had taken place since the July 22 declaration, the board opted to terminate the declaration rather than rescind the original action. This clarification in language protects the university from any legal questioning of terminated contracts during the time frame between July 22 and now.

According to Johnsen, the universities and the administration have been cutting costs by freezing travel, restricting hiring, limiting purchasing, cutting positions in and reducing the size of human resources services and cutting the number of adjunct and term faculty contracts.

While the motion was ultimately passed 10-1, Juneau Regent Dale Anderson took issue with the motion to terminate the declaration, noting that the $70 million total still looms in the future.

“I don’t think we can assume that a declaration of exigency is off the table,” Anderson said. “We cannot afford the university-of-yesterday. We can’t think we are okay with a $25 million cut; it’s a $70 million cut.”

Davies views the canceling of the declaration to mean something different though. The chairman said he reached out to Johnsen about the possibility of terminating the declaration as soon as a funding agreement was struck with the governor. 

“It sends kind of a scary message to our faculty in particular, but also everybody else associated with the university. It’s not fully bankruptcy but there’s a sense that things aren’t right and we’re not able to deal with this under business as usual,” Davies said. 

For Davies, the sense of emergency is somewhat lessened, but by no means erased. 

“We’re looking at $70 million over the course of three years and we can’t ignore that,” Davies said. “That’s going to be an issue that we’re going to have to deal with. We will still have to make more consolidations of programs and reductions in staff.”

The compact signed last week by Dunleavy and Davies outlined that the UA will take a $25 million cut this year, a $25 million cut next year and a $20 million cut the year after. But, it also included a number of caveats each party agreed to. For example, the agreement requires the university to update the governor and his administration each year on cost cutting measures taken, moves to increase the role played by community campuses, income levied by the sale of university assets, enrollment numbers, degree completion numbers, levels of campus safety and regulation compliance, research income, other income including tuition and donations, any ins made on the matter of the universities’ remaining unfulfilled land grants and structural consolidation. 

However, according to the state Constitution, the power of appropriation lies with the Legislature, which was not involved in the agreement. So while the regents can use the compact as a framework around which to create their annual budget request and the governor can use the compact as a framework around which to cast his budget proposal, the Legislature is in no way bound to consider the compact in their developing of an annual operating budget. 

This level of conditional funding is unusual and some state lawmakers have referred to the agreement as “extortion,” but Davies resisted such a characterization.

“We’re not agreeing to letting the governor determine what we’re doing in that way,” Davies said. “What we’re agreeing to is just to report on what those numbers are. This agreement isn’t contingent on any particular outcome, all that’s called for is that we report out those numbers.”

Davies said that the Regents still plan to hear Johnsen’s developing plan to consolidate the three current universities into one university in the coming years. But for now, he confirmed that classes and programs will remain the same for the upcoming semester with the hope of extending that protection through spring semester. 

The Board of Regents will hear Johnsen’s plan for consolidation during its regularly scheduled meeting Sept. 12-13 in Anchorage. The meeting will be broadcast live at www.alaska.edu/bor/live.

Prior to that meeting, the Regents will hold an audio-conferenced public hearing Sept. 9 from 4-6 p.m. to hear concerns and comments from Alaskans on the topic of consolidation and other issues. Those interested in testifying can call 1-866-726-0757.

Contact staff writer Erin McGroarty at 458-7544. Follow her on Twitter: @FDNMpolitics.