Universities using economy as an excuse for pay and hiring freezes

Are university and college administrations justified in blaming the current economy as validation for putting drastic practices into place, such as hiring and salary freezes, furloughs and layoffs, often with little or no faculty input? I am convinced that, at many higher education establishments, the recession is not impacting their actual bottom lines to the extent they are indicating.

In recent years, Howard Bunsis, professor of accounting at Eastern Michigan University, and Rudy Fichtenbaum, professor of economics at Wright State University, have analyzed many educational institutions’ audited financial statements while helping prepare collective bargaining chapters for contract negotiations. As increasing numbers of administrations attempt to push through such unwelcome measures, the faculty and AAUP chapters have been turning to these experts to uncover the real facts.

Among those Bunsis has been working with are Bowling Green State University and University of Illinois at Chicago (UIC). Bowling Green is about to organize a chapter of the American Association of University Professors (AAUP). I wonder if it is concern over administrative actions is what’s guiding an overwhelming majority of faculty at Bowling Green to sign cards supporting unionization with AAUP?

At UIC, the request for an outside financial review came from the faculty’s AAUP chapter and the American Federation of Teachers (AFT) for the United Faculty Organizing Committee. Following his study of the university’s finances, Bunsis drafted an in-depth report of the combined campuses audited financial statements, as well as the Chicago campus itself. The report was titled “Analysis of the Financial Condition of the University of Illinois System.”

Bunsis pointed out that, “Overall, the financial condition of the University of Illinois is strong. The conclusion is based on an analysis of the financial statements, as is demonstrated by examining three broad measures of financial performance: revenues versus expenses and the growth in revenues; low levels of debt; and strong reserves. More importantly, the first line of the 2008 financial report states (which was written in January of 2009): ‘The University is well positioned to continue its strong financial condition.’”

At particular issue for the AAUP and the AFT (American Federation of Teachers) committee is the University of Illinois’ implementation of furlough days for academic employees in the system. In his report, Bunsis refuted the claim by some administrators who support furloughs that the value of the investments of the UI Foundation has declined considerably. Bunsis maintains there is no validity to that argument and concludes that, as “expenses are growing or expected to grow at a rate identical to revenue growth, it is not appropriate that furloughs are even being considered.”

An article that appeared in the Chicago Flame on February 8 wondered if “furlough days are doing more harm than good for the university, not just in terms of the dwindling morale on campus, but with regard to whether or not it is sound fiscal policy. It is also unclear if furloughs are fair to faculty.”

Bunsis reviewed Eastern Michigan University’s (EMU) own finances in 2009. He responded to opinions proffered by the school’s chief financial office and a press release issued by the administration, which suggested the institution was suffering major financial woes. His analysis demonstrated that EMU was in “a very strong financial condition and, in fact, the best financial shape it has been in for many years. This may seem surprising given the bleak economic climate in the area, but higher education is counter-cyclical: many people who are unemployed or underemployed go back to school.”

Bunsis is treasurer of Eastern Michigan University’s AAUP chapter. In early February, he was invited to attend the Michigan State of the State speech and sat on the Michigan House of Representatives floor with Pam Byrnes, Speaker Pro Tem.

Like my colleague, I believe that some of our higher education institutions around the country are in better budgetary positions than they appear to indicate. If their administrations could be transparent about the diversity of funds available to them, and place a greater emphasis on academics and on allowing faculty a more inclusive role in governance, our institutions would be more efficient and cost-effective. Additionally, workplace morale would be enhanced and our students would reap the benefits.

Susan Moeller, Ph.D., is president of the American Association of University Professors, Eastern Michigan University.