Fairbanks sleeps as Dunleavy administration targets UAF with flawed analysis
This is the third in a series of blog posts about inaccurate and misleading statements the Dunleavy administration has made in trying to justify a catastrophic budget cut for the University of Alaska.
I’m surprised that Fairbanks hasn’t had a much stronger reaction to the attack by Gov. Mike Dunleavy on the University of Alaska Fairbanks.
Perhaps people are not paying attention to the presentations by Mike Barnhill of the Dunleavy budget office in which he takes direct aim at UAF, offering inaccurate and incomplete information.
He offered a “what-if” scenario for a $75 million cut to the Fairbanks campus. Coupled with other Dunleavy cuts to K-12 education, the borough and health care, the governor’s proposed budget would take $150 million or more out of the Fairbanks economy.
Barnhill told legislators last week that the University of Alaska Anchorage is a model for higher education in Alaska because on a per student basis, it costs less than half as much as UAF. The Fairbanks campus has lower enrollment, so the per student cost is higher and therefore less efficient.
The cost per student at UAF is “strikingly higher” than at UAA, he said.
“What we’re struggling here is a high-cost structure without sufficient students to support it,” he said of UAF. “That really is the heart of the proposal of the Dunleavy administration is to look for opportunities to scale and to consolidate.”
Among Barnhill’s major errors are his assumptions that UAA and UAF have the same mission, attract the same students, offer the same courses, provide the same degree programs, employ the same faculty members, have the same buildings and are the same academic institutions in every way.
UAF has a much larger emphasis on graduate programs and has more than 10 times the level of research, factors that make his simplistic comparisons misleading. The UAF utility bills are much higher, its buildings are much older, it has had to use bonds for more facilities and it has many costly science labs not needed at UAA. It also has public outreach programs that function statewide.
Add to that the assumption that the university can best serve Alaskans by serving Alaskans in the state’s largest city and supporters of UAF and Interior Alaska should be worried.
“It appears that the University of Alaska Anchorage has achieved a very cost effective structure and that’s impressive to me, particularly when I think we all take it as a given that costs in Alaska are higher,” he said. “I chalk that up as a win for the University of Alaska Anchorage in terms of managing costs effectively.”
Total expenditures for the UAA campus and UAF are similar, but the per student cost in Fairbanks is $59,000, while it is $24,000 in Anchorage.
But his numbers are flawed because UAA has a community college program within its structure and Fairbanks accounts for that part of its operation separately. Apply the same calculation to UAF and the cost per student in Fairbanks would drop by about 15 percent.
“Because Anchorage has so many more students than Fairbanks does, the per unit costs are much lower. In other words, they’ve achieved scale and there’s efficiency in how they’ve structured the program,” said Barnhill.
“I neglected to mention what this data excludes. This data explicitly excludes revenues and expenditures associated with research, with public service and with auxiliary services, which is dormitories and cafeterias. My understand is this excludes the research costs,” he said.
University experts tell me he is incorrect, however, and that close to $25 million in research money and federal matching funds are in the UAF numbers. The cost per student is higher at UAF than UAA, but the gap is not nearly as wide as he asserts.
Why is the cost higher at the University of Alaska Fairbanks? The research focus at UAF is the main factor—research institutions across the country have a much higher cost per student than other universities—but Barnhill wrongly attributes most of the difference to lower enrollment.
“I’m going to submit to the committee it’s not higher costs—I mean higher costs could well be a part of it—but I think the more significant part of it is the lower number of students,” he said.
He said there are 3,600 full-time equivalent students at UAF and 8,600 at UAA.
Rep. Adam Wool said that UAF costs associated with research are expensive, but research dollars should be part of the calculation. Barnhill repeated that research is not part of those numbers.
“The research, my understanding is that’s excluded from this depiction, but I think President Johnsen agrees, or I agree with him, let’s put it that way, that the research program at the University of Alaska is actually a very powerful core product that could be leveraged for a solution, for part of the solution,” he said.
He concludes that the university “does an excellent job of managing costs at UAA and in the community campus system” and UAA is “very competitive nationally.”
So how does the Dunleavy plan for a 41 percent budget cut in the UA general fund appropriation apply to the future of UAF?
Barnhill said he was not offering a plan or a recommendation, “it’s more of a scenario or a what-if. And the what-if is ‘What if each of the main campuses of the University of Alaska operated with the same cost structure that the University of Alaska Anchorage does?"
“When that happens, if there is a way of implementing a leaner cost structure in each of these universities, then that produces something around a $90 million UGF (unrestricted general fund) savings,” he said.
Of that amount, $75 million would come out of UAF.
“If that happens then you bring the educational core service of the University of Alaska into a price point, if you will, a general fund price point of just around $11,000 per (full-time equivalent) FTE,” he said.
When Anchorage Rep. Andy Josephson said that the $91 million cut would be far short of the $134 million cut proposed by Dunleavy, Barnhill said, “It gets you part-way there. It’s a what-if.”
I think it is more of a “what if we run the wrong numbers and reach the wrong conclusion” scenario.
UA President Jim Johnsen responded to Barnhill by saying that every organization in Alaska would find economies of scale in Anchorage because it is the population center. It would be foolish to base the future of the university on that calculation alone.
“Really the choice before us is do we want to have a University of Alaska, a university for Alaska or do we want to have a university of one big city? I think we would rather have the university that’s serving Alaska rather than a university just serving one location in our state,” he said.