Monday, January 18, 2010

How to save 28 million over two years

The Eagle reports on the long-expected budget changes for Texas A&M:
Texas A&M may have to cut $28 million out of its budget over two years.

University officials had expected budget instructions from state officials for several weeks. They came Friday, as state leaders directed all agencies and higher-education institutions to plan for a 5 percent reduction in spending.

The reduction averages $14 million a year over the two years -- or biennium -- that began Sept. 1. The university has flexibility in deciding how much to reduce each year. Since more than four months have passed in fiscal year 2010, one option would be a smaller cut this year and having fiscal year 2011 shoulder the rest.
Back in June, we pointed to a letter from former TAMU CFO William Krumm about budgets. One of Krumm's points is that the total budget aggregates a lot of sources that are neither tuition nor state funds. We could reduce the total TAMU budget, for example, by faculty losing their extramural research grants. While some might favor this to force the faculty to focus on teaching, this doesn't actually save much money.

To save significant amounts, you have to look were the State money actually goes. Last August Vision 1920 linked to an analysis of where the growth in the cost of higher ed is coming from: universities are adding administrators and staff at rates much higher than the rate of inflation. In the comments, Karl Katzke explains one important reason why staff and administration keeps growing faster than faculty:
We do end up spending quite a bit of time reading SAPs, collecting and collating documentation to prepare for audits, and making sure that we're in compliance with some very detailed, mutually contradictory, and absolutely nonsensical state and federal laws.
As Karl points out, this is unlikely to change.

Vision 1920 will try to explore other ideas or saving money in future posts. Send us your ideas!

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