UA Board weighs consolidation, downsizing after financial exigency vote

(KTUU)

ANCHORAGE (KTUU) - The University of Alaska Board of Regents declared financial exigency in a 10-1 vote Monday morning.

Declaring financial exigency will allow rapid downsizing by laying off faculty and closing programs to operate in line with a state funding cut of 41 percent. University President Jim Johnsen said most of the cost reductions will come from laying off faculty.

"We have a fiduciary responsibility to make sure that the institution survives, and I think unfortunately right now we are grappling with survival," board chair John Davies said before the vote. "I think it's unfortunate and I don't think the budget circumstance is a fiscal crisis. I believe it's more of a political crisis. It's some choices that have been made by the governor and by a minority of the legislature, and in our system that's the budget that's going to be handed to us."

The move comes after Moody's credit rating agency downgraded the university's credit, citing a failure of the regents to declare exigency as one of their reasons.

After the financial exigency vote, President Johnsen presented three options for restructuring the university system to the board.

The first option would eliminate one or more university and campuses. Regents showed little interest in discussing this option. Although listed benefits of the option would include limiting the impact to programs and units that are cut, the risks listed include high negative economic impact on communities and could deny access to higher education for a large number of Alaskans.

The second option would keep the current UA structure and distribute state funds proportionally to each university, but each university would have reduced program offerings.

The third option would create a new University of Alaska which Johnsen said is designed to fit the enrollment and budget.

This route would consolidate the existing universities into one accredited institution. Johnsen pointed to the University of Washington, Penn State University and Kent State University as examples of multi-campus systems with a single institutional accreditation.

UAA chancellor Cathy Sandeen said that she is not opposed to the idea of consolidation. In her previous job as Chancellor of the University of Wisconsin Colleges and University of Wisconsin Extension the system began a sweeping merger of 13 two-year colleges and seven four-year colleges.

"All three of these options allow us to cut. All three of these options allow us to shrink. It's just a matter of whether we're doing it gradually or via amputation, essentially. It's that simple," Johnsen said.

Johnsen said that ultimately, the cuts will result in a "significantly higher" student-to-teacher ratio.

"The real savings will be in frankly a considerably higher student-faculty ratio than we currently have," Johnsen said. "In terms of the on average statewide student to faculty ratios, we need a whole lot more students basically to warrant the faculty numbers that we have across the system. And that's a painful thing to say, but that is the case."

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