Thursday, October 15, 2009

How to Cut Iowa's Budget

October 15, 2009, 7:20 a.m.

Related entries regarding University of Iowa Budget Issues: See "A University's Strategic Communication; A Modest Proposal to the Regents' University Presidents," October 7, 2009; and "Iowa's Budget Cuts and the University; Economic Collapse Tests Moral Values," October 9, 2009.

Other current, hot topics: Hancher-Voxman-Clapp Relocation. Five-part series on relocation and rebuilding; see Part V, with its links to the prior four, and its "update" analysis of the October 12 forum's "third option" and proposal to raise Hancher, plus a link to the UI Facilities Management Website with streaming video and Power Point slides from the July 9 and October 12 public forums at McBride Auditorium, and "Hancher Relocation Process and Site; University Offers Useful Model for Major Decisions," July 10, 2009 (commentary about the relocation decision making process).

New School Board; Governance; School Boundaries. "School Board Election: Now Work Begins," September 9, 2009 -- with links to 11 related blog entries.

Fairness, Justice and Leadership by Example
(brought to you by*)

When public budgets need trimming it can be done in ways that produce anger, resentment, and painful hardship -- or in ways that can build morale, a sense of community, and loyalty.

It's pretty simple really.

Will the widespread perception be that those who used their power and position to take more than their share when times were good have now continued to use their power and position to keep more than their share when times turned bad and cuts had to be made? Or will the perception be that those in administrative and protected positions are willing to give more than their share, to carry more of the burden, than those who will suffer the most from layoffs and reductions in pay?

Whatever financial and other burdens we will be asked to bear at this time in Iowa's history need to be compared with those of World War II. Soldiers were drafted (although far more volunteered than these days). Men went off to war, and women went off to build ships in shipyards. The rich got a tax surtax, not tax cuts. Even grade school children were expected to use their allowance to buy "savings stamps," ultimately to be traded in for an $18.75 "war bond." Everything was recycled for the war effort, from bacon fat to newspapers. There was no "cash for clunkers" -- just lots of clunkers and no cash. The auto companies weren't building cars; just jeeps and tanks. Food was rationed, as was gasoline. Once you'd exchanged your ration coupons you just did without. We grew our own food in "victory gardens."

Today we fight our wars on the cheap. No one gets drafted. The rich get tax cuts. There's no rationing. The stores are full. Video of our killed and injured fighting men and women is, by consent, kept out of our living rooms. And best of all, we don't have to pay for our wars. We just pass the cost, in the form of multi-trillion-dollar debt, on to our grand children. And when we run out of money we just print more, or borrow from the Chinese, and operate the federal government with a $1.4 trillion deficit. Meanwhile Wall street executives pay themselves multi-million-dollar bonuses with taxpayers' money, the Dow-Jones goes back to 10,000, and it looks like millions of Americans are going to continue to find adequate health care beyond their reach.

So what does this bit of nostalgia and political commentary have to do with Iowa's budget cuts?

World War II, with all its sacrifices, built a stronger sense of community, what it meant to be an American, a sense of pride, of communitarian spirit, than I have ever seen since.

How could that have been possible? My opinion, and that's all it is, is that at least a part of what made it possible was the perceived sense of fairness. The rich took more of the financial burden, not less. We were all in it together.

This morning's papers carry the news that Governor Chet Culver has cut his own salary by 10%. That $13,000 won't do much toward a $600 million deficit. But it will do a lot toward creating the sense of fairness so essential to a successful budget-cutting. Jennifer Jacobs, "Culver to cut his own pay by 10 percent," Des Moines Register, October 14, 2009 ("Iowa Gov. Chet Culver will cut his salary by 10 percent, as will all department directors, the governor announced today. The governor’s salary is $130,000. A 10 percent cut would amount to $13,000.").

I earlier proposed a variation of that for the Regents' universities presidents: the similar (important symbolic, but less significant substantively) benefit of their telling the Regents they want the possibility of bonuses for themselves (for this current academic year) taken off the table -- as Iowan and University of Connecticut President Mike Hogan has done. "A University's Strategic Communication; A Modest Proposal to the Regents' University Presidents," October 7, 2009.

I'm truly sorry they did not do this on their own before I wrote that, or at least shortly thereafter. That's how, and when, it would have had its most powerful impact. But, as is so often the case, better late than never. I'm still waiting -- and prepared to praise them when they do.

I earlier predicted that the Regents' mandate that all construction stop (B.A. Morelli, "UI officials shocked by cut; layoffs likely," Iowa City Press-Citizen, October 9, 2009 ("Regent President David Miles announced in a statement Thursday . . . a construction moratorium on all projects")) would be modified to permit the building of athletic facilities, even though that would have been a tough public relations sell. Nicholas Johnson, "A University's Strategic Communication; A Modest Proposal to the Regents' University Presidents," October 7, 2009. They resolved it yesterday by permitting all construction to continue. Staci Hupp, "Iowa Board of Regents scraps delays in construction," Des Moines Register, October 15, 2009 ("Members of the state Board of Regents on Wednesday backed away from a plan to halt new building projects at Iowa's three state-run universities . . ..").

So while University of Iowa personnel will be undergoing the pain associated with yet another $25 million budget cut a $47 million refurbishing of the Carver-Hawkeye Arena will continue without review. Steve Batterson, "Carver renovations on pace to begin in fall," Quad City Times, October 3, 2009 ("In a timeframe now measured in weeks instead of months, Iowa director of athletics Gary Barta expects work on the $47 million renovation of Carver-Hawkeye Arena to begin this fall . . . 'and we are on schedule to make that happen,' Barta said during an appearance at the Scott County I-Club dinner on Thursday"); and Tom Witosky, "Budget woes might stall U of I arena's renovation," Des Moines Register, October 11, 2009 ("The regents records . . . show that [the UI] athletic department receives $882,000 from the university general fund . . ..").

For those who will say, "Ah, Nick, but that money comes out of a different fund," I respond, "bull feathers," or perhaps "pig wings!" (1) We're talking here about appearances. For these purposes it makes no difference where the money is coming from; those who are already perceived as favored will be seen to be getting more while the rest of us are getting less. (2) The Iowa City Community School District is proposing to "borrow" from its construction funds to cover its operating expenses (an approach, incidentally, I do not support). It may very well be that, contrary to the usual "that's a different fund" mantra, there really would be a way that construction funds could help with the UI's current problems. (3) And, even if not, there would be useful substance as well as symbolism to at least temporarily postponing some of these construction projects (in spite of what I acknowledge are always costly disadvantages in doing so).

Will the most administratively powerful, and highest paid, University employees take a disproportionately larger cut in pay, suffer a disproportionately higher percentage of unfilled positions, layoffs and early retirements? Or will the burdens fall equally -- or worse still, with less impact -- on them as on those who will suffer the most from a cut in pay or unemployment?

As for increasing students' tuition both mid-year and again next fall, see Nicholas Johnson, "Free College, or Let Students Cover it All?," Des Moines Register, October 2, 2002, p. 11A. (Ironically, while students may be the least able to bear the coming financial burden, and are looking at not one, but the possibility of two, tuition increases during the next 12 months, "UI Student Government President Mike Currie said . . . 'This is definitely a university-wide sacrifice [in which] the real issue is to make sure we [the students] are making . . . no more and no less than anybody else.'" That, like Culver's action, is another example of what I mean by budget-cutting leadership. Emily Busse, "$24.7 Million; UI President Sally Mason has two weeks to target hefty budget cuts; Tuition increase, layoffs on the table," The Daily Iowan, October 15, 2009, p. A1.

These are some of the the subjects this blog will be watching and reporting on over the days and weeks to come: examples of fairness, justice, and leadership by example as the State, and University, execute their budget cutting responsibilities.
* Why do I put this blog ID at the top of the entry, when you know full well what blog you're reading? Because there are a number of Internet sites that, for whatever reason, simply take the blog entries of others and reproduce them as their own without crediting the source. I don't mind the flattering attention, but would appreciate acknowledgment as the source, even if I have to embed it myself. -- Nicholas Johnson
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Anonymous said...

Consider the dramatic change in U of Iowa administration. Where once academic types ran the U of Iowa - David Skorton, now MBA wizards dominate the place. These are the same people who brought you the recent economic crisis, the S and L collapse, the auto industry downfall, and Bernie Madoff. These MBA and business wizs pay themselves far more than their value, and pay off the professional leadership in kind.

$500,000 to be CEO of the UIHC? $500,000 each for the Veep and the Dean (ad 40% for their sweet bennies and TIAA CREF accounts) and you can bet these guys are really going to Suffer (capital S) when the janitors get cut.

Remodel CHA and construct a practice facility when the old Fieldhouse would make a fine remodeled practice facility? WHy not as their really is no accountability and responsibility with this gang.

We will move to the Kentucky model where the citizens where under-educated, and under-employed but sure dem suh do gots good basketball tems.

Not only are athletic contributors hit up hard. The MBA geniuses have devised a way to ask sick people (customers not patients) to check a box when they come to their medical appointments allowing targeted marketing to the ill and the infirm (the UIHC customers relay want to give to the enterprise).

This move shows you the immoral stance of the crop of MBAs who would target their mother with cancer for fund raising, and push Mastercards on the college student kids with high rates.

Its not about academics or ethics, or service, but it is about (to paraphrase Nick Nolte in "Blue Chip")....'.money, godam money'.

Whatever propaganda will be put out the rich get richer, the poor get poorer and student's parents join the ranks of the shrinking middle class. It's immoral and it;s unjust but no one will ever stand up and give an honest accounting of the fraud.

Ah, the good old days of the U of Iowa when honesty and integrity meant something.....

Anonymous said...

I was intrigued by the recent posts lauding the Skorton and Hogan days. I wondered how they are doing in these tough times. They're in the worst area of the country for the current economic crisis (Northeast). They've both already had to make huge budget cuts -- much more than Iowa.

I surfed some papers, blogs and web sites for their schools.

Frankly, I'm amazed. It is now so very clear that we let go the 2 best leaders in the country.

For sure they have their antagonists. No one running billion-plus dollar enterprises with huge budget cuts to make does not confront disgruntled employees or customers.

Skorton has compassion and a wonderful touch, even when confronted with the mistakes his administrative colleagues makes -- as evidenced by gender equity issues there and hard budget decisions. He is completely candid when it comes to these issues.

Hogan has incredible vision. He knows exactly what the challenges are for Connecticut and even if it's controversial and makes faculty uncomfortable, he's honest but compassionate. Look at how he's driving a new vision for their medical school and research mission through partnerships with non-academic organizaitons. It's really amazing.

Also, I can't help noticing that Provost Loh has begun borrowing on Hogan's and Skorton's communication and consultation style -- a smart move by him.

Mason, meanwhile, is stuck in a non-consultative, secretive style. She must change or her days will be limited.

Sorry for the long post, but I love Iowa and I want to see us succeed. I'm worried, though, that we missed our chance when the Regents chased Skorton and Hogan out.