Monday, October 19, 2009

UI Budget: Waivers Wave Goodbye to Savings

October 19, 2009, 7:25 a.m.

By any standard one of the biggest issues ever confronting the State of Iowa and its state universities is the handling of the past, present and future budget cuts occasioned by the current Wall Street created economic crisis. Here are some earlier blog entries on this subject, followed by today's comments about "waivers."

"A University's Strategic Communication; A Modest Proposal to the Regents' University Presidents," October 7, 2009

"Iowa's Budget Cuts and the University; Economic Collapse Tests Moral Values," October 9, 2009

"How to Cut Iowa's Budget; Fairness, Justice and Leadership by Example,"
October 15, 2009

"How Many Administrators Does It Take? Administrators Are Multiplying & Sucking Us Dry," July 16, 2009

Consistency, Hobgoblins and Waivers
(brought to you by*)

For the most part I agree with Emerson's observation that "A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines." Ralph Waldo Emerson, "Self-Reliance," Essays: First Series (1841). Among my concerns and complaints about administrators generally, and educational administrators in particular, is what he called "foolish consistency," the lack of the imagination or will to, as Robert Kennedy put it, "Dream things that never were and say why not."

But we must also reflect on Emerson's qualifier. It is not "consistency" that rides on the back of hobgoblins, as he is so often quoted as having said, it is only "foolish consistency.

I recall an occasion when, as an FCC commissioner, I was pleased to be able to vote with my fellow commissioners in announcing a new policy. Alas, I cannot now remember the policy, nor do I have the time or inclination this morning to try to track it down. It may have had to do with the joint ownership of TV stations and newspapers in the same city. In any event, I thought it a good policy; one that would not be popular with the big media owners, but was nonetheless in the best interest of the American people.

But I was not so pleased with what the Commission did thereafter. My recollection is that in something like the first 11 cases to arise under the new rule my colleagues listened to the pleas of these major corporations and agreed, not to repeal the rule mind you, but to "waive" it in the case before them. This necessitated my return to my much more comfortable role as a dissenting commissioner. The waivers were, in my judgment, neither adequately justified by the parties or commissioners, nor warranted.

In short, the "consistency" I was calling for was necessary if there was to be any rule at all. There was nothing "foolish" about it.

I was reminded of that experience yesterday while reading B.A. Morelli, "U of I Health adds official in face of budget trouble," Des Moines Register, October 18, 2009. And see B.A. Morelli, "UI Health Care adds new position at hospital," Iowa City Press-Citizen, October 17, 2009 ("A Press-Citizen review last year found that UI spent about $1 million on four new senior positions in 2008, and the university created three new vice president positions. . . . 'I can't think of any justification for adding any position while these cuts are being made that can't draw down more (grant) dollars or doesn't save lives,' said Rep. Jeff Kaufmann, R-Wilton. 'I can't believe they've gone this long and they are adding it into a half-time position -- and that couldn't wait? Even if it is $45,000, I don't care if it is $5,000, it sends a message to people at the bottom of the organization. I just don't understand it right now,' he said.").

Here we are, confronting a budget crisis. The Board of Regents has put a freeze on hiring, voted for a halt to construction (until they voted against it), is considering a mid-year tuition increase, layoffs, cuts in salaries and benefits, has at least nodded in the direction of fairness in all of this, and what does the UIHC do?

Morelli reports that it, "filled a newly created position of chief medical information officer last week -- the same day university officials were instructed to consider temporary and permanent layoffs and a tuition surcharge" (an emphasis in the Register's story and headline that doesn't appear in the Press-Citizen's version).

And why is this position necessary? Because it accompanies a $61 million investment in a new computer system -- an amount that exceeds the cuts being asked of all the Regents' institutions combined. (The same can be said of the Regents' decision to go ahead with the $47 million modification of the Carver Hawkeye Arena, following its earlier decision to halt all construction.)

And who is to fill this position? Someone who already has a couple of what one would think are full time jobs -- practicing medicine while providing administrative services to a major division of UIHC.

So this new title of "chief medical information officer" -- whatever that may mean -- is designated as only a half-time job.

And what is this new position, during a hiring freeze, going to cost us? $46,000.

Well, that's only about the average for an Iowa family. Not much for a doctor, right? Not until you consider that this is on top of the $245,030 he already earns, bringing the total ($291,494) to well over $300,000 with benefits.

Now it's long past time that I acknowledge I have no inside information about this decision. Had I been involved in the process I might well agree with Morelli's report of Regent Bob Downer's view of the matter: "Bob Downer, a member of the Iowa state Board of Regents who leads the hospital oversight committee, backed the position. Hospital finances have been improving, and the position was viewed as essential, Downer said." (But see, "How Many Administrators Does It Take? Administrators Are Multiplying & Sucking Us Dry," July 16, 2009, with its link to Miles Weinberger, "Rethink priorities in UI hospital layoffs," Des Moines Register, July 11, 2009.)

So I'm not arguing that this was necessarily a wrong decision, that our new "chief medical information officer" is not worth all he's being paid and more, or that the new $61 million investment could be equally well handled by those already in place.

All I'm suggesting is that if the budget cutting process is to be perceived as fair and just for all (see "How to Cut Iowa's Budget; Fairness, Justice and Leadership by Example," October 15, 2009) -- not to mention be effective in creating any meaningful savings -- there is going to have to be some consistency in holding to the rules. The exceptions are going to have to be very, very few and far between and very well publicly justified.

This is especially the case with the high profile, powerful and relatively highly paid positions.

If every time the rules that should apply to their construction projects and purchases, new positions and promotions -- not to mention their own pay and benefit packages -- they are successful in getting those rules waived as to themselves, we're also going to be either waiving goodbye to savings or imposing even more of the pain on those least able to bear it.

Much of Americans' anger toward Wall Street, the Administration and Congress at this time comes from the perception that the bailouts and stimulus packages are going to Wall Street (and the firms on the verge of paying their executives multi-million-dollar bonuses once again) not Main Street. Support for the housing sector goes to developers, contractors, brokers and those wealthy enough to consider buying a new home -- not those who are being forced out of their homes through foreclosure. There are no meaningful government job programs of the kind we had in the 1930s.

The same reactions can be fueled by the way we handle this statewide budget crisis if we're not careful. Giving $61 million to the hosptial, $47 million to the Athletic Department, and an additional $46,000 to a state employee already earning $245,000, while asking low paid state employees to accept layoffs, furloughs, and cuts in pay is bad symbolism at best.

Consider the problems currently confronting a neighboring institution, North Dakota State University in Fargo. Monica Davey, "Furor Swirls Over College Chief’s House," New York Times, October 18, 2009, p. A22.

As Ms. Davey reports, it is not going down well with North Dakotans that the construction costs of a new home for the University's president and his wife have gone from an already excessive $900,000 budgeted to now over $2 million, or that it turns out his wife is getting $50,000 a year as an "ambassador" for the University.

As the Bismark Tribune has editorialized, it's all “so far outside the values of people of the state [of North Dakota that] it will become a grandiose symbol of excess and arrogance.”

I'm not saying we have precisely that problem, or that the amounts spent on our University president's home are on Iowans' radar at the moment. But I do think we need to guard against actions that the Bismark Tribune characterizes as a "symbol of excess and arrogance" -- not to mention "unfairness."

On a more positive note, Provost Wallace Loh's "first year seminar" program stands as a symbol of what can be done creatively in these times. I have joined some 110 other Iowa faculty members in offering to teach a small section of entering first year undergraduates. It's been a pleasant experience -- at least for me, and my students don't appear to be in rebellion. All of us are volunteers; no one is getting paid for this effort. It costs the University nothing; it costs participating faculty nothing but some additional time; and if it achieves its purpose it will improve the quality of entering students' academic experience at Iowa and hopefully improve our retention rates in the Big Ten. And best of all, it has not -- at least so far -- been accompanied with anyone having to take a pay cut.

There are, of course, those who say this is a terrible idea; that faculty should never agree to teach for free. I disagree. I think these are times in which we all have to be willing to give something -- if not time, then money (and it may very well turn out to be both).

So long as it falls fairly on all, so long as there is not the perception, as in George Orwell's Animal Farm, that "all animals are equal, but some animals are more equal than others," I'm willing to do my share and I suspect others are as well.

But it's fragile. Once we start showing favoritism to the most highly paid and powerful, once the pain is not appropriately shared, a communitarian spirit of cooperation can disappear like the morning mist.

It is only foolish consistency that comes with hobgoblins.
* 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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1 comment:

Anonymous said...

Who is pulling the wool over Downer's eyes? He should actually walk among the common people out there.

UIHC administration decided to spend 60 million (prolly more) top install a new buggy pathetic software system. It takes 18 click to write a prescription, which is often wrong.

The system -- EPIC -- was abandoned in a Calif hospital when after 160 million, the system determined it would take ONE BILLION to make it work.

This system has been determined to increase morbidity and mortality, while adding huge costs.

Any other story is denial...and it is criminal that leadership and the press do not tell the honest truth on this one.