Politics & Government

June 16, 2013

Kansas higher ed dealing with budget cuts

Kansas universities and colleges are beginning to come to grips with what they are calling “devastating” budget cuts imposed by the state Legislature.

Kansas universities and colleges are beginning to come to grips with what they are calling “devastating” budget cuts imposed by the state Legislature.

Leaders at the University of Kansas, Kansas State University and Wichita State University are warning that the cuts, along with what legislators called a “salary cap,” will damage everything from farming programs to the ability to educate doctors to the ability to help Wichita’s aerospace industries create new jobs. The dean who runs K-State’s Research and Extension Service even wrote last month that the cuts would damage the state’s 4-H programs.

And the big plot twist in this narrative of dispute is that some of strongest criticism of the cuts is coming from some of the state’s better-known conservative budget hawks.

• • • 

Legislators such as Ray Merrick, the Republican speaker of the House, and Marc Rhoades, chairman of the House’s appropriations committee, have said in written public statements that legislators were merely trying to hold universities more accountable when they approved budget cuts.

They chided universities for tuition increases like the 8 percent increase requested by WSU earlier this month. The Board of Regents will vote on that request, and tuition increase requests from all the other Regents universities, this week.

Merrick and Rhoades, in a statement last month, wrote that “ever increasing tuition rates … put a burden on middle class families, even when state funding has remained constant over the last 12 years. The average tuition rate at the six major state universities went up from $1,243 in 2000 to $3,195 in 2012, an increase of 157 percent over 12 years. During the same time period, the U.S. inflation rate rose about 33 percent.

“Historically, Kansas families have borne the brunt of university budgets that continue to increase every year through both higher tuition rates and state taxes,” Merrick wrote. “The House budget plan found savings across all areas of state government, including the Regents, that will ensure our ability to keep the tax burden on Kansas families low.”

Rhoades, in a letter to the editor sent to The Eagle last week, wrote, “We didn’t set out to reduce funding.”

Earlier this year, when KU pushed back and said cuts might force them to reduce medical schools in Wichita and Salina from four-year to two-year programs, Rhoades called it “a classic bully move.”

• • • 

Gov. Sam Brownback, who has pushed income tax cuts to spur growth, has said he will ask the Legislature to restore the education money.

“We can do it and we should do it,” he said during a visit to Wichita on Thursday.

Brownback let stand cuts in higher-education spending in signing the state budget, even though he’d opposed any reduction in state funding and went on a statewide tour in April and May to build opposition to the idea. In a message to legislators, he called on them to work with the state Board of Regents to “craft a shared vision for higher education,” according to the Associated Press.

Susan Wagle of Wichita, the Kansas Senate president, warned that the cuts are “devastating” to some of the state’s finest educational institutions, including WSU. She said it will harm the state’s ability to create jobs if the cuts aren’t restored.

Wagle voted for the budget package that included the cuts. But she said last week that the Senate only agreed to the budget bill as a last resort, when it became apparent that the House was unwilling or unable to pass a budget without a salary cap.

Fred Logan, a Brownback appointee to the Kansas Board of Regents, said last week that the salary cap – on top of the budget cuts – is “one of the worst public policy moves I have seen in recent years.” He called the cap “a nightmare,” “horrible public policy,” and said it will do “irrational harm.”

WSU president John Bardo on Friday refused, as he said, “to be drawn into a political debate.”

“My experience over a lifetime is that any time anyone at a university argues with legislators, the university person always loses. Always,” he said.

“At the end of the day, you go home, and they vote.”

• • • 

New limitations on salaries in the state university system were portrayed as a salary cap in debate in the state Legislature. But because of the way the law is written, the cap actually represents a substantial cut in funding for salaries at the universities.

Unlike most agencies, state funding for the universities’ salaries comes through a block grant to the Board of Regents. It is that grant that was reduced, leaving less money to pay employees.

Although there is an amount designated for salaries in the funding they receive from the state, universities do have the flexibility to shift money from other budget lines to employee pay.

This year, budget negotiators in the Legislature, seeking to cut state funding for universities, took money from those universities that overspent or underspent their salary budget line.

Universities that have shifted funds to pay their employees more than the state budgeted for personnel saw their salary funding cut by the amount of the additional employee pay.

Universities that spent less state money than they were budgeted for salaries, generally due to open positions, in most cases had their salary line reduced to what they actually spent.

The result is that the universities actually all received cuts in their overall funding, due to the calculated reduction of funding for salaries.

The cuts varied widely across the university system, from a minimum of $276,000 at Fort Hays State University to nearly $4 million each for KU and K-State and their affiliated programs. WSU lost $868,125 in the shuffle.

On top of the salary reduction, universities also saw their overall general fund support from the state reduced by an additional 1.5 percent.

• • • 

Bardo said the salary cap may damage WSU’s ability to create jobs and retain professors for the school’s internationally known engineering college, an institution closely entwined with Wichita’s aerospace industry, Wagle has said.

Bardo said the state, years before he arrived as president last year, mandated that WSU change from a “typical regional university” into a research university. That’s much more expensive to operate, in part because to hire scientists and engineers, “you compete with the rest of the world,” Bardo said.

At K-State, the dean of agriculture on May 24 sent his staff a memo about what that salary cap would mean, especially to the Research and Extension Service he also runs. The total amount cut, with the salary cap, is about 11 percent, John Floros wrote.

“It translates into a devastating number of more than 100 staff and faculty positions. A crisis in the making!”

The crisis will damage farmers, water conservation and food systems, which he said is the biggest industry in Kansas. It will damage 4-H clubs, he wrote. It will damage the research that brings in many more dollars than the state invests, he wrote.

The problem, he wrote, “isn’t just about the 11 percent cut or about the $6 million in savings that our Legislature thinks is wasted if it were invested in Research and Extension. It’s important to realize what this loss of investment means to the people of Kansas and the state’s economy.

“For every $1 the state invested in the College of Agriculture and K-State Research and Extension, we competed nationally and internationally to bring an additional $2 to $3 for our activities in the state. For every $1 we spend on Research and Extension today, history suggests that an additional $20 to $40 of long-term economic growth will be created.”

Doug Girod, the vice chancellor of KU’s Medical Center, warned his staff in recent weeks of “devastating” cuts he will need to make. He has said it might impact KU’s ability to produce doctors for Kansas.

“We are anticipating cuts to KU Medical Center of around $8 million over the next two fiscal years,” Girod wrote. “There is much confusion around the term ‘salary cap,’ which the Legislature is using to describe one of the cuts that is most devastating to the medical center.

“Legislators are not using the term to mean they would ‘cap’ individual employee salaries at a certain level; rather, they want to cut our budget by the amount of money we were saving on salaries for unfilled positions when they took a snapshot of our expenses back in April (essentially, this penalizes us for being frugal and planning our finances to anticipate future needs).”

The cuts, Girod wrote, “will come on top of a 13 percent cut to our state funding since 2008 – and federal budget cuts that are adding up to a 10 percent loss of research funding across our institution.”

Andy Tompkins, president and CEO of the Kansas Board of Regents, warned of one other problem this cut and past cuts might create: Some of Kansas’ finest engineers, doctors and university researchers might decide Kansas is not a good place to make a living or earn a reputation in science.

“No doubt, it might tempt some people to leave,” Tompkins said.

Bardo said he worries that the same will happen at WSU.

• • • 

Rhoades declined to be interviewed for this story, but offered written comments, including in a letter to the editor published in The Eagle last week. For this story, he also offered a much longer version of that letter.

And in April, as the Legislature contemplated the cuts, he and Speaker Merrick issued a statement.

Universities, Rhoades said in that statement, “have continually asked for more money from families and state taxpayers every year.” He said he would “like to see more budget accountability from universities.”

“As a former on-campus college instructor who now teaches mostly online, I know the value of higher education,” he wrote. “Just because an institution provides a valuable service to our state does not mean they should avoid being accountable for taxpayer dollars.”

In his letter to the editor, and in the longer version of that letter, Rhoades said all the Legislature really did was impose “a 1.5 percent reduction to Regents which hardly qualifies as a slash, but that’s the narrative being used; and since State Aid represents less than half of their General Use Expenditures, a 1.5 percent reduction in their state aid amounts to a 0.7 percent reduction to that account.

“Compare a 1.5 percent state aid reduction with recent requests from Kansas colleges for increases in tuition up to 8 percent next year, even with inflation below 2 percent.”

Rhoades also wrote that universities are sitting on billions of dollars.

“Universities’ All Funds spending was $1.814 billion in 2005, $2.186 billion in 2008; and $2.421 billion in 2012 – a 33 percent increase in spending even with a recession.

“By the way, the salary cap we requested was not a cut,” he added. “You will hear it referred to as a cut, even though salaries were held level and not reduced.”

• • • 

But Bardo, Logan, Wagle and other critics all said that the salary cap really is a cut.

In the case of WSU, the salary cap, WSU officials said, actually made the 1.5 percent cut more than 3 percent.

The Regents on Thursday said the salary cap by any definition left the state’s schools with $10 million less to work with for next year, on top of the 1.5 percent cut.

And Logan said the cuts fell most heavily – and unfairly – on the state’s research institutions. And those cuts, plus the 1.5 percent cuts, come on top of five straight years of state cuts in higher education, he said.

In fiscal year 2009, the state budgeted $853 million for all higher education schools. But the state cut that in the following years, budgeting $747 million in fiscal year 2010, $756.7 million in 2011 and $743.9 million in 2012.

In 2013 the number increased $20 million, to $763.4 million. But that number did not reflect the actual operating costs, said Regents spokeswoman Mary Jane Stankiewicz, because $19 million of it was earmarked not for operating costs but for special programs.

And while the Legislature was chopping millions out of budgets, Stankiewicz said, the operating costs to keep the lights on and keep health care plans paid were increasing dramatically.

Bardo, meanwhile, said universities are not sitting on a pile of money they can use for any purpose.

“If you find it, would you tell me?” Bardo joked. “Because I would really like it.”

The universities all do have large amounts of money from all the fees, research grants, private company investments and other sources, he said. But the electric bills and salaries that keep a university running come mostly from state money.

The other money, he said, can’t be used – by law – for any purpose he wants.

“If I collect money for parking, I can’t spend it on ice cream,” he said.

Stankiewicz, the Regents’ spokeswoman, said Rhoades’ assertion about the universities’ “billions” wasn’t fair.

“While state funding has decreased over the past years, the universities have aggressively sought and received federal grants, business contracts and private funds that are included in this category,” she wrote in an e-mail. “Therefore, this increase in private and federal funding coming into Kansas should be seen as a positive for our universities and our state.”

Bardo and Andy Schlapp, WSU’s executive director of government relations, said nothing more can be accomplished with complaining. They said they hope to use the months before the next legislative session to meet one on one with legislators from around the state.

Wagle and others have pointed out that the Legislature this year had dozens of new members who had to come to grips with how millions of dollars flow through universities from various sources, controlled by various laws and rules. No one could be expected to understand it all quickly, Bardo said.

“We need to do a better job,” Schlapp said. “We need to bring all these new people together and tell them what we’re doing.”

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