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UICbunsisresponse Februry 2010

UICbunsisresponse Februry 2010

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Published by: Matt Muchowski on Mar 08, 2010
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03/07/2010

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Response from Howard Bunsis and Gary Rhoades to comments of University Senates Conferencememo of 2/10/2010We thank the University of Illinois University Senates Conference
for their comments on the “BunsisReport.” This response is offered, as was the original report, in the hopes of stimulating a fuller, more
thorough discussion of the finances and future of the University of Illinois campuses and system, withmore meaningful involvement of faculty in the decision making about the future of the university. Ourparticular interest, as leaders of the national association that established, defined, and advanced theconcept of shared governance, is in promoting meaningful faculty involvement in decision making, tothe benefit of the institution, its students, and the society it serves. Thus, we are pleased that thefaculty senators close their comments by recommending a top to bottom review of the finances of the
university.”
It is precisely that sort of review and analysis that we have called for.Below we speak in detail to the comments of the University Senates Conference, clarifying the basesand thrust of our analysis as well as the data we drew upon. We also reiterate and emphasize the datathat are required for meaningful faculty involvement in decision making, and indeed for thedeliberations among various parties that are key to good decision making.Here we offer three overriding points:
First
, the University Senates Conference
acknowledges that “furloughs are a short
-term effort
designed to help keep the ship afloat by buying time until the State begins to pay its bills.” And at the
end of their first point they acknowledge that one strategy proposed in the Bunsis report, refunding the
furloughs, should be considered. The point is that rather than buying time with faculty and staff’s
monies,
at worst 
the university should be
borrowing
those monies from its faculty and staff, andrepaying them, with interestSo, our report has successfully triggered consideration of an option that previously was not on thetable. We continue to believe that the other options we identified should be pursued first, but at leastthere is agreement on this one option.
Second
, the University Senates Conference suggests that we are posing a roseate view of the situation,because we do not support furloughs. But it is not the AAUP that posed
the short term “solution” of 
furloughs to the short term problem of cash flow; rather, it wasthe university administration, and anadministration that did so even with a 2010 budget that built in continued disproportionate increases inadministrative costs.We quite clearly believe that there are long range patterns that compromise higher education
institutions. We made such points in the statement, “The Failure of Furloughs,” recently sent to UIC
and UIUC faculty by General Secretary Gary Rhoades; there are long term patterns in resourceallocation within universities, as well as to universities (from the state) that are compromising thequality and core missions of our institutions, and we believe these patterns need to be redressed byrebalancing investment, for instance, in educational versus in administrative expenditures. This was acase we also set out last year in a statement on furloughs issued by our Collective Bargaining
Congress’ Executive Committee: 
http://www.aaup.org/AAUP/about/cbc/nogivebackresol.htm Thus, our position has quite clearly been that furloughs are a failure to address the trends that areundermining public higher education.
 
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So we are pleased by and support the call of the Unversity Senates Conference for a top to bottomreview of university expenditures, a review that puts everything on the table; and we appreciate theirrecognition in our report of the significant issue of administrative costs. That is precisely the sort of action we would have hoped our report would trigger.As a friendly amendment to this, we would emphasize, as we discuss below, that what also must be onthe table is the most recent audited financial statement of the university. An open review requires theuniversity to open its books to faculty more fully and in a more timely fashion than has been done thisacademic year.
Third
, the University Senates Conference
indicate that, “This review needs to occur within the context
of shared governance, involving faculty perspectives and a common sense of responsibility for the
institution.”
 Of course.As a point of reference, the AAUP is the association that established, defined, and has advanced sharedgovernance in U.S. higher education. It is the association that is currently working with faculty senatesin various peer institutions of the UI to revise handbooks to explicitly assure the academic freedom of faculty in speech about institutional matters (for obvious reasons, in these hard financial times, but alsobecause of a series of troubling court cases
 — 
see our Speak Up, Speak Out campaign to protect anindependent faculty voice: http://www.aaup.org/AAUP/protectvoice/   So we are quite gratified that faculty groups within the UI are now addressing and seeking to gainmore substantial input into the sort of shared governance deliberations with an independent facultyvoice that the AAUP sees as being essential to the well being of the university, to the benefit of students and society.
Finally, if the University Senates Conference’s reference to shared governance was a veiled reference
to collective bargaining being somehow distinct from or antithetical to such governance, then it isimportant to clarify that the longstanding position of the AAUP has been that collective bargaining canand should be an effective vehicle for strengthening traditional shared governance structures in theuniversity, such as academic senates, to the benefit of students, the institution, and society.Thus, we encourage faculty throughout the UI system to exercise an independent faculty voice,through the mechanisms and structures of their choice, to reshape the future of an extremely importantsystem of public universities.We turn now to addressing in some detail the comments of the University Senates Conference.
 
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Response to University Senates Conference Comments in February 10, 2010 Letter
Comment 1: The UI system may have resources, but these resources can only be used for certainpurposes. In addition, even though there is not a significant decline in the State appropriation, thereal problem is due to cash flows from a delay in the State appropriation.
Resource Allocation Issue: The fungibility of funds
The UI system has over $4 billion in total revenues, and less than $700 million comes from the Stateof Illinois appropriation. Therefore, the state appropriation is only 16.8% of total revenues. This is afact. The claim that certain revenues can only be used for certain purposes is a standard claim thatoverstates the case and misrepresents the fungibility of various funds (as we will later clarify). Thefact is that administrators have access to a wide variety of revenue sources. In fact, it is notuncommon for there to be shifts in and out of various funds. The bottom line is that the UIadministration has the ability to tap into various resources; they simply choose not to.The 45% figure reported in the comments is incorrect. The 2010 budget reports that the Stateappropriation will be 40% of what the budget calls total operating revenues; once again, thisformulation assumes an overly restrictive view of various revenue sources. Although it is obviouslytrue that some monies are designated for some purposes (e.g., a gift designated for a building),
university funds are more diverse and fungible than the faculty senators’ comments suggest.
State Appropriation Issue: Will the monies owed by the state be paid
In addition, point #1 seems to imply that the State appropriation either will not be realized by the UIsystem, or that it will go down significantly. However, the best evidence that the UI system expectsthe State appropriation to be realized is
in the UI system’s own budget documents.
The 2010 budgetis at:(http://www.obfs.uillinois.edu/aboutobfs/documents/2010_BSO_Full.pdf )  This document was reported to the Board on November 12, 2009.
Please note that the University 
senators’ 
response letter cited the 2009 budget, and therefore did not use the most current data
(weoffer are additional remarks about current information and transparency below). And what does thisbudget document report:The 2010 State appropriation is projected in the budget to be exactly flat with 2009 levels.This is critically important. On November 12
th
, the State’s cash flow
problems were certainlyknown and very public. If the UI system administrators believed that the State was NEVERgoing to pay the appropriation, it would not have budgeted 2010 appropriations to be exactlythe same as the 2009 appropriation. If the administrators did not have this belief it wouldhave been imprudent and irresponsible of them to build that into the 2010 budget. The
university senators’ belief 
that the appropriation will be lost forever is contradicted by the UI

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