This commentary is by Eleanor Hagopian of New Haven, a business consultant and entrepreneur. She holds an MBA from Babson College.
The University of Vermont administration is planning deep cuts to faculty and programs.
My background is in business, not in academics, and I’ve been disturbed that the University of Vermont’s public statements and other commentary supportive of the administration’s position all seem to be operating on the basis of an assertion that there is a financial crisis and a deficit. Because there is a fiscal crisis, the argument goes, austerity is necessary.
Yet the specifics of the cuts proposed in the name of austerity are baffling, as they appear to be anything but fiscally prudent.
Take, for instance, the proposed cuts to the College of Arts and Sciences. These are not the only proposed cuts, but they provide a clear example of an incorrect narrative on the part of the administration.
For the past five years, despite a hiring freeze that has strained the capacity of many departments, the College of Arts and Sciences has served as UVM’s “cash cow,” bringing the university far more in net tuition revenues than it is permitted by internal budgeting to keep to fund its departments.
Over the course of five years, from 2016 to 2020, the College of Arts and Sciences contributed $88 million (44%) to a subvention fund. The purpose of the subvention fund is to subsidize less profitable parts of the university from more profitable parts. The College of Arts and Sciences received only $54 million (or 27%) from the subvention fund over this time period.
Put more simply, the College of Arts and Sciences subsidized the rest of the university to the tune of $34 million over five years.
Yet the administration claims that the College of Arts and Sciences has a “structural budget deficit” of $8.6 million. This wording implies that the college is a financial drain, when in fact it is a net contributor.
The word “structural” is probably meant to make one think of something like structural unemployment, which implies a fundamental mismatch between spending and funding. What it actually means is that the budget deficit is caused by the structure of the administration’s choices; the administration has chosen not to provide sufficient funds for the College of Arts and Sciences to cover its costs.
Let’s be clear: The proposed cuts are not simply a restructuring. They are a wholesale slashing of the liberal arts. Proposed cuts include the closure of three entire departments, Classics, Geolog, and Religion; the cancellation of 27 majors, minors and graduate programs; and downsizing of language and fine arts programs.
Moreover, the targeted programs are said not to be serving very many students because they are “low enrollment” when in fact they are “low in majors.” This description is either disingenuous or, worryingly, reflects a lack of understanding of the nature of, and demand for, the programs that the administration proposes eliminating or consolidating, particularly since the majority of the courses offered in these departments and programs are well enrolled.
There is no lack of demand. Absent fixed overheads, cutting high-margin products, at any volume, is generally not a good business move.
It is also not clear that there is a fiscal crisis at all. Vice President Richard Cate reported at the May 2020 meeting of the Faculty Senate Financial and Physical Planning Committee that UVM’s $34 million reserve (“rainy day”) fund was untapped. President Suresh Garimella stated in his letter accompanying UVM’s 2020 Financial Report that “[T]he state of UVM’s finances is sound,” with “an increase of $24 million in the university’s position.” (Page 5 of the PDF.)
All arguments derived from “times are tough and so tough choices must be made” are therefore spurious. There is no burning platform, and certainly no reason to rush through drastic cuts.
Having said that, because current finances are sound does not mean there are not storm clouds on the horizon. Tertiary education tuition costs have been rising at unsustainable levels nationwide, and Vermont is no exception. President Garimella’s recently announced continuation of the tuition freeze is laudable, and realistic in the wake of Covid-19 when other institutions are also freezing tuition.
It is also true that UVM cannot rely on the Vermont Legislature for its funding; only 7% of revenues come from the Legislature while 51% come from student fees.
Under these circumstances, most reasonable people would agree that fiscal prudence would be wise. Gutting a cash cow is counterproductive to the notion of fiscal prudence.
One is compelled to ask why, out of all the areas where the administration could choose to constrain funding, it is choosing its core product: education. What expenses are being preserved at the expense of teaching? What does the administration prioritize spending money on, if not the people who provide the service to students, when tuition comprises the bulk of revenue? This is the question that everyone should be asking.
The outpouring of concern for the future of the University of Vermont, as well as for affected individuals, has been remarkable. UVM is of tremendous importance to Vermont as an employer, an educator of our future generations, our cultural heritage, and a key Burlington role player. Its future is important to all of us.
I sincerely hope that the board of trustees will approach these proposed cuts with the care and oversight which is their duty.
