Are Florida’s Universities Spending Stimulus Money Wisely?

Administrators at some of Florida’s universities are claiming they cannot use stimulus money to prevent layoffs of faculty. Although the federal government is providing $159 million to Florida’s universities to “save and create jobs,” it is now in question whether all universities will actually use the money for this purpose.

Some administrators claim that since stimulus dollars are temporary (non-recurring) funds, they cannot use them to prevent layoffs; they assert that they should use the money to facilitate layoffs. Are they right about this?

1. What is the purpose of the stimulus money? The federal legislation providing the money says that it should be used to “save and create jobs” or to reduce tuition costs for students. It is temporary funding to get us through a two-year period while the economy is recovering from recession.  

2. Is it really unwise to use stimulus money to help cover recurring expenses?John Curtis, the director of research for the American Association of University Professors, argues against the ‘overly narrow interpretation’ that stimulus money should not be used to cover recurring expenses during this period:  “The whole point is to get us through a difficult time, and one way to do that is invest in the faculty who provide the education and ideas that can help transform the economy.” 

3. Have universities in other states taken the position that stimulus funds should not be used to prevent layoffs? The Chancellor at the University of Massachusetts, Robert Holub, spoke directly to university employees and assured them that the stimulus money would be used to save their jobs. “The federal government has been very clear that this support is designed to save and create jobs.” Arizona State University president Michael Crow, who faced a threat of a 30% reduction from the Legislature at one point, just announced that he will use the stimulus money to save jobs. We have reached “a calming point,” he said to faculty when he made the announcement.

4. Is it responsible to make cuts now to prevent the possibility of making cuts after two years when the stimulus funds disappear?  University of North Florida president John Delaney, who is the liaison between the Board of Governors and the legislature, had this to say: “My belief is that the state’s budget will grow 8% over the next two years and we will be able to replace the temporary funding.” The stimulus money, which is 8% of the universities’ budget, is $159 million. There are several ways that the $159 million could be raised by the third year: (1) The economy could recover enough to generate that much tax revenue again; (2) The Board of Governors estimates that the tuition increases just authorized by the Legislature, 15% per year for five years, will generate  $70 million per year with each increase  (tens of millions of new dollars added to the base each year, even if the BOG estimates are too optimistic); (3) Changing attitudes in the Legislature, resulting from the groundswell of citizen support for higher education in evidence during the spring session (when 10% cuts were contemplated), suggests that the historical pattern of under-funding is about to change; (4) For the first time in two decades, the Legislature passed a tax-reform measure (on cigarettes) to help raise enough funds generally so that it could keep the pledge not to cut more funds from education when revenue collection is down, and several other measures to increase the tax base were contemplated and will be revisited next year;  and (5) There is a dawning recognition in the business sector that higher education is an engine of economic growth in Florida, which bodes well for the likelihood that higher education will get backing from the business lobby (aligning with citizen support) in future legislative sessions.  In other words, there is more than one way to close the gap left by the disappearance of stimulus dollars by the third year, and there is increasing evidence that the state can muster the political will to do it.  

5. Perhaps the question about responsibility should be asked in a different way: Is it responsible to assume the worst about being able to replace the stimulus money and, as a consequence, to take such damaging steps now as laying off faculty, terminating programs, and making the student/faculty ratio even worse, even though there are so many potential ways to close the gap and to avoid the worst-case scenario? Is it responsible to send the message to faculty across the nation that Florida universities lay off faculty and close programs based on speculation that the revenue picture will be bad two years hence, when other universities are using available money to get through this difficult period without laying people off and without damaging programs? Why would prospective faculty choose a Florida university at which to launch or develop their careers? Why would students and parents choose a university that abruptly and needlessly closes programs, limits courses of study, and increases class sizes beyond a point that is already the worst in the country -- offering only the excuse that we might have to do the same thing in two years if we don’t do it now? 

It is unwise to refuse to cover recurring expenses with stimulus money based on a gloom-and-doom prediction of what might happen in two years. It is not necessary, and it is not in keeping with what is happening in the rest of the nation.  But the damage done by taking this path is certain and irreversible. Universities should use the federal stimulus funds as intended: to create and save jobs, not to accommodate dubious or self-fulfilling assumptions of worsening state funding.

Tom Auxter

President

United Faculty of Florida