The Six Million Dollar Surplus 

posted July 29, 2019

Dr. Julia M. Wright, DFA President, 2019-20

I started reading more on the DFA website in the early 2010s when I chaired my Faculty’s working group on Finances. Those materials, along with other readings and various consultations for our working group, led to my understanding of spending at Dalhousie as “buckets and troughs”:  all resources go into buckets; resources then get poured into different troughs, until they’re more or less full. If one starts to run low, skim some from the other troughs. Pouring slop from a bucket is never a finely tuned calculation. It’s a metaphor, of course, but one I’ve found useful because it grasps the lack of detail in the information we get. It’s hard to know why, for instance, every year there are tuition increases but cuts to Faculty budgets (the so-called BAC Cuts, named for the Budget Advisory Committee)—and every year the university ends with a surplus.

This year, there was $6 million left in the buckets—enough to erase the .5% cut to Faculties in the 2019-20 Budget and reduce tuition increases. (They’re not, of course.) It is the annual BAC Cuts that make faculty renewal more difficult, driving our continuing reliance on precarious and under-resourced LTAs as well as less easily tracked forms of workload creep for everyone (larger class sizes, more committee obligations, fewer unit-level staff, less resources for research). And, of course, there’s the scrambling for ERBA, the Enrolment Related Budget Allocation. It’s the only regular BAC mechanism by which a Faculty budget allocation can increase and it basically works like this: if you manage to teach more students after your budget is cut then you will get a bit more money the following year that will offset that next year’s cut. Both ERBA and the BAC Cut normalize Faculties doing more with less.

The DFA has noted repeatedly in recent years that academic spending as a portion of the university’s overall budget has declined significantly. Here’s the April 2018 Review of Dalhousie Finances:

In 2016-17, the proportion of the total operating budget spent on the Academic Responsibility Centre was approximately 9% less than in 2002-03. In 2002-03, Dalhousie used just under 74% of operating funds for the Academic category. In concrete terms, this means that Dalhousie would have had an additional $43.2 million to spend on the University’s core mission if the percentage had remained the same in 2016-17 as it was in 2002-03. (p. 2)

It’s easy to see how big a difference that might have made in supporting faculty renewal, reducing tuition fees, and even addressing uncompetitive salaries at Dalhousie and pay equity across all ranks and groups. And there’s more: “Over the past 15 years, nearly half a billion dollars has been diverted from every funding envelope into the Capital fund, and more than $215 million flowed from operating budgets to acquire capital assets” (p. 2). (See the DFA’s last BAC Submission on restoring funding to the academic mission now that the building boom is starting to wind down.)

The budget and collegial governance used to be a lot more tightly linked than they are now, as my last President’s Message briefly noted. Senate even used to have the power to gather information and make recommendations on university budgets, while duly recognizing that budgets were finally in the hands of the Board of Governors. Here’s a taste of the sort of discussion that used to happen at Senate about these budgets:

Mr. Bradfield asked if interest on the capital debt is charged against the operation fund. Mr. Mason stated that interest on the operating accounts is charged to the operating account, but that interest on the capital fund [is] only charged to that fund during the construction phase. He stated that he did not believe it was possible to charge the interest on unfunded capital to the capital account. (Minutes, January 1987, p.5)

Later that month, “The entire meeting was devoted to the presentation and consideration of the 1987/88 Budget Book Summary and related matters” (p. 12).

There are a lot of interesting passages in these Minutes, some very familiar (especially those on fiscal concerns in the face of provincial funding shortfalls), and others less so: “The President . . . reported an intention to cut back in the President's Office” and “reviewed the cost of maintenance, repairs and furnishings” of the President’s house (p. 15). Imagine! In our own period of austerity and annual BAC cuts to Faculties, the President’s Office budget allocation increased dramatically, from $2,998k in 2009-10 (p. 10) to $4,200k in 2015-16 (also p. 10). That’s a 40% increase over six years.

Here’s what we used to have. In the 1983 Senate Constitution, the Senate Financial Planning Committee’s tasks were detailed and included the following: “monitor and report on the financial aspects of the development, administration and expenditure of the university’s annual budget, making policy recommendations where appropriate”; “respond to such specific requests for financial information, analysis and reports as it may from time to time receive from the Academic Planning Committee” (p. 7). As late as last decade, there was a Senate Academic Priorities and Budget Committee (in place from 1996) that was to “act as a principal advisor to Senate . . . in the conduct of academic, and financial planning,” as well as “be involved in the preparation of the annual budget so that it reflects the University’s academic priorities” (Constitutional Provisions Governing the Operation of Senate [January 2005]: 27). The BAC has been around since 1992, so it isn’t that BAC replaced the Senate committee. It’s just gone.

Now, instead of Senate scrutiny leading to even the president being accountable for his spending, we have surveys and town halls in which urgent calls for help cannot be effectively heard and few of us have enough information to effectively analyze what we are being told. We don’t even know the basis for that cool-million-dollar price tag for facilities in the 2019-20 budget (p. 14). What items were costed, and for how much, to lead to that oh-so-very-round figure? Will fifty small fixes yield more benefit to the academic mission than three expensive fixes? Who is doing that analysis, and on what principles? If there’s money left over, where does it go? This isn’t pocket change—a tenth of this amount could make a significant difference to an academic program struggling to maintain its course offerings because of unreplaced retirees.

Skimming the same percentage from all Faculties every year and slopping six- and seven-figure sums at vague, campus-wide projects don’t generate much confidence in evidence-based decision-making. Nor do they allow meaningful discussion about academic priorities and university spending overall, or even a basic risk-benefit analysis to know when, and where, a further small cut may be so damaging that it isn’t worth the short-term savings.

In the common phrase, budgets are about priorities. At a public university, shouldn’t evidence-based, transparent, and accountable budgets dedicated to the academic mission be the priority?

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