Governor Parnell announced in February that the state’s unrestricted general funds are expected to see a decline from $6.9 billion to $4.5 billion due to the reduction in oil revenues. This is a 35 percent reduction in state operating costs, and these numbers have caused a deficit of about $2 billion.
After looking over the proposed budget, the University Budget Subcommittee added an additional $1 million in cuts to the budget, making the total proposed cuts equal to $15.9 million.
Parnell’s budget proposal includes $5.3 million to help cover expenses, such as employee pay raises and buildings that are scheduled to open next year.
What this means for the University of Alaska system is a proposed budget deficit of about $14.9 million for the entire university system, or around $7 million for the three main universities in the system.
UAA Provost Elisha Baker said, “67 percent of the budget is on the academic side of the house. Probably 80 percent or more of that is in salaries. The only way we can save money is not to pay salaries. There is very little for travel, copiers, telephones — all of that money disappeared years ago and we don’t really have that in there. We have in my estimation half the staff needed to run the colleges we have now. So it’s not going to be staff. It’s going to have to come from faculty positions.”
Baker said there are always empty faculty positions. If those positions are not filled the salary is saved, so it may be the university does not hire as many adjunct, term or tenure faculty. This means the money allocated for faculty salaries stays in an account and is not used.
The proposal has not been finalized, which means there may be even further cuts made. The House Finance Committee is currently listening to public testimony regarding the UA budget cuts.
“Our basic concern is why would you want to cut you’re higher education when that’s here to help the state do better,” said Bill Spindle, Vice Chancellor of Administrative Services. “The real role here of higher education is to help the state find ways to increase revenue, to look for innovative ways of doing things.”
Spindle said the recent cuts to K-12 education will also have an impact on the university system. His suggestion is for Alaska to seek endowments for the entire education system. He said the university is producing students who are engineers and students who can write, speak and help solve problems. He said the state is in desperate need for people with these abilities, and he believes cutting funding for these programs will hurt Alaska in the long run.