Tough budget forces hard choices on UW

Reactions to Gov. Chris Gregoire’s 2009-2011 budget suggest she has made some good choices on an exceedingly tough problem. The pain must be widely spread if so many have found something to hate. The one bit of good news for businesses: no more taxes.

Now it’s Mark Emmert’s turn to take on this thankless task. As president of the University of Washington, he’s in charge of one of the largest growth engines in the state’s economy.

Gregoire has proposed that UW cut its budget by 13 percent for the next biennium. That’s on top of a 4.25 percent cut for the current academic year. The proposed reductions amount to $116 million from 2009-2011, in addition to $17 million already trimmed, Emmert said during a recent visit to the Puget Sound Business Journal.

In the context of the UW’s $3.4 billion overall annual spending plan, those dollar amounts may sound modest. But consider that all of this comes from the UW’s general fund support of approximately $400 million a year.

The university notes that state investment in higher education earns a considerable return. For every dollar the state spends on the university, the UW obtains nearly $3 in support from federal and private sources. Degrees also bring more income. Every 1 percent increase in bachelor’s degrees among workers here generates $1.4 billion for the state economy.

In addition, state support helps the UW attract top researchers, who not only add to the UW’s standing as an institution, but also bring in more than $1 billion in research funds each year. A researcher acts like a small business, setting up a program, obtaining outside funding and hiring a staff. In times like these, researchers are as vulnerable to poaching as free-agent pro athletes, Emmert says. “They can take their small business and move elsewhere,” he says.

Yet the UW must deal with the state’s declining revenue. Among Emmert’s possible actions:

– Raising tuition. Tuition increases are capped at 7 percent a year currently. But Emmert points out that, at $6,385 a year, UW is the least expensive among peer “global challenge” state schools, including Rutgers ($10,495), University of Massachusetts Amherst ($9,924) and UCLA ($7,038). Emmert said the university may consider a larger increase, but would still provide enough financial aid so students wouldn’t be excluded based on need.

– Cutting costs. In the jargon, these “horizontal” cuts would trim salaries and expenses across the board in departments. The UW already has mostly frozen hiring, leaving more than 50 faculty positions vacant, not including staff. Other steps the administration is taking: moving some positions into self-funded programs, supported by grants; curbing operations; cutting travel budgets; deferring expenses and slowing expansion of programs. It could include cutting the jobs or pay of teaching assistants and lecturers, even though they are the most economical teachers. The UW is trying to avoid that.

– Cutting programs. These “vertical” cuts might eliminate whole programs or departments. This could include tenured faculty, although the UW is not looking at that now. Cutting tenured professors would be an “absolutely last resort,” Emmert said. “It’s very, very unlikely. But we don’t know what March is going to bring.” If the next revenue forecast tanks, and the legislative budget mandates a 25 percent cut, “we can’t take anything off the table.”

Wisely, Emmert wants to have some flexibility to make counteroffers if other universities come poaching his faculty. And he says building — including rebuilding Husky Stadium — makes sense, even though it sounds crazy at a time when programs may be on the cutting block. The stadium is not on Emmert’s top 10 list for capital projects. Those are all academic buildings. But with the stadium, “I can put 5,000 to 7,000 people to work right now,” he said, and use debt to pay later. It’s a good time to build. Construction prices are low and “the price of money is fabulous,” Emmert said. “If we know we’re going to need residence halls, let’s build them now.”

Let’s hope the Legislature will hold the line at Gregoire’s 13 percent, and keep the state’s higher-education engine humming.