Higher Education Strategy Associates

Some Consequences of Declining Public Funding

Home truth: while total funding for higher education has increased rather substantially over the past couple of decades, an increasing proportion of this funding has come from private sources.  If anything, that trend is going to continue for the next decade, at least.  Unfortunately, our decision-making structures and mentalities are stuck in the era when institutions could count on governments to bail them out.

I noticed this initially during the St. FX strike.  One of the main lines of discourse from the union has been, essentially, that management’s claim of poverty is evidently untrue because of all the money that’s been made available to “non-essential” projects, like new residences.  This echoes a line that we’ve heard from Quebec students in their protests, as well: stop putting up new buildings and satellite campuses and we wouldn’t need to have higher tuition.

Partly, this is nonsense: budgets for capital and operating aren’t fungible, and not using donors’ and government’s money for a residence doesn’t make money magically available for salaries.  But the sentiment isn’t complete nonsense; when money is scarce, frustration at seeing money spent on non-academic projects is easy to understand.

But when you depend on tuition for more than 50% of your budget, and demographic pressures are reducing demand (as is the case at St. FX), it’s not the faculty who get to decide what’s essential, it’s the students.  It’s not like the old days where you could be pickier about your customers and they paid only a small portion of the bill. Now, if you fail to spend on “nonessentials” like residences, you run the risk that the tuition dollars dry up.  And then who pays for faculty salaries? That’s a reality that faculty unions have to deal with.

Management, too, needs to change, though.  The shift to greater private funding has led to a certain degree of academic entrepreneurialism.  Where administrators are thus able to gain resources, that’s to the good; but what happens when money is lost?  When that new can’t-miss international branch campus on the other side of the world actually does fail, who’s accountable, and how are the lost funds recouped?  Too often, it seems, the answers are “nobody”, and “out of teaching resources”, and that’s not really acceptable.

Shared governance of universities is a lot easier when government’s paying the bill.  When universities have to go out and earn money themselves, it’s a different story.  But it’s a reality we have to deal with.  Faculty need to come to terms with the fact that income is a lot more fragile than it used to be, and administrators need to be held much more accountable for money put at risk.

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2 Responses to Some Consequences of Declining Public Funding

  1. Nick Rowe says:

    Good post (as usual/always).

    One omission (or maybe it just wasn’t clear): students also pay rent for their room in residence, usually (AFAIK) on a full cost recovery basis. This means that building residences is not a net cost to the university that builds them. So even if the money were fungible, and even if students didn’t care whether they got a room in residence or rented off-campus, it still makes no difference. A university can’t save money for faculty salaries by building fewer residences.

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