FY2020 ENACTED BUDGET
UNIVERSITY

1



Univ. of AK UGF spending/student is among highest in U.S.
o $16,391/student in AK v. $7,642 U.S. average



UAF UGF spending is even higher: $30,000+/student



In 2016, Legislature advised Regents to
o “develop a plan for consolidation”
o “increase self-supporting revenue and achieve a balanced,
sustainable budget”



In 2017, Moody’s downgraded University for over-reliance on state
funding



University has extensive duplicative programs:
o 2 engineering schools
o 2 business/management schools
o multiple schools of arts and sciences
o multiple schools of education and teaching



More than 50% of university staff are administrative or support in nature



University has extensive and redundant high paid executive staff



The governor and legislature both separated the community campus
appropriation from the university appropriation. The governor and
legislature intended to hold the community campuses, including UAS,
harmless.
o There is a question whether the University is seeking to protect the
costly and duplicative university programs by extending furloughs
and cuts to the community campuses



The University needs to consolidate university programs, and eliminate
duplicative bureaucracy. Alaska can’t wait any longer. The time is now.



The University’s current retention and graduation rates are poor.
o University needs to focus its efforts on developing core high quality
programs.

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 FY2020 ENACTED BUDGET
UNIVERSITY
Background:
In FY 2019, the University received an unrestricted general fund (UGF)
appropriation of $327million. It allocated this appropriation amongst its three
core services as follows:

As summarized in the table, the University has access to non-UGF funding
sources in the form of federal funds, tuition (DGF), fees and receipts
(DGF/Other), and donations. The University also has reserve funds and an
endowment.
The University is and has been heavily dependent on state funding, far more
than its peers, and far more than what is needed to account for the higher cost
of living and expenses in Alaska. The University reports 17,555 full-time
equivalent students.
o FY19 UGF per-student funding:
o FY19 total per-student funding:

$18,629
$50,615

The state provides more than double the per-student funding, as compared to
lower-48 state funded universities.
State spending on universities:
U.S.--$7,642/student

Alaska--$16,391/student

In terms of percentage of total funding, the University ranks among the highest
in state dependence among land grant universities:
Source: State Higher Education Executive Officers

2

Source: State Higher Education Executive Officers

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UNIVERSITY

Source: National Center for Education Statistics, IPEDS database

This over-reliance on state funding has led to downgrades of the University’s
credit by Moody’s:

“The downgrade to A1 reflects the university’s material reliance on the State of
Alaska with the resulting exposure to the fiscal and economic challenges of the
state caused by low oil prices. With about half of UA’s operating budget,
including on-behalf payments for pension and other post-retirement benefits,
derived from state funding, we expect increased operating pressure at the
university as the state addresses its significant structural imbalance.” Moody’s
Rating Action, 8/21/2017. (Source: https://www.moodys.com/creditratings/University-of-Alaska-AK-credit-rating-600027065)
The primary cost-driver issue for the University has been the decision to build
and staff two separately accredited full-service universities in the state

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UNIVERSITY
(Anchorage and Fairbanks).1 Compounding this issue is the fact that the
University has sustained a substantial loss of students (19% reduction since
2012), particularly in Fairbanks.
Data supplied by the University shows that UAF costs more than three times
what UAA costs on a per student basis. Additionally, UAF (excluding the
research unit) costs more than UAA in total dollars, even though UAF has less
than half of the students that UAA has.

Note, the Alaska Constitution plainly establishes only one university.
Alaska Const., art. 7, sec. 2. Moreover, the Constitution is silent with respect
to any requirement to fund the university. The minutes of the Constitutional
Convention in 1955-1956 likewise reflect no discussion on the matter. To the
contrary, the minutes reflect the need for the Governor to manage the budget:
“…actually our present government is a very fine example of what can happen
when a governor does not have any supervision over departments. I don't
believe our present governor, if he sees a certain department of government
that is wasting public funds, that is hiring a great deal of personnel that it does
not need, he has no authority to go and say to the head of that department,
‘Now look, you had better reorganize this thing and operate it more efficiently.’
That is what we want the governor of the state to do, to be responsible for
seeing to it that each department runs as efficiently and economically as
possible, as well as carry out the laws.”
1

Minutes of the Constitutional Convention, p. 2037, January 13, 1956
(Katherine Nordale).

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 FY2020 ENACTED BUDGET
UNIVERSITY
UA: FY2018 Revenue, Expenditures, and Enrollment
GF

(1)

Tuition/Fees

(1)

Fed (1)

Local

Revenue (2)

Tuition/
Revenue Expenditures

(1)(2)

FTE

(3)

Exp/FTE

GF/FTE

UAA
UAA Main Campus
Kenai
Kodiak
MatSu
Prince William Sound

$93,834,216
$6,462,088
$2,365,837
$4,714,153
$2,569,986

$65,627,300 $17,840,580
$177,302,096
$5,819,520
$16,588
$12,298,196
$1,284,860
$44,967 $60,000
$3,755,664
$5,144,307
$0
$9,858,460
$673,647
$169,851 $820,000
$4,233,484

37.0%
47.3%
34.2%
52.2%
15.9%

$207,592,837
$13,579,810
$4,276,418
$9,847,724
$4,707,454

8,622
952
247
837
214

$24,077 $10,883.11
$14,265
$17,313
$11,766
$21,997

$34,255,087 $11,625,947
$371,263 $1,471,426
$55,593
$57,593
$582,695
$914,727
$777,774
$142,306
$330,563
$80,942
$1,099,764
$216,701
$4,900,128
$111,032

$161,213,243
$3,099,298
$962,029
$2,932,922
$3,589,957
$1,703,503
$5,146,251
$9,887,417

21.2%
12.0%
5.8%
19.9%
21.7%
19.4%
21.4%
49.6%

$214,576,488
$3,640,750
$1,030,369
$3,884,572
$4,441,158
$1,866,640
$5,944,869
$10,899,084

3,616
92
39
122
173
64
233
909

$59,341 $31,894.97
$39,573
$26,420
$31,841
$25,671
$29,166
$25,514
$11,990

$28,761,053
$4,249,866
$5,614,576
$67,331,622
14.8%

25.3%
32.7%
38.8%
36.6%

$33,787,855
920
$4,830,973
213
$6,215,538
303
$75,165,359 4,398
12.9% 25.1%

$36,726 $21,137.84
$22,681
$20,513
$17,091 $8,434.36

$0 $367,276,392
0.0%
80.8%

29.2%

UAF
UAF Main Campus $115,332,209
Bristol Bay
$1,256,609
Chukchi
$848,844
Interior
$1,435,500
Kuskokwim
$2,669,877
Northwest
$1,291,997
Rural
$3,829,786
UAF Comm & Tech
$4,876,257
UAS
UAS Main Campus
Ketchikan
Sitka
Community Campus Total
Community Campus % of Total

$19,446,816
$2,167,000
$2,606,400
$37,094,334
13.1%

University Campus Total $228,613,241
University Campus % of Total
80.5%
Statewide Services $18,117,284
UA Total $283,824,859

$7,280,114
$1,391,624
$2,180,631
$24,612,368
18.4%

$2,034,123
$691,242
$827,545
$4,744,920 $880,000
13.1%
100.0%

$107,162,501 $31,500,650
80.1%
86.9%

$2,076,483
$0
$0 $20,193,767
$133,851,353 $36,245,570 $880,000 $454,801,781

29.4%

$455,957,180 13,158 $34,652 $17,374.47
78.1% 74.9%
$52,856,630
$1,031.97
$583,979,169 17,556 $33,264 $16,166.83

By standing up duplicate programs at UAF and UAA (engineering, business
management, arts and sciences, education), the University has created a
situation where UAF and UAA appear to be competing for the same students.
However, UAF has been unable to attract sufficient students to offset its high
cost. By any standard, with only 3,600 students, UAF is a small college.
Data provided by the University also shows it has very high administrative staff
costs. Only about 10% of its staff are full professors. Well over 50% of its
payroll consists of administrative and campus support staff. With the
duplication of academic programs, the University has had to duplicate
administrative staff as well. It reports over 130 high-paid executive
management staff, including the president and dozens of chancellors, provosts,
deans, and directors, with average salary and benefits exceeding $175,000 per
year.
University data confirms that the community campuses are far more cost
effective than the University campuses. As shown in the table above, the
average per-student UGF funding is $8,434 for the community campuses v.
$17,374 for the University campuses. Since the University has a high
percentage of students needing remedial tutoring (note, the University has no
admission standards), the community campuses are a cost-effective way to
provide this instruction.

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 FY2020 ENACTED BUDGET
UNIVERSITY

Budget:
In the Governor’s amended budget introduced on February 13, 2019, the
administration proposed a reduction of $134 million UGF. While this
represented a 41% reduction of UGF, the reduction is much smaller in
percentage terms when considered in light of the University’s other funding
sources. The Legislature enacted a budget with a reduction of $5 million UGF.
Governor Dunleavy proposed to split the University’s budget into two separate
appropriations: (1) a university appropriation, and (2) a community campus
appropriation. The Governor also proposed increasing the funding for the
community campuses and decreasing the funding for the university campuses.
The Legislature accepted Governor Dunleavy’s recommendation to split the
university’s funding into two appropriations.
The line item veto announced this week is [$130.25mm]. When added to the
$5million-legislative reduction, this amounts to a total reduction of
[$135.25mm] from the FY2019 management plan. This line-item veto impacts
primarily the Anchorage and Fairbanks universities. The funding for all of the
community campuses, including University of Alaska Southeast remains
intact.
The reduced funding equates to approximately $11,000 UGF per student,
which is about 44% higher than the national average. As shown below,
University data reflects that UAA presently costs about $11,000 UGF per
student now. The challenge is to bring the rest of the university, primarily UAF,
into that cost structure.

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UNIVERSITY

The University has some discretion on how to allocate the reduction. The
following proposed approach reduces somewhat the impact to students. This is
merely one scenario:
FY 2020 UGF Allocation Scenario
 Student Instruction
o University: $134.6 million
(reduction of $68.4 million)
o Community Campus: $57.2 million (no reduction)
 Research: $0 million
(reduction of $37.1million)
 Public Service: $0 million
(reduction of 29.7million)
Under this scenario, the reduction would be borne by the two university
campuses (UAF and UAA), the research unit and the public service function.
With respect to UAF and UAA, there is substantial duplication of programs,
with multiple schools of engineering, business management, education, and
arts and sciences in different locations. There appears to be consensus on the
need for consolidation of these programs. The Legislature included the
following intent language in the budget: “It is the intent of the Legislature that
the Board of Regents consider a plan to transition the University of Alaska from
three separately accredited academic institutions into a single accredited
institution with multiple community campuses, and that the Board of Regents

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 FY2020 ENACTED BUDGET
UNIVERSITY
provide a[n] update to the Legislature on the development of such a plan by
December 1, 2019.”
The University has an opportunity to consolidate duplicative programs into one
location, but not necessarily the same location. While the University has
consistently claimed that the Governor’s proposed budget would require it to
close an entire campus, that is not at all clear. For instance, the University
could consolidate its two engineering schools into one school in Fairbanks. It
could consolidate its arts and sciences programs into one school in Anchorage.
It could consolidate its business management programs into one school in
Anchorage. And so on. Location disruption for students can be mitigated by
live-streaming classes. Moreover, just as the University was able to immediately
consolidate its UAF and UAA education schools upon the failure of the UAA
accreditation, there are similar opportunities for immediate consolidation—
precisely because of the current extensive duplication of programs and schools
in Anchorage and Fairbanks. With the consolidation of programs, also comes
the opportunity to close or sell buildings, particularly ones that have an
extensive deferred maintenance backlog.
Next under this scenario, $37.1 million in UGF funds are eliminated from the
Research core service. This function is currently primarily funded with federal
funds ($74.3 million in FY 2019 management plan). Federal funding can
continue at this level, and potentially increase--the University is justifiably
proud of its ability to attract federal funds; there may be opportunities to
increase this funding. Other land grant universities have had substantial
success in building out their research functions almost entirely without state
funds (Michigan State, for example).
Also, under this scenario, $29.7 million in UGF funds are eliminated from the
Public Service function. This function consists of publications, cooperative
extension and small business assistance. All of these functions can be
supported through fees and receipts.
Finally, the community campuses experience no UGF reduction. The
Legislature fully funded the community campuses, and the Governor has not
vetoed this line-item. This includes the entirety of UAS. As noted above, the
community campuses are much more cost-effective, and there are
opportunities here to leverage the community campuses in a cost-effective
manner to provide remedial instruction. There is also an opportunity to
consider reducing the tuition at community campuses, at the same time as
launching a targeted marketing campaign to high school students to increase
enrollment.

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 FY2020 ENACTED BUDGET
UNIVERSITY
Staffing:


More than 50% of university staff are administrative or support in
nature:



University has extensive redundant high paid executive staff:

JOB_TITLE
President
Chancellor
Chancellor
Vice President
Provost
Provost
Chancellor

9

Total Sal + Ben
$416,325
$384,300
$383,788
$307,440
$285,499
$278,705
$270,040

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 FY2020 ENACTED BUDGET
UNIVERSITY
Associate Dean/Faculty
Vice Chancellor (Admin)
Dean (Academic)
Director (Academic-Faculty)
Dean (Academic)
Director (Academic-Faculty)
Dean (Academic)
Dean (Academic)
Director (Academic)
Dean (Academic)
Dean (Academic)
Dean (Academic)
Vice Chancellor (Admin)
Associate Dean/Faculty
General Counsel
Associate Dean/Faculty
Vice President
Vice Chancellor (Admin)
Director (Admin)
Director (Academic-Faculty)
Director (Academic-Faculty)
Vice Chancellor (Admin)
Director (Academic-Faculty)
Vice Chancellor (Admin)
Dean (Academic)
Director (Academic-Faculty)
Dean (Academic)
Director (Academic-Faculty)
Director (Academic-Faculty)
Provost
Vice Chancellor (Admin)
Director (Admin)
Director (Academic-Faculty)
Associate Dean/Faculty
Associate Vice President
Dean (Academic)
Director (Admin)
Executive Director
Associate Vice President
Associate Vice President
Associate Dean/Faculty
Associate Dean/Faculty
Dean (Academic)
Associate Vice Chancellor
Director (Academic-Faculty)
Director(Admin)

10

$269,967
$266,426
$263,246
$262,606
$262,605
$254,919
$254,791
$253,638
$251,076
$250,954
$249,795
$244,718
$244,679
$239,082
$238,886
$238,208
$236,985
$235,325
$232,630
$231,897
$230,580
$229,299
$226,353
$225,456
$221,535
$216,266
$214,488
$212,018
$211,365
$209,351
$207,706
$207,522
$205,005
$202,142
$198,555
$198,555
$198,555
$196,969
$196,209
$196,149
$195,112
$193,462
$192,902
$192,150
$192,150
$192,150

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 FY2020 ENACTED BUDGET
UNIVERSITY
Vice Chancellor (Admin)
Associate Dean/Faculty
Vice Chancellor (Academic)
Director (Academic-Faculty)
Director (Academic-Faculty)
Associate Vice Chancellor
Associate Vice Chancellor
Associate Vice President
Director (Admin)
Director (Admin)
Dean (Academic)
Associate Vice President
Executive Director
Director (Academic-Faculty)
Director (Academic-Faculty)
Dean (Academic)
Director (Admin)
Associate Vice Chancellor
Director (Academic-Faculty)
Director (Admin)
Director (Admin)
Campus President
Vice Chancellor (Admin)
Director (Academic-Faculty)
Director (Admin)
Vice Chancellor (Admin)
Director (Admin)
Associate Director/Faculty
Director (Academic-Faculty)
Director (Academic-Faculty)
Director (Admin)
Director (Admin)
Director (Academic-Faculty)
Director (Academic)
Director (Academic-Faculty)
Associate Dean/Faculty
Director (Academic-Faculty)
Associate Dean/Faculty
Associate Director/Faculty
Director (Admin)
Associate Dean/Faculty
Director (Admin)
Director (Academic-Faculty)
Executive Director
Associate Dean/Faculty
Director (Academic)

11

$191,404
$189,588
$189,332
$189,260
$188,563
$186,797
$185,873
$185,744
$184,966
$183,183
$181,262
$180,493
$179,346
$179,341
$179,340
$179,010
$178,547
$177,002
$175,957
$175,810
$175,625
$172,952
$172,439
$169,306
$168,988
$167,171
$166,530
$165,770
$165,132
$164,290
$161,278
$160,750
$160,125
$157,691
$153,742
$153,720
$150,450
$146,361
$146,035
$146,034
$143,728
$143,074
$141,390
$141,111
$140,910
$140,398

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 FY2020 ENACTED BUDGET
UNIVERSITY
Vice-Provost
Associate Dean/Faculty
Director (Admin)
Director (Academic-Faculty)
Director (Academic)
Director (Academic-Faculty)
Director (Academic)
Director (Academic)
Director (Admin)
Dean (Admin)
Executive Director
Director (Academic-Faculty)
Executive Officer
Executive Officer
Executive Director
Director (Academic-Faculty)
Executive Director
Director (Academic-Faculty)
Director (Academic)
Director (Academic-Faculty)
Associate Dean/Faculty

12

$139,375
$138,348
$137,604
$134,506
$133,224
$132,747
$131,943
$131,943
$131,811
$131,142
$128,741
$128,100
$127,460
$127,460
$121,944
$121,695
$115,290
$114,506
$108,501
$107,092
$102,723

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 FY2020 ENACTED BUDGET
UNIVERSITY
Outcomes:
Possibly because of the extensive duplication in programs, and the lack of
academic and administrative focus, the University has experienced poor
outcomes. The University has no admission standards, and experiences
extremely poor retention and graduation rates.

University of Alaska - Fairbanks
University of Alaska - Anchorage
University of Alaska - Southeast

1st year retention
75%
71%
64%

Graduation Rates
4 yr
5 yr
6 yr
15.3%
30.5%
39.2%
7.3%
17.3%
24.9%
11.6%
15.7%
19.0%

Source: CollegeResults.Org, 2016 data

University of Alaska - Fairbanks
University of Alaska - Anchorage
University of Alaska - Southeast

2011
30.8%
25.3%
25.8%

6 yr Graduation Rates Over Time
2012
2013
2014
2015
33.2%
37.3%
42.3%
40.6%
25.7%
27.8%
27.6%
26.6%
10.1%
12.2%
13.8%
24.7%

2016
39.2%
24.9%
19.0%

Source: CollegeResults.Org

There is no question that the reduction in state funding will be disruptive.
Nevertheless, with the reduction comes the opportunity to eliminate duplicative
programs and duplicative administration and implement a laser focus on high
quality core programs. The low retention and low graduation rates need to
end—this represents a poor return on the investment of state money. The
administration has committed to working closely with the University on
improving outcomes in the future.

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