The UNM Lobos Sing the Budget Blues

There have been happier times at the University of New Mexico. Packed into the Student Union Ballroom, hundreds of people heard UNM’s three top administrative officials September 22 outline the increasingly negative financial outlook for New Mexico’s flagship institution of higher learning.

Prompting an informal town hall meeting UNM President Robert Frank likened to a “crisis drill” was the recent notice of pending five percent budget cuts to state institutions by the administration of New Mexico Governor Susana Martinez.
In the fall of 2016, the Santa Fe budget axe swings big even as longer-range financial challenges confront UNM due to statewide population loss, lagging economic growth, declining numbers of students of traditional college age, and lawmakers grasping tight purse strings.

Standing below a Power Point that showed New Mexico’s mammoth state budget deficit climbing towards the billion dollar mark by next fiscal year, UNM Executive Vice-President David Harris spoke about the need for contingency planning by university departments in light of a possible $14.2 million budget cut to UNM’s main Albuquerque campus and $22.2 million system-wide in the current fiscal year alone.

President Frank  elaborated on the bind the university finds itself in as it enters the fourth month of the fiscal year, with lawmakers having conversations “behind closed doors” regarding possible cuts- without the participation of the UNM community. “We don’t know what is going on,” Frank said. “They’re going to take it out of a budget we’re already in.”

In a readjustment to a new budget reality, UNM announced this week it was freezing temporary and permanent staff hiring for at least the next six months . Under the new policy, waivers will be considered as long as they are “mission critical positions” for which “no restructuring opportunities” exist. In a memo, Frank wrote that he expected faculty hiring would be “significantly curtailed.”

However, Frank said Thursday he hoped to avoid outright job cuts. “Our goal is to do this without lay-offs…our goal is save our workforce,” Frank insisted. But UNM’s president was careful to stress that the specific, short-term cuts discussed September 22 do not affect projects funded by external sources like grants or the Health Sciences Center, which has other issues and considerations.

(UPDATE: Later the same day this article was sent to FNS subscribers, it was announced that Frank was leaving his job as the president of UNM at the end of the academic year. The news that Frank would then assume a $350,000 annually paying job with UNM’s Health Sciences Center quickly drew sharp criticism from broad sectors of the university and the public.)

Slashes to UNM and other higher education institutions in New Mexico are bound up with decreasing state revenues which have historically relied on oil and gas resources.  As the price of fossil fuels has plummeted, so have state revenues.
In many ways, New Mexico is getting a taste of what her neighbor to the south, Mexico, is digesting at the moment. The Pena Nieto administration rolled out  budget cuts approximating $12 billion earlier this month because of lagging revenue, blamed in large measure on the dive  in international oil prices. Although Mexico has made some strides in diversifying sources of government revenue in recent years, oil still figures as an essential ingredient in baking the budget pie.

While cuts will have to be approved by the Mexican Congress, the Pena Nieto administration has targeted education, the National Institute of Statistics, Geography and Informatics (Mexico’s census bureau), the National Science and Technology Council, tourism promotion, healthcare, the Office of the Federal Attorney General, and even the armed forces for cuts, according to Mexican press reports.

At UNM’s town hall, Frank and UNM Provost Chaouki Abdallah explored a budget scenario that’s been gloomy ever since the Great Recession of 2008, netting trimmed-back operations and difficulties in hiring faculty. “We’ve scraped and scraped,” Frank said. “I believe we’ve stretched so far it’s impossible to stretch farther.”

Until two years ago, UNM was at least able to replace retiring or resigning faculty headed to “greener pastures,” but its ability to do so is now “shrinking,” Abdallah  said. “This year we will actually be losing faculty,” the UNM administrator declared. Accordingly, Abdallah said he instructed college deans about a month ago to reduce their hiring plans by half.

Frank defined UNM’s financial predicament as “unsustainable,” necessitating not only plans to cope with the mid-year emergency but also long-term strategies that will rethink the university’s mission and how best to achieve it.
Placing his university’s present and future in a bigger context, Abdallah said UNM is far from alone in grappling with funding and spending, with even bigger institutions like UC Berkeley and the University of Wisconsin sharing the same boat. “So our cost is going up, our income and revenues are not,” he summed up. “Everybody in the U.S. today, at least in the public sector, is facing the same situation.”

UNM’S trio of senior administrators fielded questions and comments from the large crowd at the town hall. Most of the audience was older, appearing to reflect faculty and staff. For the most part, students were noticeably absent from the event, even though a dimming financial picture makes yet another tuition and/or fee increase likely next year.

Prior to the town hall, the buzz was that UNM had avoided making budget cuts on the order of New Mexico State University’s precisely by raising tuition and fees for the 2016-17 academic year.  No advance mention of the upcoming September 22 town hall was included in the week’s two print editions of the New Mexico Lobo, UNM’s student newspaper. Nonetheless, the New Mexico Lobo’s online edition posted a September 23 article on the previous day’s town hall. The event was widely publicized beforehand by the UNM administration via e-mail.

In the question/answer comment period, audience members touched on the potential impacts of possible cuts and emerging new university policies. “We will look at all our costs as we are driving them down,” Frank pledged. Eliciting a round of hefty applause, a woman suggested the administration consider temporary five percent cuts for the more than 300 UNM employees who earn above $200,000 per year and the approximately 1000 who enjoy annual salaries of more than $100,000. The woman estimated such salary cuts would save UNM in the neighborhood of $8 million.

“Do you want to volunteer for the (crisis) committee right now?” Frank asked, evoking laughs. On a similar note, Professor Lois Meyer queried whether rigor in streamlining operations would apply to the administration as well. “Everything is on the table. That’s what this process is about. It’s not downward, it’s everywhere,” Frank replied.

Unsurprisingly, labor concerns were vented at the meeting, including a question by a staff member about the U.S. Department of Labor’s 2016 rule changes to the Fair Labor Standards Act that increase the number of employees eligible to receive overtime pay and add more record-keeping requirements. “We don’t like the rule any better than you do…,” Frank answered. “We’ve struggled with it. It’s created havoc across all parts of our enterprise.”

In comments that drew a positive reaction from the audience, a woman who said she worked at the university’s library reminded Frank of the stagnating income of UNM staff during a time when benefits have been reduced and the cost of living is going up. “I’m painfully aware of that reality,” Frank responded. “Nothing breaks my heart more than not being able to raise faculty and staff salaries.”

In response to a suggestion from graduate student Sally Barker that UNM entertain “looking outside the box” in order to diversify revenue sources, Frank and Abdallah assured that such efforts are underway.
Local resident Terri Blake asked Frank about an administration plan first presented last year that proposed moving the university licensed radio station KUNM (full disclosure: the reporter does some volunteer work with KUNM) from its longtime home in Onate Hall to a site next to New Mexico PBS,  formerly known as KNME.

Acknowledging that he had heard previous discussion of a closer association between the two broadcasting entities, Frank said he was not aware of an imminent move. “Given the situation we’re at today, it’s like 50 years away,” he added.
UNM Executive Vice President Harris told FNS after Thursday’s gathering that the budget cut numbers presented at the town hall are based on the assumption that a five percent cut is applied to every agency that gets a state appropriation, but are not a certainty since UNM officials are largely in the dark about what is happening in Santa Fe and among lawmakers, who are not in formal session but reportedly discussing the state’s financial crisis behind the scenes.

“We haven’t heard a thing yet,” Harris said. “I think everything is up in the air…contingency planning is all that we can do.” A special legislative session is expected to convene soon, to address the budget crisis and possibly consider other items like restoring the death penalty.

A testy election-year session could ensue, with Republican Martinez opposed to tax increases and lawmakers, especially Democrats, pushing for more revenues to mend the state budget, which carried over a deficit from last fiscal year in violation of the New Mexico Constitution that mandates balanced state budgets. Harris, who’s served in state government and higher education posts since 1972, told the town hall that New Mexico’s and UNM’s current financial circumstances constitute “an unprecedented situation,” illustrated by Moody’s recent downgrading review of state bonds and the possibility of the same for UNM.

-Kent Paterson

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