You may not have yet read this Planning for Higher Education article from October 2010, so we've posted it here for you, and added this link to an experimental SCUP beta semantic analysis of the article, by Michael Rudden of DiMella Schaffer. Scroll down past the image to see a few bullets from the analysis.

Enjoy! And please share with campus colleagues. They don't often get to see what's in SCUP's journal. Thanks. 

P.S. Note this related SCUP workshop on July 23, near Washington, DC., Capital Projects in a Campus Environment: Organizing and Running a Successful Project Team.

• A review of ongoing campus facilities planning projects, coupled with a review of more than 30 recent campus master planning requests for proposals and the relevant literature, indicates that colleges and universities are finding innovative ways to do more with less in response to this challenging economic environment.
• By integrating their facilities planning with current strategic, academic, and financial plans-a key tenet of the Society for College and University Planning's publication A Guide to Planning for Change (Norris and Poulton 2008)-these institutions are better positioned to proactively evaluate and respond to economic challenges and turn them into opportunities.
• Integrating education technology planning with academic, financial, and facilities planning enables colleges and universities to explore and evaluate the potential impact of alternative pedagogical and technological approaches to delivering educational content.
• These distressed properties are being acquired by nearby institutions that plan to convert them (in some cases in partnership with developers) into, respectively, a hub for a new research venture, a technology education center, continuing education classrooms, a branch-campus expansion, an administrative office building, and short-term "swing space" with parking during campus renovation.
• These strategies include deferring or downsizing planned construction projects, using existing instructional space more intensively, reducing facilities operating costs by closing facilities, improving campus sustainability, and reducing information technology (IT) expenses.

"Slip-Sliding Away: An Anxious Public Talks About Today's Economy And The American Dream," is a report from Public Agenda which finds that the number one financial concern of economically-stressed Americans who also have children is college affordability. Also high on Americans' priorities, stressed financially or not: Social security and retirement benefits and job training.

If this isn't an indication of high demand for higher education, we don't know what is:

When it comes to what would be "very effective" in helping people become economically secure, the public puts its faith in higher education and job training, along with preserving programs like Social Security and Medicare. These are the top three solutions among both those who are struggling and those who aren't.

"Making higher education more affordable" led the list overall (63 percent) and among those who say they're struggling (65 percent). Preserving Social Security and Medicare was next at 58 percent (62 percent among the struggling) and expanding job-training programs came in third at 54 percent (56 percent for the struggling).

Neither cutting taxes for the middle class (48 percent) nor reducing the federal deficit (40 percent) get majority support, and other options rate even lower. ...

One reason for the faith in education may be the public's perception of who's struggling the most in the current economy. Three-quarters of Americans say that people without college degrees are struggling a lot these days, compared to just half who say college graduates are struggling.

We have seen a considerable flurry of recent reports indicating some serious cutbacks in higher education budgets in some states. According to a new SHEEO/CSEP report that is being released today, states are spending $79B on higher ed in 2011, down only .7% from last year. But those cuts are not evenly spread. Texas, California, and Arizona, for example, are imposing more severe cuts. This is a summary from Inside Higher Ed's Scott Jaschik, who was able to peruse an early copy of the report. Here is a report from The Chronicle of Higher Education's Eric Kelderman. From Jaschik:

Notably, however, there were six states where the percentage losses were in double digits: Missouri (down 13.5 percent); Delaware (12.4 percent); Iowa (12.2 percent); Minnesota (11.7 percent); Arizona (11.6 percent) and Oregon (10.8 percent). Only one state reported a double-digit increase: Wyoming (up 24.7 percent).

While states use different financial procedures to support higher education, the Illinois State-SHEEO study is considered the definitive source on state appropriations, with consistent rules for what is counted (state funds for operating support and student aid) and what's not (funds for building projects and tuition revenue). Federal research grants (a significant budget line for research universities) aren't counted, but the federal stimulus "stabilization" funds -- which were intended to support the operations of public schools and colleges -- are included because they support the same purposes as general state appropriations for higher ed.

"Dean Dad" says you can—maybe—use reserves to fix shortfalls (after some caveats): "The relevant question is whether the shortfall is fleeting or structural. If it’s fleeting, then spend away. If it’s structural, then make the changes that need to be made."

The starter for this blog post is a specific situation at SUNY New Paltz, but that's just the excuse to examine what reserves really are, whether they are useable or not in the first place, and when it might be okay to use them to patch up budgetary shortfalls:

I’ve written before on public college reserves, and how they differ from ‘endowments’ as usually understood. The short version is that endowments are supposed to produce income which can be used for various reasons, but reserves are supposed to be liquid and available either for capital projects (buildings) or short-term budget gaps. Reserves aren’t about generating income, even though it’s nice when they do; they’re there for emergencies and opportunities. Of course, that refers only to general college reserves.

Observation

Like the proverbial deer in the headlights, institutions around the world are coping with reduced funding and often using similar tactics for cost containment and revenue enhancement.

• Publicly supported institutions understand that reduced state budgets will affect them for many years into the future. Thirty-five states are assuming reduced fiscal resources will be available in 2010, while 42 states were forced to reduce their previously enacted 2009 budgets.

• Community colleges have been hit the hardest and been very creative about when they offer courses (all night long) and even who pays for them (anyone who is willing to donate to support a course).

• Space management is becoming a key area of concern, as no one wants the continuing operational costs of new construction. Likewise, energy management is high on everyone’s list.

Our Thoughts

The Higher Education Price Index (HEPI), as well as tuition, continues to outpace the Consumer Price Index (CPI), even though it dropped from 5 percent to 2.3 percent. Some are asking if higher education will be the next ‘bubble’ to burst.

• The highest percentage increase came in administrative salaries at 5.4 percent, up from 5 percent the year before. Virtually all the other components of the index had lower increases this fiscal year than last.

• According to the National Center for Public Policy and Higher Education, over the past 25 years, average college tuition and fees have risen by 440 percent—more than four times the rate of inflation and almost twice the rate of health care costs.

• Tuition and fees at private colleges rose at the lowest rate in 37 years (4.3 percent), but still higher than the CPI, which was 3.8 percent in 2008.

Public Policy is the magazine of the American Association of State Colleges and Universities (AASCU), a frequent collaborator with SCUP.

In Holistic, Positive Retrenchment, Kenneth W. Dobbins, president of Southeast Missouri State University distills some academic program review observations onto a single-page PDF document. He begins:

Most of us are faced with, or will be facing, the daunting task of balancing our budgets with less funding from state government. There are several ways to increase revenue and reduce costs, which seem to be easier than reducing or eliminating academic programs. Examples of these “easier” approaches include: increasing capacity with larger classes; eliminating low enrollment classes; increasing teaching loads; redesigning courses; and adding more temporary or adjunct faculty instead of tenure track. However, the advice in the old saying, “do more or the same with less,” cannot be followed anymore.

With the easier approaches already taken, many of us must critically examine academic programs and ask what are we doing, how are we doing it, and should we be doing it at all. How you do this magic act depends on your campus culture and shared governance expectations, but below are several ideas for your consideration.

"[W]hat used to be a ‘wow’ is now a ‘phew.’ Now it’s a sign of relief that we made it, as opposed to a loud cheer that we vastly exceeded the goal,” said John Lippincott, president of the Council for Advancement and Support of Education (CASE)." In 2007-2008, 22 percent of colleges extended capital fundraising campaigns; in 2008-2009 it was 33 percent. And the future may not look all that rosy, in terms of the effects of the recession affecting such campaigns for some time to come:

It's understandable that this environment will force colleges to work extremely hard just to meet campaign goals, and failing to deliver has real consequences, Flessner said.

“It’s a huge issue,” he said. “You’ll start to see [donors] are much more reluctant to go into a big campaign next time. That can live with you for a decade or more, so it has lots of implications if you don’t do well.”

Must-read: Get it while it's hot.

The Institute for Effective Governance of the American Council of Trustees and Alumni (ACTA) has published a new, 20-page guide for trustees on how to strategically consider cost-cutting measures. Planners need to download and read this free PDF document so they know what it is their boards may be reading and learning from. This is a really a nice, compact overview of many planning issues which interrelate and should be integrated.

BE EMPOWERED. Remember that trustees are fiduciaries. Students, parents, stakeholders, and—for public universities—taxpayers depend on your vigi- lance and firmness. Trustees mustn’t be pressured by the invocation of “board discipline” or “board unity” into voting against their principles or conscience. It is not an act of courage to raise tuition. Trustees should be willing to close or consolidate programs, when appropriate. They should demand approval authority for significant expenditures, insisting on information in the planning stages and in time for rigorous review.

Beware of building and maintenance projects broken into multiple small units, masking large expenditures beneath seemingly routine activity. Think long and hard before entering into a contract—as some boards have—with a search firm that provides liberal expense allowances, and compensation that might approach the first-year salary of the CEO.

Dennis Jones, of NCHEMS, seems to be all over the place. We've seen him recently at a SCUP board meeting, at the second Action Analytics Symposium, at SCUP-45, and now he has this piece in The New England Journal of Higher Education:

In all states, state governments decide how much of their budget goes to direct support of institutions and how much to student financial aid. In some states, elected officials also set (or must approve) tuition levels; in others, tuition policy is within the purview of institutional governing boards. Legislatures also affect institutional finances by mandates regarding the use of institutional resources devoted to student financial aid. In some cases, this takes the form of requiring that institutions waive tuition for certain groups of students (war veterans, families of protective service personnel killed in the line of duty, etc). In other cases, states put limits on the use of tuition waivers.

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Given the lack of attention given to alignment of the pieces, the fact that different policies are often the responsibility of different decision-making groups, and the different constituencies that line up behind different parts of the policy framework, it is little wonder that coherent policy is hard to achieve. The secret is aligning policy with goals; if this can be accomplished, aligning the various components with one another other becomes much easier.

Stephen J. Troop and Nell Gross argue that Canadian higher education is both in a better space and structured more appropriately to thrive instead of just survive the current economic conditions.

Some inevitable belt-tightening aside, Canadian policy makers at the federal and provincial levels are working hard to spare colleges and universities, preserving as much money as possible for research and operating expenditures and keeping tuition costs affordable. The reason? They recognize that a strong higher education system is key to long-term economic competitiveness and a successful society. If the United States doesn’t act soon to shore up its higher education sector, its loss will quickly become Canada’s — and other countries’ — gain.

That American colleges and universities have been hit hard by the economic crisis is clear. Private institutions saw the value of their endowments plummet. Public colleges and universities have fared far worse. The State of California, struggling under a $20 billion budget deficit, cut higher education funding by 6.8 percent in 2009-10, furloughing faculty and staff in both the University of California and California State University systems, reducing the number of slots for entering students, and raising tuition dramatically. Budget shortfalls in New York, New Jersey, Arizona, Florida and elsewhere have likewise meant millions of dollars in campus cutbacks.

Federal stimulus money helped cushion these blows, and an expansion of the Pell Grant program, opposed by many Republicans, has provided some relief to students. But the stimulus money is nearly spent, and with the recovery stalled out, American higher education seems destined for more pain in the years to come.