Framework for Budget Reductions

I hope this memo finds you in good health and spirits.  The COVID-19 virus has tested us all and will continue to do so, both in terms of the threat it poses to our collective health, and in terms of the impact, it will have on our institutions.

I write to you now to discuss our budget and to enlist your support and participation in planning for budget reductions.  Due to the nature of the state's planning around budget reductions—that is, that it may at three moments reduce the state budget by amounts that could total as much as 10 billion dollars (representing a proportional cut of roughly 9 million dollars to out college budget)—we are almost certain to face as tight a budget as we have in decades.  At this writing, the governor is already projecting a 13 billion dollar shortfall in our budget (that is, even more than the shortfall that would produce a 7 million dollar cut for us). The truth is, we do not know the depths of the cuts we will need to manage, but we can say with certainty that they will be severe.

We have, in the past, waited too long to make the kinds of cuts necessary to navigate our crises.  We have also perhaps been insufficiently consultative.  I would like to do things differently this year—embarking upon an early effort to develop a strategy for next year and mobilizing the energies and commitments of the campus to achieve our goals. I am therefore launching a budget process that is both timely, clear-eyed, and open to the participation of the whole campus.  We will need to reduce our expenditures over the next year.

It is my hope that by acting early and moving as a campus, we will be able to do the best and fairest job possible. I know that this work has begun in the academic divisions and is under discussion at the Review Committee. Similarly, we've seen preliminary plans from administrative units, and I know that there's not a corner of the college that hasn't begun to grapple with the reality of a difficult budget year.   I hope that this document will provide a strategic framework to help organize these efforts and to allow people from every corner of the college to see how their work fits into a holistic, campus-wide approach to navigating the coming year.

I am not able, at this moment, to present a fully realized budget plan for next year, and would not want to develop that plan without significant input from the campus.  What we do need, however, is a strategic framework for making reductions, a framework that is grounded in our values and mission.  Articulating this framework as a first step will provide guidelines to department and division heads, chairs, deans, and HEOs, as they formulate their own strategies for reducing expenditures.  The elaboration of these strategies on the ground will also send a signal to the central administration about the things you want to preserve and those that you consent to reduce.

Make no mistake: there are hard targets that we need to achieve in the area of budget reductions, even if we do not currently know what those targets will be. Moving early and aggressively will helpfully mean that we reach our goals in ways that allow our core activities to continue, and the college to reposition itself for a renewal after this crisis abates.

How to Proceed

The following document is a college-wide framework setting document.  Every element of the framework offers choices—some choices that the college is advancing, but also opportunities for different units of the college to make their own choices. The document is an invitation to understand where the college's general framework lies, and to orient yourself within that framework—even if that means disagreeing with it to some extent.  We will need to achieve our budget savings, everyone on campus will participate in that effort, and some elements of what we will do will not offer great latitude for you to opt-in or opt-out. But you should make your decisions and choices explicit.  This document is a guide to where these decision points lie, and what latitude you have.

Budgets, Mission and Values

What we devote resources to and where we can cut—should reflect values. We begin, then, with a statement of values.  I advance these values as a provisional list of priorities for the college, with the understanding that particularly as we move down the list, different divisions or offices may want to reorder these priorities.  College-wide values during this crisis will be prioritized, at least preliminarily, in the following ways:

1. Teach every student admitted to the college, and make sure that, insofar as possible, the quality of our teaching is maintained. Do not interrupt progress to graduation.
2. Preserve the employment of employees insofar as possible, and try to ensure the welfare of everyone in our community. Think about the relationship between salaries we can offer and public benefits so that nobody is left without some means of support.
3. Sustain research, writing, and the development of our intellectual life.
4. Remain engaged with students, with public service efforts

Decisions we will make about two things—what functions we continue to pursue, and what staffing patterns allow us to pursue these functions are inter-related, but decisions about what we do in each area will be made against our values hierarchy.  Figure 1 is a photograph of a whiteboard drawing that illustrates these relationships.  The "mission-critical" line in the top left portion of the diagram sets up a continuum of values against which we will evaluate college tasks and functions.  Below that, a staffing diagram will interact with the task presentation.  I'll explain these interactions later in this memo.

Thinking about functions

Directly under the values continuum line, we find a set of four different approaches to functions that we execute.  They range, from left to right, from functions that we are not able to perform at distance to those that we cannot afford to perform, to those that we can do if we redeploy resources or reimagine ways of working, to functions that we absolutely need to perform.  While the far-left position (things we can't do at distance) is a function of operational possibility, everything else is a function of how we evaluate activities against our values and mission.  Part of what you will be doing is evaluating what you cannot afford not to do, what we can do with reimagined modalities, and what we cannot afford to do.

Thinking about the staff and faculty deployment

Below the task and functions grouping, and interacting with it (but perhaps not along the same values/mission continuum) we find the options of how we deploy our labor resources.  There are three basic—but not mutually exclusive—options here. We reduce the number of people in our employ (the far left option) we redeploy people from positions less able to work at a distance (or devoted to functions we cannot afford to continue) into functions that are under-staffed, and we find ways to accomplish more with our existing workforce and labor budget (on the right).  It is difficult to imagine that we will not be drawing on each of these categories of labor-management, but how we do it, and in what proportion, will be a reflection of our values.  We have said that preserving support for our labor force is a campus priority, but perhaps rotating non-permanent employees, for example, on and off-payroll in synch with the expiration of their unemployment benefits would be a way to preserve the livelihood of our employees even as our budget grows more constrained.

Putting these two elements of the table together gives us the broad outlines of a budget reduction framework: we will need to think about preserving the activities of the college that are most essential to our values and missions, working with a labor force that we will deploy in new ways, but endeavor as much as possible, to keep economically sustained through this crisis. The budget reductions we make in this way must allow us to come through this crisis with as small a financial wound as possible. It will not be possible to do everything we have traditionally done.  It will not be possible for us to retain the employment levels (# of people and # of hours) that we have had.  But we will endeavor to strike a balance between these two.

The diagram in the lower right-hand corner of figure 1 illustrates these trade-offs, with the X-axis roughly describing a values-based evaluation of the tasks we must evaluate, and the Y-axis more or less looking at how we deploy our resources (mainly, but not exclusively labor resources) to accomplish these tasks.  We are endeavoring to drive activity towards the upper right-hand corner.  We will probably back away from activity in the lower left-hand corner.  Other dispositions of activity, as well as an indifference curve running from northwest to southeast and illustrating one of any number of possible budgetary conditions, illustrates the depths of cuts we'll likely have to make.

How to use this framework

The goals is to focus as much of our energy on performing the most mission-critical tasks in the most efficient way possible. That means starting with an inventory of tasks and asking which are most mission-critical. Eliminating work that can't be done remotely and that doesn't need to be done as long as we are remote will free up the labor of people who are normally engaged in those tasks.  Of those, people who have permanence can be redeployed.  Those working hourly or who are not permanent can be let go (furloughed) with the promise of bringing them back when unemployment benefits lapse. Vacancies that open up under these conditions (i.e. 18 security team vacancies) can remain vacant until we are back on campus.

Next, in each unit, we may ask what work we cannot afford to do—again, beginning with work that is least mission-critical and then moving into areas that are more important. Some activities may be suspended altogether.  In other areas, such as class schedules, we may ask which classes are absolutely necessary to move the number of enrolled students to graduation, and that will lead to the consolidation of low enrollment classes, and the cancellation of classes less necessary for progress toward the major. In this same area, we find expenditures that are less about deploying labor and more about purchasing equipment or launching projects.  In IT, for instance, we will surely need to postpone replacing equipment that is approaching the end of life because we cannot afford to buy new technology; there are little corresponding labor moves associated with that, but it still falls under the category of monies we save by not performing a task we can't afford.

We then move to tasks that can be performed in a different way.  Thinking again about how we teach, on-line instruction allows the possibility of transitioning courses with multiple sections—particularly in the general education curriculum—into multiple discussion/grading sections led by graduate students or adjunct instructors, all feeding off a smaller number of central lectures (at an extreme, one lecture could service all discussion sections of a particular course).  In other areas of the college, we can ask whether virtual storefronts and document submission portals in our student services offices, for instance, reduces the time and the labor power needed to take care of student needs, or if some functions can be automated to require no interface with college personnel.

In each of these areas so far discussed there is an association between how we accomplish our work, and how we deploy labor. In a final category of savings, we examine whether it's possible to spend less on labor costs in other ways.  Anything that influences contractually mandated compensation levels will be a matter for the board of trustees and the state education department.  What the college can do in this area is to eliminate or tighten the allocation of discretionary course releases, both for unsponsored research and for other functions, like directing programs. Faculty contact hours freed up in this manner can be redirected to teaching, relieving some of the need to employ part-time faculty to meet curricular needs.

Each of these different moves must be grounded in the needs and realities of your different departments or division, and the work you do.  But the goal in each, referring once again to the diagram in the bottom left of figure one, is to move activity towards either the northeast or southwest corners (that is, either eliminating work that is neither efficient nor mission-critical or making work as efficient and mission-critical as possible).

Finally, in terms of depicting the work called for here, action plans for every unit of the college should describe the following:

1. the mission and values of the unit (and these should correspond in at least a general way with the college's);
2. the tasks that will be undertaken and the tasks that will be held in abeyance;
3. how labor will be deployed in new ways to meet tasks judged to be critical enough to persist;
4. how much money is projected to be saved by following the work plan?

For planning that has already taken place and for work that we still must accomplish, use this reporting structure so that we can compare work across the campus.