Alaska Fiscal Policy| Unintended consequences …

A piece yesterday morning in the Anchorage Daily News reports on a vote of “no confidence” passed Saturday by the Alaska State Hockey Association (ASHA) in University of Alaska – Anchorage Athletic Director Dr. Steve Cobb.

In a resolution sent to a range of university and state leaders, the association cited the steady decline of UAA hockey and claimed repeated efforts to reach out to the university’s athletic department and hockey coaches have been “systematically met with callous indifference.”

This piece follows a blog post in Saturday’s online version of the ADN by long-time sports writer Doyle Woody commenting critically on the “search committee” recently established by UAA to identify a new hockey coach.

The problem people appear to have with the committee is that it does not include a member of the hockey program’s alumni or the hockey community, two groups severely alienated from UAA hockey. … at a time when UAA hockey is in severe decline — consecutive last-place finishes in the Western Collegiate Hockey Association and attendance plummeting so badly it’s just sad to see so few fans inside Sullivan Arena — further alienating alumni and fans is a stunning misstep, the equivalent of shooting into your own net.

Woody’s blog post also adds tenor to the “callous indifference” noted by the ASHA.

Nor does it help the situation that a number of folks who emailed [UAA Chancellor Tom] Case received this reply from his staff: “Thank you for your interest in Seawolf Athletics.”   Look, we’re sure Case gets a ridiculous amount of email, and he and his staff likely can’t answer every one in detail, but seriously, that’s the reply? Might as well respond, “Beat it.”

Woody followed up the blog post with a column in yesterday’s published version of the ADN by repeating much of what he had written the day before.

As someone who once was a strong and significant supporter of UAA Athletics (my name should still be up in the donor’s wall, they haven’t returned my contributions) — but now, no longer is for many of the same reasons identified by the hockey community — I have thought about this issue at some length.

The reason, I have concluded, both for the lack of outreach by the University to its alumni and support base and the “callous indifference” of both the Athletic Department and Administration to the University’s would be supporters is rooted in the state’s funding decisions regarding the university system.

Interestingly juxtaposed against the Saturday and Sunday ADN articles, was an article in Saturday’s Washington Post on a decision made Friday by Virginia’s College of William & Mary, a state institution, to increase in-state tuition.  According to the US News and World Report, William & Mary is one of the nation’s top 35 universities.

Yet, as the Post story reports, “[t]he state share of the operating budget for the college … has fallen from 43 percent in 1980 to 13 percent today.” That is not an uncommon percentage among state institutions.

In contrast, while UAA provides very little transparent financial information about its operations, from past efforts on the topic my estimate is that UAA receives more than 90 percent of its non-tuition funding from the state.

In short, due to state funding decisions and unlike almost every other university in the nation, UAA relies very little on private donors.  Because the state largely covers all of its costs, there is little need for UAA to be reponsive to supporters.  That, in turn, has led to the “callous indifference” noted by both the ASHA and reflected in the emails reported in Woody’s blog.  It is one of the “unintended consequences” of Alaska’s fiscal policy.

When Patrick Gamble was first hired as President of the University of Alaska in 2010, he convened a high powered team of senior nationwide education consultants to review and provide recommendations on the direction of the UA system. The result was the so-called “Fisher Report” (named after the leader of the team), released in January 2011.

Among other areas, the Report had a great deal to say about the University’s outreach efforts.  “The condition of institutional advancement—the management of private giving—at the University of Alaska is mediocre at best. …   While UA has received generous gifts from corporate donors, it has yet to convince most of its own alumni to contribute. The giving rates of alumni to UAF’s, UAA’s and UAS’s annual funds ranges between one and six percent; embarrassingly low  ….”

The reason?  “State appropriations have been adequate; the reserve has enabled the University to adequately meet obligations.”  Or, put another way in the report, “‘We’ve always depended upon Ted Stevens and the oil companies to take care of us,’ pithily observed an alumnus.”

Shortly after its presentation, the University put the Fisher Report on the shelves and let it start gathering dust.  Despite the recommendations of the Report, the leadership of the University has not felt a need to connect with its alumni and supporters in a serious way — and hasn’t.  As long as state government “and the oil companies” continue to take care of  funding, the University won’t feel an imperative to connect.

Ironically, however, UAA’s own Institute of Social and Economic Research (ISER) has made clear that state government can no longer support state institutions financially at the levels it has in the past.

Right now, the state is on a path it can’t sustain. Growing spending and falling revenues are creating a widening fiscal gap. In its 10-year fiscal plan, the state Office of Management and Budget (OMB) projects that spending the [state’s current] cash reserves might fill this gap until 2023 ….

But what happens after 2023?  Reasonable assumptions about potential new revenue  sources suggest we do not have enough cash in reserves to avoid a severe fiscal crunch soon after 2023, and with that fiscal crisis will come an economic crash.

ISER’s solution?  “The answer is to save more and restrict the rate of spending growth.  All revenues above the sustainable spending level … would be channeled into savings.”

As I have explained elsewhere on these pages, that will require a significant reduction in state spending.  The legislature this year passed a  $6.8B budget.  According to ISER, the current sustainable spending level the state can afford without furthering the state toward the “economic crash” ISER describes is $5.5B.

Based on the Fisher Report — and the University’s own conduct — one place to look for reduced spending clearly is the University system.  As  the Fisher Report notes, compared with Alaska’s anemic results, “[t]he national average for alumni giving is over 17 percent, and some institutions go as high as 60 to 70 percent.”

Beginning next year, the Governor and legislature should start calculating the state’s contribution to the University system assuming that the system achieves at least the “national average” for alumni giving.  In subsequent years, funding levels should expect even more of the University system’s private efforts.  

In short, given the coming fiscal gap, the state can no longer afford to have the University system remain on state welfare.  Instead, the state needs to adopt its own form of “welfare to work” approach for this situation.  Its time for the University system — and UAA Athletics — to pull its own weight.

In my experience, that will both help deal with the state’s upcoming fiscal crisis and, because the system will start looking at its alumni and supporters in a much different light, deal with the culture of “callous indifference” noted by the ASHA.