WRITTEN BY SARA SWETZOFF | JANUARY 28, 2014
On Jan. 24, Portland State’s chapter of the American Association of University Professors hosted a membership meeting on PSU’s financial situation featuring guest speaker Howard Bunsis, professor of accounting at Eastern Michigan University and Chair of the National AAUP Collective Bargaining Congress.
It was a full house in the meeting room in Smith Memorial Student Union, with a number of attendees standing in the back of the room and side aisles and spilling out into the hall. After introducing the meeting, economics professor and PSU-AAUP president Mary King directed members’ attention to poster-size sign-up sheets lining the walls. This week faculty will ramp up their student outreach by adding a number of times and locations to their tabling efforts.
The PSU-AAUP is in the midst of negotiating their next contract with the PSU administration and is looking to secure faculty and academic professionals’ salaries for the current biennium. Frustrated by the proposed cuts to salaries and academic departments, PSU-AAUP members are now talking to the PSU community about the possibility of a spring term strike if demands are not met before then.
The PSU-AAUP accuses the administration of “cooking the books”—manipulating financial data to augment a projected budgetary shortfall at PSU.
Enter Bunsis, a specialist in public sector accounting. Bunsis talked the audience through a twenty-slide PowerPoint presentation charting PSU’s revenue and expenses over the past 10 years.
He concluded that PSU is not as broke as the administration claims.
“Budget deficits or budget holes are simply projections of the future,” explained Bunsis. “The administration can say whatever they want. What matters are the actual results, which come from audited financial statements. These audited statements reveal that the university has tens of millions [of dollars] of reserves, and generates significant cash flows each year.
“Not only is there not a deficit,” continued Bunsis, “there was a surplus—cash in versus cash out—in 2013. And looking forward to 2014 and 2015, what we know is that money from the state is increasing, and that tuition will increase as well.”
But Scott Gallagher, director of communications at PSU, disputes that statement.
“We don’t know from biennium to biennium what the state is going to provide,” Gallagher said. “We have no reason to assume that the state will contribute more funds, and we can’t count on it.”
As for tuition revenue, Gallagher says that enrollment is currently flatlining.
“We project enrollment as best we can. As we get closer to the fall, our projections become more accurate, but overall the revenue from tuition is unpredictable.”
With tuition revenue generating the vast majority of the funds spent on the university’s general costs of operation, fluctuation in enrollment can significantly impact the university’s finances. It was for this reason, said Gallagher, that the university initially estimated the projected shortfall at $15 million. “Better to budget safely and leave some leeway,” he explained.
Navigating the ups and downs in both state revenue and tuition revenue, the PSU administration’s main goal is to “have control over our own financial destiny,” Gallagher said. “We want to rebalance the budget so that we don’t have to readdress cuts every year, again and again.”
But faculty disagree. Having already undergone pay cuts and furloughs a number of times since the economic recession of 2008, they insist that the university has the money but simply wishes to spend it elsewhere.
“As a business faculty member, I understand the university’s need to plan ahead,” said David Hansen of the School of Business Administration at PSU. “However, the AAUP has noted many inconsistencies in the administration’s presentations related to budget planning for fiscal years 2014 and 2015. Accordingly, we are not persuaded that financial resources are insufficient to address existing salary deficiencies and cost of living increases.”
Hansen is on the AAUP bargaining team that is currently negotiating with the administration. He emphasized the team’s accountability to the AAUP membership.
“The role of the AAUP collective bargaining team is to represent the interests of AAUP members in contract negotiations, with the goal of being able to recommend a fair and equitable contract to AAUP membership. How can we do so if we can’t support our recommendation with financial data we believe is credible?”
Gallagher refuted the charge of inaccuracy. “We’ve been over these numbers hundreds and hundreds of times,” he said.
The AAUP has repeatedly requested a line-item breakdown of PSU’s finances, and Gallagher said that while it would be difficult to fully accommodate that request, the administration will soon provide new documentation of its budget in a revised format.
In the meantime, faculty members continue to insist that the problem lies in priorities and institutional culture.
“The university clearly has the money; the issue is how they spend it,” Bunsis said at the end of his presentation.