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Big Bucks, Small Change?

September 2, 2011, 11:36 am

One of the more interesting things I’ve discovered as I have become more directly involved with institutional budgeting is how complex it is, and how the same amount of money can be both immense and small at the same time.

I suspect we do our budgets in about the same way as most other private colleges and universities, at least at the macro level. We project enrollments, discount rates, and tuition revenue. We calculate fixed expenses and evaluate and prioritize new projects and existing budget lines that may turn out to be optional. We close some lines and open others.

Generally speaking, each year’s budget comes from a planning process that lasts about three years. We keep a running budget projection three years out so that we can evaluate budgetary moves both in terms of their immediate impact and their longer-term implications. Care in making those three-year projections has mostly kept us out of difficulty over the current period of economic instability.

This budgeting process is relevant to hiring because we keep an eye on our overall operating budget, the great majority of which is, in fact, personnel costs. As I’ve written recently, we are planning to make a large number of new hires this year, possibly up to 14. With salary and benefits, the budget for these positions, should we fill them all, is pretty close to a million dollars.

Our overall operating budget is in the low-$40-million range. Thus, all of these new hires, which would substantially reshape the institution for years to come, amount to just over 2 percent of the overall budget. This is the paradox of institutional budgets—on the one hand, that million dollars looks like an immense amount of money, but on the other, as a percentage of the whole budget, it’s simply not very much.

This paradox is why careful analysis of needs and priorities is so important to the running of an institution. If we were compelled to cut a million dollars from our basic budget, it would hurt. We probably wouldn’t have to cut staffing, but we would certainly have to undertake a stringent examination of every open position, and we’d lose a lot of the amenities that make our institution a pleasant place to work. In that regard, a million dollars is a lot of money.

It’s also a lot of money when we consider the possible impact of making 14 new faculty and administrative hires who could potentially make a huge difference in the university’s future. Most of the positions involved are replacements for colleagues who are retiring, and so we are looking at a significant generational change. Some of them involve some restructuring of programs, and that, too, has an obvious impact on our operations long into the future.

But in the overall budget picture, a million dollars simply isn’t that much money. Even so, a figure like that is the margin between just getting by and thriving, so it grows in significance all out of proportion to its percentage of the total budget. Those of us who have responsibility for that budget, I assure you, think about this every single day as we make financial decisions.

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  • tdb489

    Basic motivation theories state that motivation times ability equals performance.  I have no doubt that this is true.  Proposals one through three are a waste of money.  They will not work.  Stupid can not be fixed and a good work ethic begins at home. 

  • jwhawthorne

    In spite of the concerns of “to be determined”, the first two proposals are right in line with what we’ve known about the sociology of education since James Coleman’s work of 50 years ago. Socioeconomic integration raises the cultural dynamics of K-12 education. Our focus on “neighborhood schools” (which pairs too easily with de facto segregation) works in the opposite direction. The challenge with the TRIO program solution is that by the time its participants make it to college, they’ve adopted a host of poor skills and knowledge gaps that are very difficult to remediate.

    If only the problem were as “easy” as stupid and lazy. The true challenge runs much deeper in the social structures we’ve built that perpetuate inequality.

  • jffoster

    And if the problem were as simple as  income inequality, we could fix that. Simply decree and manipulate the tax system so that all families have equality of income.

  • jffoster

    Sounds like you have doubts that a silk purse can be made of a sow’s ear when the sow is from a pigsty whose inhabitants do not value silk purses and resent any of their members trying to get or become one.  

  • CS2011

     I think the third proposal is definitely an important focus for closing the socio-economic gap in college.  Often low-income and first generation students do not have the access to information about colleges and the best fit for them.  They do not have the resources and/or the familial support system that is familiar with our college system.  Our counselors are stretched thin and cannot provide the guidance and attention that these students need.  We need to figure out ways identify our strong, but overlooked students and give them access to the most personal and focused assistance.  Then they can truly determine whether a two or four-year school is right and make an informed decision.  That will help success and ultimately reach Obama’s goals.

  • rwilt004

    Old news in terms of research. We’ve known for a long time low SES impacts postsecondary success negatively. In practice, it is apparently easier to engage in racial profiling to develop a mish-mash of programs for the at-risk groups. Attention to correct postsecondary at-risk conditions needs to start at least in middle school. A child who can’t read in the fourth grade will be remediated and at college-level reading when s/he is 20 years old after a semester of remediation – really? Not to mention all the other social skills that are lacking. 

  • rwilt004

    Forgot to add – for every journal article or dissertation on low SES success, there must be a dozen based on race. 

  • jsarvey

    The report seems to miss an obvious proposal. Examine the research on what works for retaining and graduating low-income students and then replicate those things. The third proposal touches on the idea but assumes that it’s just TRIO and GEAR UP that work. We should look for the ”positive deviances” in variety of institutions and settings. What’s happening at those community colleges that are the very best in the nation in terms of graduation rates? Which four-year public universities have the best graduation rates and what are they doing? Same for private four-years. It’s probably not actually worthwhile looking at the very elites, like the Ivy League. Take one UC campus like UCLA or UC Berkeley and you’ll find that they enroll more low-income students than the entire Ivy League combined. 

  • mdanieltex

    Sounds like some of the same arguments used for school bussing. 

  • rick1952

    Actually, it sounds like neither you (jffoster) or tdb489 understand what Kahlenberg is recommending based on the report.  Perhaps you don’t recognize the silk threads that exist in low-income communities and therefore are apt to miss the opportunity to weave many more silk purses with some careful cultivation.  Your assumption (at least what I detected as an assumption) that low-income students are bereft of capacity to achieve academic success is exactly the prejudiced attitude that contributes to maintaining a system that discriminates unfairly against low-income students.  Being poor or working class does not equate to being “stupid” per tdb489 nor being a sow’s ear per your comment.

    As a working class, first generation college student who graduated from one of the most selective undergraduate colleges in our nation, I recognize that my educational preparation did not match that of my much more affluent classmates yet I successfully completed my BA, earned both a masters and doctorate with honors and have worked successfully for 30+ years in higher education.  I am not unique or special – just lucky to have had the chance to attend a first-class undergraduate college that prepared me far better than my local community college could have done.  There are many more working class and low-income students who can replicate and even surpass my academic success if given the opportunity to attend first-class undergraduate colleges.  The recommendations listed above can make that opportunity more likely for other students.

  • jffoster

    For the record, a coal miner’s daughter’s son I am.   And the first person in my family to have gone to college. And my brother, who a very quick mind has,  maintains the family tradition more closely than I do.  Chwaraewr ydy fo.  ‘A quarryman he is.’ 

  • whitakal

    This post and the ensuing discussion appear to me to be rattling about in a silo. What do Mr. Kahlenberg and the commentators think about the arguments put forward by other Chronicle bloggers (such as Richard Vedder and Peter Wood), that the students who do complete college end up with a largely empty and valueless “education”? The President’s airy demand that the country achieve an arbitrary college completion rate begs the question of what value that completion brings–apart from the value to institutions hungry for more tuition dollars. Indeed, the arguments about the bubble in higher ed suggest that increasing attendance and completion through the inevitable student grants and funding for remediation will only dilute the content of higher ed further. Perhaps this time it will be different … But that seems an argument that Kahlenberg et al. must at least address, if the dreamed-of 60% completion is not to undermine its own worth. In the absence of such an engagement with the fundamental questions, their proposals sound more motivated by a desire to reengineer society than to improve education. Which I suspect is the case.

  • clementj

    But stupid can be fixed!!!!  Unfortunately it requires a special type of intervention that teachers have never been trained to do.  Look at “Thinking Science” by Shayer, Adey, Yates.  They improve student ability to think.  Or look at the ADAPT program at U. Nebraska, Lincoln.  It improved passing rates in subsequent courses dramatically.  Compared to remedial algebra their program halved the failure rate in a subsequent calculus course.  Then of course there is the Instrumental Enrichment program of Reuven Feuerstein.  It has dramatic results with improved thinking and motivation.

    The formula motivation times ability is just fluff, and no such formula can be determined.  Motivation actually comes from satisfaction after mastery of a subject.  You achieve self esteem by mastering something.

    So targeting low performing students is a good idea, but it needs to have programs such as ADAPT which actually improve their thinking.

  • marka

     I, too, continue to question the entire ‘Obama’ proposal for higher graduation rates.  Wrong metric + wrong goal = wrong means suggested.  

    We collectively might want more equity based on merit, rather than the circumstances of birth, so we might want to give lower SES more of a boost so that opportunity is indeed equal.  I support that.  

    But that doesn’t mean more should go to college & graduation – wrong goal, wrong metric.  Instead, the goal should be to provide them a better foundation much, much, earlier.  Plenty of studies devoted to the importance of earlier interventions providing more bang for the buck – not just in terms of educational attainment, but lower crime rates, etc.  For my 2 cents, we should insist that K-12 do a -much- better job than it has in the last 50 years.  Unfortunately, public education has become a battlefield between & among adults – administrators & teachers who want more compensation for the same outcomes – and children, who not only don’t come 1st, they come last, behind the adults: politicians, unions, administrators, parents, etc., i.e., those that vote now.

    As others have pointed out, putting more people in schools doesn’t necessarily provide them with any better education – plenty of studies suggesting they don’t, and certainly not in any fields that will actually add to the US economic capacity in the world: our economy, and the world’s, don’t ‘need’ any more folks concentrated in studies where we already have a tremendous surplus of talent.  Just look at the job market for higher education – part-time adjuncts more & more the norm, with even more being supplied to the market every year.  Talk about an incredible miss-match between supply & demand … driving labor costs down … And on the other side, we actually import much of our educated talent from overseas: engineering, math, science, etc.  And health care in particular.  We might help ourselves collectively if we steered more of our young folks into these arenas, rather than ones that are overcrowded – and have been for a long time.  (Yes, there are business cycles where we have too many engineers, then not enough … but the intermediate health careers have been crying for more talent for years – nurses, aides, nurse practitioners, physicians assistants, etc.)

    I continue to ask for any good evidence that higher education actually -causes- improvements for society, rather than being an adjunct, or merely correlated, stat, beyond a certain threshold.  We have plenty of highly educated waitrons, taxi drivers, longshore workers, etc.  They didn’t ‘need’ a degree to get & keep a job, and other than reporting that they feel like they are better for it, no proof that that has some net benefit for society as a whole – again, after some threshold has been reached.

    Don’t get me wrong – I believe that higher education -can- provide a benefit to individuals.  I’m just convinced that it is -not- of net benefit to some individuals, e.g., those who incur significant undischargeable debt that becomes an albatross for each them, and us.  And I’m not convinced a continued push for more ‘graduates’ will actually improve anything.  From some of these ‘graduates’ I’ve had to hire, and then fire, I don’t see the piece of paper signifying much of anything, other than an ability to get thru a process, and pick up some bad work habits along the way, because they’ve been rewarded for mediocre work, or worse.

  • 11152886

    Yes, instead of those philanthropists giving millions to an institution that has lots of revenue, they should take on overview of educational institutions, select those for which a million bucks would really make a difference and spread the largesse, even if it is very selective. 

  • nafraguoc

    If the Big 12..er..10…11? Wants BYU in the conference, they are going to have to make it a sweet invitation.  Independence is working out pretty well for BYU.  We had a lousy schedule and a lousy start to last year, and still ended up ranked #25,26.  Next year’s schedule will be better and the team will be better.  As a fan, I love the ability to see ALL BYU’s football and basketball games!  GO BYUTV!!!  As an indy, BYU has just as good of chance to make a bcs bowl as it would in the B12, and without the problems that go with conference membership (ie the Sunday play fuss).  Besides, by 2013 the bcs is likely to get rid of bcs AQ status anyway in order to ease all the conference commotion we’re currently seeing.  Then there will be very little incentive indeed for BYU to join any conference.  Our other sports are doing very well in the WCC, thank you.

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