‘Devastating’ funding cuts threaten the future of Alaska’s higher education

University leaders in Alaska are scrambling to prepare for a “devastating” 41 percent cut in state funding that threatens the future of higher education in the northern state.

Last Friday, Governor Mike Dunleavy cut US$444 million from Alaska’s state’s operating budget, adding to already deep cuts made to services by the Alaska Legislature, all in an effort to move closer to a balanced budget without raising taxes or reducing the Permanent Fund dividend – a unique annual payout to Alaska residents from oil revenue.

The University of Alaska (UA) is sadly the biggest target of Dunleavy’s line-item veto of individual budget items, losing a substantial US$130 million in state support on top the US$5 million cut approved earlier by lawmakers.

James Johnsen, president of the UA System, called the cuts “devastating” in a letter to faculty, staff, and students, adding that it was with “grave concern for the future of the university and our state” that he was announcing immediate measures to curtail spending at the university.

I am heartbroken. This should concern everyone in higher ed, who cares about climate change research in the US, or who has ever been inspired by the breathtaking everythingness of Alaska. This will cause a rapid, massive brain drain from the state, w/ devastating consequences pic.twitter.com/Op1LZV1X1z

— Alex Webster, PhD (@alxweb) June 30, 2019

In an interview with The Washington Post, Johnsen warned layoffs would be necessary, and told students to expect certain courses and whole academic units planned to be shut down, in all likelihood, permanently.

One or more of the universities three campuses will also likely have to close, and as many as 1,300 staff and faculty across the system could lose their jobs, Johnsen told Alaska television channel KTVA. In an op-ed before the governor announced his veto, Johnsen said the system might have to close one or more of its three main campuses.

He has also urged faculty, students and the general public to “raise your voice” in objection to the cuts, hoping a last-ditch lobbying effort may persuade legislators to overturn the governor’s decision. But even with some impact, this movement looks unlikely to get the majority needed in the legislature to reverse course.

“Simply put, if not overridden, today’s veto will strike an institutional and reputational blow from which we may likely never recover,” Johnsen wrote in his letter.

Activists would need to convince three-quarters of the 60 legislature members to agree to a reversal before Friday 12 July, just five days into the special session. Dunleavy, himself, is showing no signs of backing down despite the public outcry. He has made clear that he believes the university will persevere and adapt under the financial strain.

“I do believe the University of Alaska is resilient. I do believe they have good leadership, and I’d say give them a chance,” Dunleavy said, as quoted by Anchorage Daily News.

“I believe that they can turn the university into a smaller, leaner, but still very, very positive and productive university here in the northern hemisphere,” he added, saying the university and the state can’t expect to be “everything to everyone.”

The dire budget cuts in Alaska highlight the wider issue of the volatility of state support for higher education across the United States – funding that was dramatically reduced during the global financial crisis of 2008 and has struggled to recover ever since.

While Alaska was one of the best performing when it came to recovering higher education funding, with state spending per full-time student having recovered by 2018, they are also one of the states that relies most heavily on that funding.

The same report found Alaska, Illinois and Hawaii rely on state funding for more than 40 percent of their education revenue while Vermont, New Hampshire and Pennsylvania each get less than 10 percent of their funds from the state.

With such a significant amount of their funding coming straight from the state, the latest round of cuts promises to be highly damaging, not just to UA but to the state as a whole.

Professors are warning of the potentially far-reaching consequences that gutting public universities in Alaska could have, such as driving students out of state, drying up the local skilled workforce, slowing economic growth, and even affecting climate change research.

According to a report from the Anchorage Economic Development Corporation’s Alaska Common Ground meeting, the University of Alaska system provides US$714 million in direct effects and US$402 million in indirect effects to the statewide economy.

Many Alaskan businesses also rely on graduate students to build their companies and add to their skilled workforce. The report points out that 68 percent of two-year college graduates and 42 percent of four-year year college graduates stay in the area of their school after attending.

The value they contribute is also astronomically greater than those who don’t attend university, with the average bachelor’s degree holder contributing US$278,000 more than the average high school leaver.

UA wasn’t the only organisation to take a hit in the cuts. Alaska’s senior benefits programme was eliminated, Medicaid – the state programme that helps with low-income people with medical costs – spending was reduced by US$50 million, the Village Public Safety Officer programme lost US$3 million in funding, a cruise ship pollution inspector programme was eliminated, and most state support for public broadcasting was erased.

Even with such substantial cuts, the state deficit politicians are so eager to reduce will only be lowered by about half, which means more – and likely deeper – cuts can be expected next year.

The predominant source of Alaska’s financial woes is the decline in the oil industry – a staple Alaskans have come to rely on as a constant.

In recent years, however, Alaska has fallen from second to fifth in US oil production and, according to the Resource Development Council, it’s not for a lack of resource that production has declined.

The majority of the remaining resource is located on federal lands and offshore areas where access has been hindered or blocked either by federal policy, environmental litigation, or a complex and ever-changing regulatory regime.

Given this declining reliance on oil, further cuts appear inevitable. But it is whether the higher education sector of the state is a worthy trade-off. The impacts of such severe cuts will have to wait to be seen, but if Johnsen is correct, “There is no strong state without a strong university.”