- The University of Alaska will lose about $135 million in state funding — or 41% of its state support — after Alaska Gov. Mike Dunleavy made deep cuts to the state's operating budget last week through line-item vetoes, the Anchorage Daily News reported.
- U of Alaska System President Jim Johnsen called the cuts "devastating" and "unprecedented," and said the university may have to raise tuition, cut programs and lay off faculty to balance its budget. Three-fourths of the state legislature's members can override the veto, but that appears unlikely.
- On Monday, the university sent furlough notices to 2,500 employees, who will have to take 10 days of unpaid leave during the 2020 fiscal year, according to the Daily News. The university is also freezing hiring and travel, and may declare "financial exigency" in the coming weeks, making it easier to lay off tenured faculty.
The dire budget cuts highlight the volatility of state support for higher education, which was dramatically reduced during the Great Recession and has not yet recovered.
Alaska, however, was one of just six states where state spending per full-time student had recovered by fiscal year 2018 after seeing a dip during the recession, according to a recent report from the State Higher Education Executive Officers Association.
U of Alaska may be harder hit by a decrease in state support than would most other institutions. That's because Alaska is one of three states in which public colleges relied on state funding for more than 40% of their revenue in fiscal year 2019. That's in contrast to Vermont, New Hampshire and Pennsylvania, which each received less than 10% of their funding from the state.
To cope with low levels of state funding, many colleges have begun relying on tuition for a larger share of their revenue. Indeed, New England public doctoral institutions tend to raise tuition and fees by 17 cents for every $1 in divestment from the state, according to a report from the Federal Reserve Bank of Boston.
Some colleges also have forged agreements with their home states to keep tuition level in exchange for more funding. And still others have increased fundraising to fill the gap.
In Alaska, the cuts also could hurt instruction. In New England, instructional spending fell following declines in state support, the Boston Fed noted. State divestment also had detrimental effects on student debt and the availability of skilled workers.
Instead, the report suggests that states should make other budget cuts and raise taxes because the "fiscal benefits associated with public higher education likely will justify the additional costs to taxpayers."