UA President releases statement reacting to Governor's veto

FAIRBANKS, AK FOR IMMEDIATE RELEASE
June 28, 2019

Johnsen says Governor's veto to UA budget will be devastating to students and Alaska; Calls on legislature to override the veto; $130 million veto forces preparations for declaration of financial exigency

FAIRBANKS – In response to Gov. Mike Dunleavy’s $130 million veto to the university’s FY20 operating budget, University of Alaska President JimJohnsen, during an emergency meeting of the Board of Regents, outlined the immediate steps the university will take toward aggressive cost reductions and to prepare for a possible declaration of financial exigency. Johnsen told the regents that the devastating veto means disruption of educational programs and community services for every UA campus including community campuses and impact to every employee. The impacts will be felt across the state.

“The cut is more than twice the most extreme cut we anticipated,” said
Johnsen. When combined with the $5 million cut previously approved by the legislature, the university is being asked to cut $135 million or 41
percent in the fiscal year that begins in three days.

“It’s devastating,” he said. “We had several constructive meetings with the governor and his team over the past few months. I believe we demonstrated UA’s value to the state’s economy, our re-focused mission, reduced costs, increased private fundraising, and strategic investments. We have also created a task force to improve the university’s structure, and developed a powerful vision for how the university enables Alaskans to create a strong
and sustainable future for our state.”

“The immediate impact of the governor’s decision will be to disrupt
students’ educations – we will have no choice but to immediately send
furlough notices to all employees, and if sustained, this cut will
necessitate massive layoffs of faculty and staff, and we will need to
end programs rapidly to address a reduction of this scale. Longer term,
this decision will reduce opportunities for Alaskans, provide fewer skilled
employees for employers, reduce research that informs solutions to Alaskan problems and limit economic development.”

This is the largest budget cut in the university’s 100-year history,
Johnsen said, and comes on top of state budget cuts in four out of the last five years. If the governor’s veto is not overridden, we expect the Board of Regents will declare exigency the week of July 15th. Prompt action now will avoid the need for even steeper cuts later in the year.

“The impact of this proposed cut will be far greater than the $135 million
reduction of state funds to the university. It will impact our enrollment,
our research, and our philanthropy. This cut, if not reversed by the
legislature, will hurt Alaska’s economic competitiveness now and long into the future,” he said.

“Cuts at this level cannot simply be managed or accommodated without major impact to current students’ education and future opportunities, to
communities all across the state, and to Alaska’s future,” he said.

In light of the Governor’s budget, regents directed Johnsen to take
immediate action to eliminate expenditures in the fiscal year that begins
this Monday. Furlough notices will be distributed immediately to all
university staff. In addition UA will institute an immediate freeze on
hiring, travel and new contracts. UA simply can’t meet these budget targets without laying off a large number of people. In the event an override is not secured, the Regents also directed Johnsen to prepare a plan for declaring financial exigency by July 15th. This declaration permits the university to more rapidly discontinue programs and academic units, and to start the unprecedented process of removing tenured faculty. In addition they may need to consider increasing student tuition and fees. However, these interim measures will not come close to closing this budget gap.

In the meantime, he said, the university would continue to tell the story
of UA’s high quality programs and its critical role in our state’s economy
and our quality of life, and would appeal to legislators to consider
overriding the governor’s veto.

“The legislature clearly believes in the power of higher education and
agreed on a reduced but reasonable operating budget of $322 million, down $5 million from the current year,” Johnsen said. “At this point, we will ask legislators to affirm their support for the university by voting to
override this veto.”

“We are heading into uncharted territory with lots of uncertainty ahead,”
Johnsen said, “but we will stay focused on what is certain -- that UA is a
critical part of our state, that our students come first in everything we
do, and that we must all pull in the same direction in service to Alaska’s
future,” he said.