“This is a short term pain that in the long term will help reinvest the money in education, where it should go”

Last updated on: February 19, 2014 at 8:37 am by Jane the Actuary

“This is a short term pain that in the long term will help reinvest the money in education, where it should go” 2014-02-19T08:37:00-06:00 Jane the Actuary

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That’s the quote that the Chicago Tribune offers in its story today on the two-day faculty strike at the University of Illinois at Chicago, a strike aimed at securing substantial increases in professors’ and instructors’ pay.

Now, what characterizes this sort of strike, in contrast to others, is that the students have already paid their tuition, and the university has committed to providing them with 15 weeks of instruction. I see no indication that the school year is being extended by two days, so the students are the ones who lose here, not the administration. If the strikers’ response is that they can just learn the material on the syllabus for these two days on their own time, then that either questions the value of having instructors, or the value of the material itself.

In any event, the strikers are demanding substantial raises: from $30,000 to $45,000 for lecturers as well as the usual fights over the percentage increases for other faculty. Where is the money supposed to come from, without raising tuition? From the money tree, of course. Well, actually, the union’s website says this:

The University of Illinois has accumulated more than $275 million in unrestricted profits annually for the last four years and is on track to do so again for the 2014 fiscal year. The profit margin is more typical of for-profit universities like the University of Phoenix.

Tuition has increased by 25% since 2007, while student enrollment is up by more than 10%.

Over the last five years, administrators at UIC have increased by 10%, while tenured faculty positions have decreased by 1%.

And the UIC site says this, in a “fact check”:

Claim #7: Professor Barnum states that the UI has had a $300 million annual surplus for the last five years, so it can easily afford to pay the union’s demands.

Fact: Public statements suggesting the University holds a large surplus of funds are misleading. The majority of these dollars are committed to specific projects and, just as a checking account can appear to be flush, it is likely because outstanding checks have not yet hit. These committed funds include researchers’ federal grant dollars pending expenditure, indirect cost recovery dollars held in reserve for faculty start-up, and Student Information Technology fees that can be spent only on the Library or Academic Computing costs after recommendations by a student-run committee. The University’s financial situation with the State of Illinois is quite precarious, with payment of state appropriations lagging by $355 million and future revenues and costs very uncertain. While tuition has increased in recent years, it has not been sufficient to cover inflationary cost increases, including compensation and lost state appropriation funding.

Who’s right? Neither, I think — the university is, most likely, not making sustained efforts to reduce administrative expense, and more focused on prestige than cost-control, while the union doesn’t want to bother working with the university on actually finding the money to fund pay increases without tuition increases.

But the bigger issue is this: it takes me all of one minute to go to GM.com and find their annual report. The same is true for the University of Phoenix and other for-profit publicly traded companies. What about the UIC or other universities? I tried looking for information on finances at the University of Illinois and Urbana-Champaign a while back, with no success, and there’s nothing at the UIC either. Do they prepare any kind of “annual report” or any report on finances at all? How can a university expect to provide credibility, and justification for their tuition increases, if they aren’t remotely transparent on their finances?

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