University of Alaska braces for cuts, warns of economic impacts

As the legislature’s conference committee hashes out the state’s operating budget for the upcoming fiscal year, the University of Alaska is standing by, waiting to see just how large the fiscal dent will be.

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Depending on legislative action, the University of Alaska will face between a $50 million to $75 million budget shortfall this year.

That leads to one commonly-asked question of UA President Jim Johnsen – is there more you can cut?

“Of course there’s more that could be cut,” Johnsen said. “At the same time, every single program, every degree, every single service that we provide meets a need to some extent, number one, and number two, there’s a constituency for it.”

“We didn’t make up these programs.”

So far, nearly 60 academic programs are on track for elimination, with another 24 under consideration.

And as the university whittles down academic programs and other services, jobs are affected as well.

One-hundred-thirty positions have been cut through lay-offs or attrition, and almost 170 more are impacted by furloughs.

Depending on the legislature’s funding decisions, those numbers could grow substantially. And, Johnsen says, with each staff reduction, comes a direct economic impact extending beyond the university.

“But, there’s a tradeoff with every single one of them,” Johnsen said. “You can say, ‘cut the beurocracy.’ OK, well what does that mean? Pick a number – 200 people, who are not gonna be shopping at Fred Meyer’s anymore, or Safeway or wherever. They’re not gonna by cars at Kendall’s or wherever. They’re gonna leave the state.”

“Whatever it might be, it has a major economic impact.”

Johnsen says if the cuts are more gradual, the university should be able to take a more measured approach to its reductions.

But, if the cuts skew toward the higher end of the spectrum, Johnsen says that might not be the case:

“We wouldn’t have the luxury of the time to consciously, carefully weigh these trade-offs, we would simply have to make some tough decisions very quickly in order to hit these numbers in the coming fiscal year with some serious impacts, certainly, on our ability to serve the state’s needs,” he said.

Aside from operating budget cuts, Johnsen says he’s not optimistic about the funding situation in the capital budget.

The Board of Regents asked for $34.8 million to complete construction of UAF’s Engineering Building. Governor Bill Walker, however, did not include funding for the project in his proposed capital budget.

The partially built Engineering Building currently costs the university $1.4 million per year to maintain.