Sparks flew between faculty and administrators at a meeting of the Budget and Planning Committee late last month over issues related to yearly budgetary reallocations and the chancellor's reserve.

"I really think that the administration in Woods Hall has lost touch with the core faculty," said Gail Ratcliff, associate professor of mathematics and computer science. "They see numbers on a piece of paper but they don't see individuals who are not making the income that they should make and who fall behind further and further every year."

Citing an "unacceptable dilemma" of "pathetic wage increases, [and] crumbling infrastructure," Jeanne Zarucchi agreed with Ratcliff's assessment.

"We cannot have a status quo of reallocations and below market wage increases," said Zarucchi, who is chair of the senate and a member of the committee. "That's just unacceptable."

Taxation and Reallocation

Faculty salaries are only one of many faultlines in a rapidly-growing and increasingly nasty rift between some faculty and administrators over the complexities of an incredibly intricate budgetary process that has left many confused and unhappy over the way cash is doled out and taken from departmental units. At the center of this fiscal tug-of-war are the yearly "taxations" which commandeer money from campus departments and units as a way to make up for the budgetary shortfalls that have beset UM-St. Louis for several years.

According to Don Driemeier, deputy to the chancellor, these taxations involve the removal of some "cost" dollars from unit budgets in order to balance the books while "rate" dollars for the units remain the same. Driemeier explained that rate dollars consist of continuing allocations from year to year to cover payroll and other expenses, while excess cost dollars result from the unused portions of rate allocations. He said rate allocations are rarely completely used because they don't assume vacancies in a unit due to deaths, retirements and resignations.

James Krueger, vice-chancellor for Managerial and Technological Services says that the taxation of these excess cost dollars is necessary to stave off the difficult and more permanent rate dollar cuts necessary to balance the budget during an enrollment downturn.

"This is the chancellor's most basic point. Do we think at some point that we can get out of this [downturn] or should we make the permanent cuts?" Krueger said.

Krueger and Driemeier contend those "permanent," or rate cuts would be painful ones, perhaps resulting in a need to shed staff.

"The fact is that core student credit hours decreased from 250,000 to 213,000 over a seven-year period," Krueger said. "The faculty during that period stayed about the same."

Hence, the taxation of excess cost dollars to make up the difference, which Chancellor Blanche Touhill says is predicated on the assumption that sagging enrollments and the revenues they are associated with will eventually rise, thus eliminating the need for temporary cost reallocations.

"Every campus of the University had an enrollment problem [during the five-year plan]," Touhill said. "I believed the students would come back. The academic officers said the students would come back, so we thought to ourselves why fire people who are doing a good job when in a year or two, they'll come back?"

Enrollments and Revenue

However, central to the issue of whether the students will come back seems to be a disagreement over how many actually left.

While no one seems to dispute the massive drop in enrollment incurred at the beginning of the "five year plan," a series of sharp system-induced rate reallocations, cost cuts and tuition increases begininng in the early 1990's, there has been disagreement about what has happened since.

According to figures provided by Krueger, UM-St. Louis saw a dramatic fall off of about 20,000 core credit hours between 1992 and 1993, followed by much smaller declines in succeeding years bringing the core base from almost 250,000 in 1991 to under 213,000 hours for fiscal year 1998.

Some on the budget and planning comittee see it differently however. Dennis Judd, president of the Faculty Council, prepared a scathing report for that body asserting that "enrollments, year-by-year, have gone up modestly but steadily."

Calling the claim of enrollment shortfalls "a total fiction," the report says campus revenues have gone up an average of 14% a year and blasts the administration for using the shortfalls to "justify reallocations made necessary only because the administration has consistently engaged in reckless budgetary policies."

Zarucchi agrees saying that the difficulty is not enrollment figures but too much spending on campus expansion.

"The faculty and those administrators responsible for recruiting students are actually doing an excellent job, but this is not the message that's being sent from Woods Hall because what's being said is that there is a shortfall," Zarucchi said. "There is no . . . need for reallocation. It's a choice and it's a choice which is imposed in order not to reduce the spending that is being committed to new programs."

Krueger said total campus "headcount" enrollment has gone up but says that core credit hours still declined over the same period. He also agrees that the revenue over those years did rise due to tuition hikes but says that some of that extra money was already hardwired for system-mandated five-year plan intiatives.

"The fees went up . . ." Krueger said. "So we did have more revenue. It's just that we were committed to spend that revenue for certain system priorities and campus priorities."

Economics professor and committee member Tim McBride is concerned with the administration's projections for future enrollments calling them "problematic."

"We've been basing our budget for several years now on enrollment projections that are larger than what we actually end up getting in as far as students go," McBride said, citing the 230,000 core credit hour projection on which the administration has based its rate budget. The core credit hours for this year are projected to reach about 217,000.

"You multiply that by dollars per student credit hour and that ends up being what the chancellor has called an enrollment shortfall and then she goes to the departments, the units and the colleges on campus and says you have to take budget cuts equal to that enrollment shortfall . . . That becomes a cut," McBride said.

Krueger and Driemeier contend that the 230,000 credit hour figure is a realistic figure for what the administration predicts the enrollments will eventually climb back to. This balances the rate budget and protects faculty and staff from layoffs, while the difference is made up by less painful temporary yearly cost taxations on units.

"It means that the credit hour estimate is realistic over time. It may not be realistic in this year. So over time when we get back to 230,000 credit hours, we won't need any cost cuts," Driemeier said.

Touhill hopes that that time is now as she works to institutionalize rate dollars and credit hours from outreach programs to St. Charles and Jefferson Counties as well expansions in the fine arts programs.

"By doing things like that we think we're going to be pretty close to the 230,000 credit hours," Touhill said.

"Pay As You Go"

No one claims that the budget is not experiencing shortfalls, projected this year at about $2.5 million, according to Krueger. What is at issue is why they exist and how to pay for them. The administration insists that temporary enrollment shortfalls are to blame while others insist slower growth could bring balance and stop the reallocations.

"The fact is that the University would not have had to make any reallocation if it did not spend faster than it can afford to," Judd said, blaming "a reckless budgetary policy in which the expansion of the campus . . . has taken place at a pace that is not at all correlated with budgetary realities or with any notion of what the impact of that rate of growth is on existing programs."

The answer to reallocation, Judd suggests, is a "pay as you go" policy. Judd introduced a resolution advocating such a policy at a meeting of the committee in early February. The resolution, which passed unanimously, complained of "weakened core programs and services" and urged that "overall, campuswide reallocations will occur only under exceptional circumstances."

Since then, some on the committee feel that the resolution has been ignored.

"Members of the committee are very disturbed at the apparent lack of response to the resolution that was passed earlier this year which advocated a principle of 'pay as you go,'" Zarucchi said. "In other words that campus spending should be restricted to the amount of money available and not the money that we wish we had."

Driemeier said the chancellor is not "certain" but is "moving in that direction."

"I think the chancellor has said that she is willing to consider it and it could well be that she could be consistant with that policy next year."

Touhill said she always listens to the committee's advice and implements it "as often as I can." She said she was concerned about the definition of "pay as you go" which she feared could squeeze out small programs.

"The question is what do you mean by 'pay as you go?'" Touhill said. "If you really only do pay as you go you'd only look for big programs that would bring in a lot of students that would either break even or make a little profit."

Judd dismissed the idea that "pay as you go" would necessitate rate reallocations as "completely absurd."

"The reason that rate cuts would have to be made is that the administration has built a house of cards by spending money too fast," Judd said.

Judd refused to comment on specific programs he felt the University should scale back but others have suggested that such things as the endowed professorship program should be delayed as part of an effort to curtail spending.

"Nobody's saying [the professorships are] a bad idea . . ." Zarucchi said at last month's meeting. "Nobody's saying the campus shouldn't grow but if we're cutting, one way to slow our growth is not to proceed with new hires."

The Reserve Driemeier said funding for the endowed professorships comes in some part from the chancellor's reserve or cushion which itself came under fire at the April meeting. Many committee members asked about the sources and amounts of the reserve for which the chancellor said she had no figures. During the meeting, Judd critcized the reserve which he said was being "scavenged" out of departments and units for reallocation to various projects. Others expressed serious concern about why the chancellor could not give numbers on the fund and asked why the reserve was not used to avoid cost dollar taxation from the units.

"I think it's news to some of the faculty that those sort of reserves sit in the budget in Woods Hall because they could have been used to cover these budget cuts, so the budget cuts didn't have to happen," McBride said.

Interviewed later, Touhill estimated the size of the reserve at about $4-7 million but she said most of it flows back out to the campus units every year to backstop departments and fund various programs, while some of the rest is used for "new opportunities" like minority hiring and endowed professorships. At the meeting, Interim Dean of the College of Arts and Sciences Martin Sage confirmed that his unit received more money back from the chancellor than taxation took.

"What we normally do is we give out about four million dollars on the average every year out to the units in cost dollars," Touhill said.

She said freezing the search for endowed professors, as Zarucchi suggested might be a problem since the funds have already been secured and if the position is not filled on a three-year timetable, UM-St. Louis would risk losing the spot to another campus.

Krueger said it was very difficult to identify the exact sources of the reserve at a "macro" level but Touhill indicated that some of it was there from the previous administration while some mission enhancement funding also went through it.

Both Krueger and Driemeier said such a fund was not unusual for any organization head to have and was needed to backstop departments that fall in the red, as the chancellor has done several times in the past.

"No executive officer of an institution this size will not have some contigency monies because if she runs a deficit, she's history," Driemeier said.

Some, like Ratcliff, had expressed concern over faculty salaries but Driemeier said that faculty salaries had gone up by about one-third since 1991. McBride, however doesn't feel salaries are the major issue.

"That's not really the biggest concern," McBride said. "I think people are really most concerned about the core infrastructure of the institution. We're concerned that we're losing collegues and not replacing them . . .We're concerned that certain sections cannot be offered on a timely basis for students. We're concerned that we can't staff our offices properly so that our research can get done but also the students can be served."

Driemeier sees the issue as a difference in philosophies. Krueger says "budgets can be looked at in a multitude of ways."

"I don't think that there is a right answer or a wrong answer . . ." Driemeier said. "I think it is a matter of how you choose to manage the institution."