Monthly Archives: October 2015

NMU AAUP Position Paper: “The Windfall and the Budget ‘Crisis”

The Executive Committee of the NMU Chapter of the American Association of University Professors (AAUP) is seriously concerned about our university’s current budget situation and the lack of administrative transparency and candor.

During the last two months, there has been much discussion about a budget deficit caused by falling tuition revenue from reduced enrollment (estimated at either $2.6 or 2.8M—both have been reported).  Yet the NMU Administration has provided little information to the campus community. Consequently, there has been much tension and speculation among the university community about whether classes, services, faculty, or staff might be eliminated.  At fall convocation, President Erickson did not mention the budget situation, but focused on core values and strategic planning. At a “Town Hall” meeting for faculty held on September 22, attendees learned very little about how the administration plans to deal with the purported budget shortfall, but were repeatedly encouraged to view the situation as “an opportunity” for innovation and strategic growth.  We would like the administration to refocus their comments from all the things they are not doing—and all the things they would like to be doing–to state clearly what budget-cutting measures are being enacted.

It is the position of the NMU AAUP that the NMU Administration has done a very poor job of explaining how the $2.6M short-term budget deficit is being managed. The reason why there so many “rumors” currently in circulation is because there is so little legitimate and reliable information available. The Administration has provided little concrete information about what goals, targets, guidelines, criteria and/or policies are being used to decide what cuts to make.  Lack of clear communication creates an information vacuum that encourages speculation, and gives the impression of indecision, uncertainty, or a hidden agenda.

One advantage of administrative “decentralization” is it accommodates local decision-making, but it also allows upper-level policymakers to deflect responsibility and criticism.  For all the waffling, it is clear that painful decisions have already been made. Most notably, non-tenured faculty, including adjunct, contingent, and term, regardless of degree or qualifications, are being laid off due to the non-renewal of contracts.

Recently we learned that the university has received a $9.4M refund from the MPSERS pension system–a large unanticipated influx of discretionary income.  Generally a windfall (“a piece of unexpected good fortune, typically one that involves receiving a large amount of money”) is good news that would be quickly shared.  For a fuller discussion on the 9.4 million dollar refund and the pension fund obligations, read “The Mysteries of the MPSERS Monies”

At NMU, a portion of the refund would allow us to cover our immediate short-term obligations and still have $6.8 to add to university reserves. Why is the NMU Administration downplaying this good fortune and continuing to implement “necessary budget reductions”? One explanation is that this refund makes it hard to justify a deeper agenda intended to impose austerity budgets and to achieve further faculty reductions.

Therefore, it is the position of the NMU AAUP Executive Committee

  • That it is impossible to proceed with efforts to resolve the “budget deficit,” when the NMU Administration is unable or unwilling to present a coherent plan identifying specific ameliorative measures.
  • That immediate cuts imposed without systematic and strategic review, solely to save money in the short term, run the risk of causing permanent damage to university programs and run counter to the goal of recruiting students.
  • That the current budget deficit can and should be resolved by using some of the windfall refund, and a moratorium on budget reductions be imposed until the end of the current academic year.
  • That a moratorium will allow the time necessary to develop the proposed university-wide program reprioritization process in order to establish clear criteria for program evaluation and future resource allocation.

It is important that administrators are fiscally responsible, and accountable for their decisions.  At NMU, the lack of “transparency” and trust between the upper-level managers and the people who work to fulfill the university’s educational mission has been a problem for a long time, creating a difficult and demoralizing environment.  Currently Northern Michigan University is facing many challenges, and we all need to be part of the solutions.  For these reasons, we encourage the NMU Administration to try again to seriously address these and other issues through sustained engagement with the campus community.

We invite you to comment on how the budget cuts have affected your department or you personally. If you are comfortable sharing this information on this website, you can e-mail our NMU AAUP President Becky Mead at rmead@nmu.edu

NMU AAUP Executive Committee


 

See how Ferris State is using its refund at: http://fsutorch.com/2015/09/30/ferris-receives-18-3-million-refund-from-michigan/

See how other universities plan to use the money:

http://www.lansingstatejournal.com/story/news/local/michigan/2015/10/03/big-refunds-colleges-likely-lower-tuition-bills/73283238/

Other useful links:

“Faculty Fear Job, Course Cuts for Winter 2016 Semester” Northwind, 30 Sept. 2015.

Video of Faculty Town Hall meeting, 22 Sept. 2015: http://mediasite.nmu.edu/NMUMediasite/Play/36540fa2b5f64296b1f1641a9d58e0701d

“AAUP Hopeful Pension Refund Could Save Jobs,” Northwind, 7 Oct. 2015, http://www.thenorthwindonline.com/aaup-hopeful-pension-refund-could-save-jobs/

“Erickson Addresses Packed Town Hall Meeting,” Northwind, 14 Oct. 2015. http://www.thenorthwindonline.com/erickson-addresses-packed-townhall-meeting/

 

 

 

 

NMU Professor Partners with Florida State University to Offer MOOC

StavrosNMULogosLike the printing press, over 500 years ago, the Internet is creating an explosion of shared knowledge. NMU’s Sam M. Cohodas Professor, Tawni Ferrarini is sharing her knowledge with the world by offering NMU’s first MOOC (Massive Open Online Course). Ferrarini helps Associate Professor of Economics Hugo Eyzaguirre direct the Center for Economics Education and Entrepreneurship at NMU, and she has partnered with the Stavros Center for Economics Education at Florida State University to offer the MOOC.

Her MOOC “Common Sense Economics for Life” is based on her co-authored book Common Sense Economics:  What Everyone Should Know about Wealth and Prosperity. There is no cost, and takes CommonSenseEcobetween 10-15 hours to complete. “The MOOC itself is just an appetizer to get people to think about learning more about different aspects of their lives,” Ferrarini said.” So far, over 4,000 students have enrolled in the course in the four semesters she has offered it. “It is incredible outreach, there are so many ways to touch people’s lives now, and you never know when those MOOC points of contact will spill over into your regular courses,” Ferrarini said.

Ferrarini admits that there are a lot of window shoppers in the MOOC world, and only about 4% of those who enroll actually complete the entire course. Nevertheless, she is convinced such online experiences have a place in the future of education. “When you look at the brick and mortar institution and the challenges it faces, you know that transformation is under way, and we are either going to be riding the wave or be drowned by it,” said Ferrarini. “Competition in my world is a good thing. When I see other people succeeding, I have a tendency to ask what are they are doing and how can I learn from it. So, I think it’s a good thing we are being challenged to think about how we are reaching our multimedia students.”

MOOCs do allow for tremendous reach, and her “Common Sense Economics for Life” course has drawn interest from people around the globe. Their experiences vary, and their perspective influences their interactions with course materials and resources. “A man in Venezuela commented about the challenges of having to account for rampant inflation and 90% spike in market prices when putting together a monthly budget. A woman in Syria noted her difficulty in leaving her country to seek economic and political stability. Doing so could be life threatening. So, shopping for a steady local government by voting with her feet was not a viable option in Syria which is the case in the U.S.,” Ferrarini said. U.S. students, especially those living in the remote U.P., can use their MOOC experiences to broaden their understanding of how social, political, business, and economic considerations act and interact to influence decisions by individuals, by sectors or groups and nations. This, in part, helps explain why some nations prosper and individuals make different consumption, investment, and saving decisions across households, states, countries, and time.

Ferrarini reviews her course. It is currently the third ranked MOOC on Canvas.
Ferrarini reviews her course. It is currently the third ranked MOOC on Canvas.

In 12-15 hours over any period prior to December 31, 2015, anyone who completes the Common Sense Economics MOOC receive four badges if they earn 80 percent or higher. The Key Economic Elements, Why Some Nations Prosper, Economics of Government, and Financial Fitness badge can be referenced on a resume or posted on LinkedIn or other social media accounts. “The badges may mean little to us who are used to thinking about full degree programs, but to the people who are a part of different global collaborative networks like GitHub, badges do have significance,” Ferrarini said. She also pointed out, “This experience is intended to offer a personal complement to the accredited college campus experience.  It is not a substitute.”

On the for-credit front, Ferrarini and her colleagues in NMU’s Economics Department offer both seated classes and online classes. The Departments minor has been online since 2000. Ferrarini uses the same materials in both offerings. The only difference is how she interacts with students. Ferrarini believes there is still value in the “chalk and talk” method of presentation, but she also recommends faculty consider expanding into online instruction. “You don’t have to know everything about the instructional technology, but you can challenge yourself to make small incremental changes by working with NMU’s Center for Teaching and Learning,” Ferrarini added.

Ferrarini hopes her partnership with Stavros Center at FSU will help NMU grow, gain resources and expertise from a center at a Research One institution. FSU Foundation support made the development of the MOOC possible. NMU receives institutional credit for Ferrarini’s digital work, publications, and content development.

Since 2013 Ferrarini, Dr. Eyzaguirre, and other facilitators have hosted more than twelve Common Sense Economics for Life workshops involving over 200 high school teachers. Ferrarini estimates these workshops will impact over 50,000 students.

Ferrarini feels NMU is a great place because it supports professional growth, development and collaborations with other universities that can help attract, retain, and create new student opportunities at NMU.

Faculty, staff, students and friends of NMU are invited to join and complete the CSE MOOC. Register here. Faculty interested in assigning the MOOC as bonus work can contact Dr. Ferrarini at tferrari@nmu.edu.

What We Know About the 9.4 Million

We know that NMU along with six other public universities in Michigan have received multi-million dollar refunds from the Michigan Office of Retirement Services. According to published reports, MORS overbilled these universities on their pension payments for employees who were enrolled in the Michigan Public School Employees Retirement System.

Six of the Seven universities are (except Ferris State) are stuffing all of the money into reserve accounts or their investment portfolios.

University administrators at all seven institutions have known about the refund since July. For reasons not yet fully explained, the announcement was not made public until October 1.

Despite knowing about this windfall in July, the NMU administration cut the budget for Academic Affairs by 1.5 million, to help patch a 2.6 million dollar deficit. This has resulted in faculty being laid off, as contracts are not renewed. These layoffs were highlighted in a presentation given by the administration’s Finance Committee to the BOT back in September.

NMU administrators say we have a 40 million dollar pension liability extending to the year 2036, and all of the 9.4 million needs to be devoted to this. As the NMU-AAUP pointed out in several recent news articles, the funds are actually unrestricted, and NMU can do whatever it wants with this unexpected infusion of money.

Nevertheless, it is true that a 40 million dollar pension liability is on NMU’s books. New reporting requirements and changes in state laws mean NMU must report this liability on their Statement of Net Assets (Balance Sheet) and NMU also must report an annual pension “expense” on their Statement of Revenues and Expenses (Income Statement). It is important to note that “expenses” and “liabilities” are different animals even though they sound basically the same.

The view of Assistant Accounting Professor and NMU-AAUP data analyst George Wilson is that we can set aside a portion of the 9.4 million dollar refund to cover the annual pension “expense.” However, he advises that it would be nearly impossible for NMU to cover the “liability” with $9.4 million in current dollars.

According to Wilson, NMU currently pays about $5.2 million per year to MPSERS for retiree benefits, retiree health care, and to cover the unfunded liability.  He added, “We are currently halfway through the 40 year period where NMU will no longer need to contribute to MPSERS.  The cash outflow each year has been steadily increasing, but it ought to peak and begin to fall at some point in the medium-term future.”

Based on this information, the NMU-AAUP recommends that a portion of the 9.4 million dollar refund be used to limit adverse short-term effects on class sizes and staffing. According to NMU-AAUP President Becky Mead, many contingent instructors are fearful they will not be renewed. “The administration has been evasive about how these extensive cuts are. What is clear, however, is that painful decisions have already been made and people are being laid off due to the non-renewal of their term contracts,” Mead said.

Please comment on whether you support a hosting public meeting to discuss how to use the 9.4 million dollar windfall. Also please share what you know regarding staffing cuts or increases in enrollment caps for classes in your department.

Other related articles:

See how Ferris State is using its refund at: http://fsutorch.com/2015/09/30/ferris-receives-18-3-million-refund-from-michigan/

See how other universities plan to use the money

http://www.lansingstatejournal.com/story/news/local/michigan/2015/10/03/big-refunds-colleges-likely-lower-tuition-bills/73283238/

Article from Mining Journal, October 6th

http://www.miningjournal.net/page/content.detail/id/627313/NMU-faculty-union-wants–9M-applied-to-deficit.html?nav=5006

The Mysteries of the MPSERS Monies Explained

 

NMU Faculty Union Reacts to $9.4 Million Refund

It’s not every day that $9.4 million dollars drops into your lap, but that is exactly what happened to Northern Michigan University last week. The money is being returned to the university coffers as a result of pension system overpayments in prior years. This refund comes from the Michigan Office of Retirement Services which recently discovered that it had unintentionally overbilled NMU and six other Michigan public universities since 1997. The funds are unrestricted in how they can be used meaning that university administrations will have to decide how to best use the refunds. In an article published October 2, in the Mining Journal, NMU President, Fritz Erickson was quick to point out this sudden infusion of money is not going to change the administration’s view of the current budget. “It is important to understand that the funds being returned are not a windfall. They will need to be held in reserve and used for meeting our future MPSERS obligations,” Erickson said.

While the NMU administration appears poised to set aside all $9.4 million to cover pension obligations over the next twenty years, Assistant Professor of Accounting and NMU-AAUP Data Analyst George Wilson estimates that only a portion of the refund would be needed to completely cover NMU’s additional pension expenses associated with recent changes to pension reporting and payments for Michigan universities. “This refund was completely unexpected and is brand new dollars that can be used for an array of immediate and future needs. These funds represent a reprieve from the present deficit and should give the university time to make careful decisions about staffing, course offerings, and the range of experiences and opportunities we are offering to our students.  We no longer need to rush into permanent structural changes when we now have the resources to solve what should be a short-term enrollment issue.”

The Executive Committee of NMU’s Chapter of the American Association of University Professors have endorsed Wilson’s comments calling them an accurate and articulate assessment of the present budgetary state of the university.

The $9.4 million refund arrives during a period in which the NMU administration had projected a deficit of $2.8 million for the current fiscal year.