OSU Is Not in Crisis
Much discussion in higher education during the pandemic has revolved around colleges’ and universities’ struggles to survive financially. Some schools will undoubtedly be hit hard. But schools vary considerably by type (e.g., small liberal arts college vs. state flagship) and in their financial operations. OSU is in a strong position to weather the pandemic without dramatic cuts to its educational mission and employee wellbeing. We believe all faculty and staff should understand this true state of affairs because the current “crisis” is being used, or could potentially be used, for multiple reductions in salaries and jobs and for reorganization of academic programs.
OSU’s financial strength is also imperative public knowledge for the benefit of students and families facing real economic challenges during the pandemic.
1. OSU has over $9 billion in cash and investment reserves. Reserves are entirely separate from endowment. In their June 2020 financial reports, the credit-rating agencies Moody’s, Standard & Poor’s, and Fitch Ratings all emphasize OSU’s substantial liquidity. In the coming fiscal year (FY21), OSU could spend down its reserves by up to $2 billion—well in excess of its projected revenue declines in FY21—and still maintain its excellent credit ratings. Moody’s indeed expects OSU to operate in this way in response to the pandemic. See the university’s “Credit Ratings and Reports” here. Over $4 billion of the university's net assets are unrestricted.
2. Graduate-student employment positions are being cut, and there are virtually no plans to compensate for current disruptions to their programs of study. Graduate students carry out a considerable amount of the academic work at OSU. They serve as teachers and in paid research and administrative positions, but some of those positions are now being eliminated in Arts and Sciences, the OSU’s largest college. Additionally, the pandemic has hindered students’ abilities to conduct research, but OSU’s Graduate School has announced only a very limited measure to help tide them over, the “Matching Tuition and Fee Authorization Program.” This highly competitive program currently provides tuition and fees to only eleven students for one semester, Autumn 2020.
3. Adjunct professors are especially vulnerable to unnecessary budget cuts. These faculty are also crucial to OSU’s mission, teaching many of the university's most important classes. Yet, “contingent” by design, their positions are often the first eliminated in plans to reduce payroll. Job loss, alarming at any time, is even more so now with the current economic devastation in other sectors and the high national rate of unemployment. OSU also makes it impossible for many adjuncts to have employee-provided health insurance to cover them or their families in the event of pandemic-related illness. Find out more about how the pandemic is affecting adjunct professors here and here.
4. Administrators and other top salaried employees (the president, the provost, vice presidents, deans, financial officers, and other senior personnel) have still taken no cuts to their own income. By contrast, leadership at many other schools began volunteering such cuts months ago. These other schools include benchmark institutions and regional institutions such as the University of Michigan, Michigan State, the University of Toledo, and the University of Cincinnati. The lack of cuts is all the more surprising given that OSU administrator salary scale is among the highest in the nation for a public university. In 2019, former OSU President Michael Drake was the fourth-highest paid public university president in the US, taking in $1,415,707 in salary plus other compensation.
5. The university just created a furlough policy that does not require an economic rationale for implementation. This interim policy was created directly by OSU’s Board of Trustees in an extraordinary procedure that bypassed all university governance and rules. It enables furloughs (compulsory periods of unpaid leave) for faculty, staff, and students, either university-wide or unit-specific. Implementation requires agreement among senior administrators, but no approval by or budgetary explanation to faculty governance bodies.
As the policy is currently written, causes for implementation (“Policy Details” II. C.) are worrisomely vague and capacious. These include either events that commonly happen in normal budgetary operations (“significant” interruptions, losses, and new circumstances), or a simple declaration by OSU’s senior administration of “Disaster Leave" (through regular renewal of the university's "state of emergency"), a policy that concerns safety and work roles and has no defined link to the strength or weakness of OSU’s budget. Moreover, the interim policy offers no cap on the number of furlough days, and it potentially curbs benefits by allowing employees to be billed for coverage during furlough (“Policy Details" IV. A.).