Monday, April 18, 2011

Johnson releases old document on budget surplus!

Here's a post likely to be a great hit. It's something I wrote back in March, thinking the FA would release another White Paper thing. But it never saw the light of day--funny, but I suppose there were some people who thought that there wasn't much demand for a multi-page account of the 2010 budget surplus and its impact on FY 2011.

But I'm sure the document will reach thousands of readers here.  Keep in mind that it was written in March, and while others on the FA looked over drafts, it is not an official FA document and thus shouldn't be taken to express the considered views of that august body. 

Furloughs in a time of surplus


  1. Good analysis. Thanks!

  2. You are only showing your lack of understanding of a university budget by these claims of surplus. It represents a point in time whereby these dollars will eventually be used up by outstanding obligations and committments such as outstanding purchase orders and/or bond payments. The money is not available for your salaries.

  3. This in response to the second anonymous comment: Well, gosh, the budget is difficult to understand, and I'm not an accountant. But let's try it this way: if a budget surplus reported in the official end of year report (and confirmed by the official audit of the university system) doesn't show a good fiscal situation, just what would it take to show you that the budget is in good shape (or bad shape)?

    Of course the university has outstanding obligations and commitments, but unless it was failing to meet those commitments during the past year, we managed to accumulate a surplus while meeting our commitments. Yes, we will need to continue paying what we owe, but we will continue to take in money as well--and while one can't judge future returns from past performance, last year's surplus would seem to indicate we're not in danger of failing to meet our obligations.

    Or do you have reason to believe that the university has, during the current fiscal year, entered into major new purchases or bond commitments that we will have difficulty meeting with the revenue stream that allowed us to accumulate a surplus last year?

    That would indeed result in a possible deficit this year. It would also reflect extraordinarily imprudent budgeting on the university's part, or, more likely, a decision to reallocate priorities from employees to, say, buildings. In this case we would be using furlough money to meet an artificial "shortfall" that really reflects a change in priorities, from faculty and staff to something else.

  4. Isn't the salary SIUC agreed to pay me an "outstanding obligation"? -MS

  5. Dave,

    My paranoia is getting to me. Have you been seeding articles for the Chronicle?

    "At the same time, it often seems as if the financial crisis is being used as an opportunity to force (or to complete) fundamental changes in the employment conditions of higher education, as well as a chance to limit access to higher education by slotting more and more students into high levels of indebtedness."

    "And it can be eye-opening to be told during budget presentations one fall that cutbacks are absolutely necessary, only to learn at the end of the fiscal year that the institution actually substantially increased revenues."


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