Regents declare financial exigency; consider structural options
July 22, 2019
On a vote of 10-1, the Board of Regents approved a declaration of financial exigency for the University of Alaska. This difficult decision is a direct result of a massive
$136 million (41 percent) reduction in state funding, projected additional losses
from declining enrollment and reduced research activity, and the lack of sufficient
reserves to fund our current operations through the year.
“Given the poor hand we’ve been dealt, financial exigency is the only tool for us.
It will allow us to prepare a plan for continuing our mission,” said UA President
Jim Johnsen. “None of us wants to be here today, and as I look at the faces of our
students, faculty and staff - their anxiety and their loss - I wonder, how can our
university, something so great, that has been built up by so many for so long, be
crippled by so few so quickly.”
“We will not have a university after February if we don’t make a move,” said Regent
Board of Regents' Policy and University Regulation 04.09, provides for the declaration
of financial exigency when there is a shortfall in projected revenues compared to
projected expenditures over the same period; and, the imbalance will have a material
adverse effect on university operations. Financial exigency allows rapid downsizing
of units, programs, services, and personnel to address a fiscal crisis.
The board also discussed two options for further consideration: a lead campus model,
and a single accreditation model. Though administrative reductions may proceed more
quickly, the Board asked for more detailed information to be presented at its meeting
on July 30. Specific programmatic reductions will be proposed at the board’s September
After deciding on programmatic reductions in September, notices to affected faculty
and staff would be distributed shortly thereafter and work would begin to address
the “teach-out” responsibilities of the university owes to affected students. Either
approach will require close cooperation with the Northwest Commission on Colleges
and Universities (NWCCU), the organization that provides UA campuses institutional
accreditation. Maintaining institutional accreditation is of paramount importance
for the university.
“We have to start by looking at our enrollment,” Johnsen said. “We have 26,000 students,
with various majors, in multiple locations. How do we organize and resource ourselves
to meet their needs?”
The UA community will have the opportunity to provide public input to the Board of
Regents on reductions throughout August and early September, before the board takes
action to approve programmatic reductions at its September meeting.
Message to UA Community - July 22
Dear UA Community,
Today, on a vote of 10-1, the Board of Regents approved a declaration of financial
exigency for the university. This difficult decision is a direct result of a massive
$136 million (41%) reduction in state funding, projected additional losses from declining
enrollment and reduced research activity, and the lack of sufficient reserves to fund
our current operations through the year.
It’s important that we all understand what this declaration is and what it is not. As discussed with the regents, the declaration of exigency is a tool, not a plan, to implement necessary reductions to meet the budget shortfall in a timely manner. The declaration can be modified or cancelled if the legislature and the governor are able to successfully restore funding.
After thoughtful discussion, the board directed me to work with the chancellors and academic leadership to prepare high level plans for restructuring the university. The two plan options chosen for additional consideration by the board include a lead campus model and a single accreditation model. The regents will meet again next Tuesday and, based on the additional information, provide direction on a structure for the university system moving forward.
From that point until the next board meeting in September, the university community will have an opportunity for input on each option, with final decisions by the regents on September 12-13. Until then, little or no academic changes will take place -- no campus closures or interruptions to the fall student schedule.
Your voice in advocating for the university continues to be critical. Unfortunately, as of today the legislature has failed to restore funding reduced by the governor’s veto or to return funds - including the Higher Education Investment Fund that supports the Alaska Performance Scholarship, Alaska Education Grant and WAMMI funding - that were “swept” into the Constitutional Budget Reserve. But there is still some hope for further funding.
As always, thank you for your hard work, your dedication to the university, your patience, and your perseverance during these extremely difficult times.