Some facts to consider at YSU
It appears the contract negotiations between Youngstown State University and the union representing the faculty have reached an impasse, which means the next step is fact-finding.
It is inconceivable that in the midst of a national economic recession and a state economy that has been roiled by the loss of hundreds of thousands of manufacturing jobs, there could be labor strife on a public university campus.
If anyone should understand the ramifications of a collapsing economy, it should be the learned among us.
And yet, it seems that members of the faculty are unwilling to acknowledge that significant cuts in spending are necessary in order to address the budgetary shortfall caused by a decrease in state funding.
YSU officials have said that even with a 3.5 percent tuition increase, the institution would still face a deficit in fiscal 2011-12.
Because employee costs account for about 80 percent of the operating budget, it doesn’t take a rocket scientist to figure out what must be cut.
It’s a given — at least from the vantage point of private-sector taxpayers — that there will be no raises in the new three-year contract. But that isn’t enough.
The administration reportedly wants employees to pay a higher percentage of the health-care premiums and also agree to changes in some of the work rules.
Boondoggle
For example, the current payment schedule for summer school is a boondoggle for professors, who get paid a percentage of their annual salaries, as opposed to a flat rate.
Likewise, the extended teaching program, which guarantees a certain number of hours for professors who retire, is a windfall that the university can ill afford.
But rather than agree to change these costly items, faculty negotiators are supposedly eyeing the university’s reserve funds to counter the administration’s claim that the budget is dripping red ink.
They apparently believe that if a fact-finder is brought in, money in reserves will be in play.
It is, therefore, necessary to provide a brief history of why Ohio’s public universities and colleges maintain such funds. In 1997, Senate Bill 6 became law to increase the financial accountability of institutions by using a standard set of measures to monitor the health of universities and colleges. The measures are made up of three ratios of the reserves to the general fund.
If an institution’s composite score of the ratios falls below a certain level, it can be placed in fiscal watch.
At YSU, the operating reserves total $8.5 million, while the physical plant reserves total $5.07 million.
SB6 was a response to the financial collapse of Central State University.
Legislators made it clear that institutions of higher learning would no longer be permitted to operate on the financial edge.
The reserves also affect an institution’s credit rating, which is important when borrowing money.
The bottom line is that YSU’s reserve funds are needed to not only meet the requirements of state law, but to support operating emergencies that could result from a sudden decline in students or an unforeseen spike in expenses.
Accumulated debt
Employees should disabuse themselves of the notion that there’s money available and, therefore, no concessions have to be made. YSU’s accumulated debt is about $100 million, which includes the recent $60 million bond issue. Of that, $20 million will be spent buying the Courtyard Apartments.
The annual debt service is about $5 million.
Those are some of the facts the administration must make known to the fact-finder.
YSU’s decision to raise tuition for the 2011-12 academic year, after tuition was increased for the 2010-11 academic year, may be justified, but it doesn’t seem right in the context of the employee contracts of the past three years.
The faculty, classified employees, professional staff and administrators received pay raises and other rewards.
The students, on the other hand, were hit with higher tuition and other fee increases.
State funding for higher education is being cut and universities, and colleges are being told to develop less costly ways of operating.
YSU President Cynthia Anderson and the trustees are moving in that direction. Will the employees follow?