Union issues report on CU system's approach to budget cuts

Daily Camera - 5/25/2021

May 25—United Campus Workers Colorado on Monday released a report on the University of Colorado's approach to budget cuts during the coronavirus pandemic, calling on system leaders to rethink budget priorities and on state lawmakers to prioritize funding for higher education.

The 28-page report from the union criticized CU's approach to managing the budget amid state funding cuts and revenue declines caused by the pandemic. The system instituted pay cuts, furloughs and layoffs across its four campuses, in addition to spending down reserve funds to make ends meet.

The union report criticizes CU leaders for using the system's limited funds for capital construction projects and debt payments.

"In the wake of the COVID-19 pandemic, CU chose to increase its investment portfolio and maintain debt service payments while making cuts to worker pay — all while faculty, staff, and students were working more hours to adjust to the pandemic," the report states.

The report also criticized CU for issuing new debt during the pandemic while making budget cuts that "deeply impact the quality of education CU is able to provide its students and CU's ability to provide a living wage to its employees."

The new debt issued in 2020 was for ongoing projects, including a health sciences building at the Anschutz campus and construction on CU Boulder's engineering building, said system Chief Financial Officer Todd Saliman. CU also refinanced debt in 2020 to shift debt payments into the future and provide relief during this year and next year, avoiding deeper budget cuts, Saliman said.

"The health sciences building is very much underway, and we didn't consider stopping the project," Saliman said. "That would have resulted in massive job loss for those who were working on those projects ... (and) it's part of delivering the health sciences mission at CU Anschutz."

The report states that "not paying debt is an option that should be considered when budgets are tight." That's not an option CU leaders considered, Saliman said.

"That would have severe, long-lasting impacts on the university and the students we serve," Saliman said. "It would absolutely have a negative impact on our credit rating, which would increase our cost for debt, which would mean we'd have to pay more money on interest instead of putting money into students, faculty and staff."

But United Campus Workers Colorado is arguing for a fundamentally different way of funding higher education in Colorado, said UCWC Vice President Tracy Berger.

Union leaders declined to state how many members it represents across the CU system, instead describing the membership as hundreds of people across all campuses and job classifications.

"If higher education in Colorado and nationally was funded the way public higher education should be funded, a credit rating would have absolutely no impact on our students. It shouldn't have an impact on our students," Berger said.

"Public education should be publicly financed is the main argument we're trying to make. We should not be making decisions based on what these credit rating agencies and financial agencies want from us," Berger continued.

The union report highlights that Colorado is among the lowest in the country for higher education funding per full-time student. While American Association of Universities institutions received an average of 23% of revenue from state funding, CU received 6% of its budget revenue from the state.

"While CU needs to reevaluate its budgeting priorities, the State of Colorado certainly needs to as well," the report states. "Increased state support for public higher education is necessary to provide quality, equitable education to Colorado students, and to avoid CU and other public institutions being privatized by external financing."

CU system leaders will continue to look at how they responded to the crisis of the coronavirus pandemic, Saliman said, and to learn lessons from it.

"I'm proud of how the university responded to the pandemic. I think the faculty and staff rallied in a difficult time to deliver a quality product to our students, and I think our students rallied in a challenging situation as well," he said.

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