Financial Shenanigans, Florida Style

(UFF-FAU Preface: Coming from the nationally-respected AAUP (American Association of University Professors), this post shines a light on continued unwise financial decisions by Florida’s Legislature and Governor, especially in higher education.  In addition, the misplaced budget priorities reflected in this year’s state allocations to New College, USF and elsewhere, valuing major (and money-losing) sports over the core educational missions of these universities, are reminiscent of similar decisions made a decade or two ago  resulting in huge borrowing for a little-used FAU football stadium while basic faculty and student needs continue to go unmet.)

6/16/2023
BY HANK REICHMAN
Academe Blog

The recently released preliminary report of the AAUP’s special committee to review an apparent pattern of politically, racially, and ideologically motivated attacks on public higher education in Florida, which I am co-chairing, concludes that “academic freedom, tenure, and shared governance in Florida’s public colleges and universities currently face a politically and ideologically driven assault unparalleled in US history.  Initiated and led by Governor Ron DeSantis and the Republican majority in the state legislature, this onslaught, if sustained, threatens the very survival of meaningful higher education in the state, with the direst implications for the entire country.”  The report finds, among other things, that the state’s academic administrators “not only have failed to contest these attacks but have too frequently been complicit in and, in some cases, explicitly supported them.”

Although on balance administrators’ behavior seems “more cowardly than cautious,” the report acknowledges that they could also be “fearful that their institutions might suffer devastating retaliatory budget cuts from a governor and legislature that have demonstrated repeatedly their willingness to act vindictively toward critics.”  Judging from actions taken by the Disneyphobic governor this week, such fears may be justified.  On June 15, the governor announced over $500 million in line-item vetoes to the state’s $117 billion budget.  Though that was considerably less than the $3.3 billion in cuts he made last year, it still included more than $120 million in cuts to higher education, almost a quarter of all funding killed by line-item veto:

The Governor nixed $20 million for a nursing school at University of South Florida’s Sarasota-Manatee campus.  The University of Florida lost $11 million for an Academic and Research Center.  And the Governor axed more than $11.2 million earmarked for a Student Achievement Center at Florida Polytechnic University in Lakeland.

Florida State University lost out on $4 million in expected funding for a Hydrogen Research Center.  Additionally, the Governor disposed of $34.1 million set aside for a STEAM Complex at St. Johns River State College and an addition to the Palatka campus.  …

The Legislature budgeted $16.2 million at Polk State College for the first phase of its Northeast Ridge project.  Florida Gulf Coast University in Fort Myers had anticipated $14.5 million in funding for renovations at Reed Hall, a classroom building.  The University of West Florida expected $5 million for tearing down its Southside Residence Halls, which have been closed since 2017.  All of that was vetoed.

South Florida State College also lost out on $500,000 for a new swimming pool.

Private institutions were also not immune:

The Governor killed $400,000 going to Florida Career College for assistance for student expenses.  Some $400,000 for an advanced nursing lab and simulation center at Herzing University in Orlando met an end.  And $500,000 for the Miami Media School, intended for a scholarship program, was slashed by DeSantis.

St. Thomas University in Miami Gardens had $500,000 in the budget for its Institute of Law, Liberty & Civics that failed to make the grade.  DeSantis also vetoed $250,000 for a health science building at Webber International University in Babson Park.

As the Tampa Bay Times pointed out, “Fiscally, DeSantis didn’t have to cut anything.  Booming tax revenues and billions of dollars in federal aid have allowed lawmakers and DeSantis to spend freely while assigning a record $15.3 billion to reserves.”

Particularly noteworthy among the vetoed items is the cut of $20 million for the University of South Florida’s (USF) Sarasota nursing campus, the biggest item in a $30 million list of cuts to Sarasota-based programs.  This was seen by many as a vindictive slap at Sarasota state Sen. Joe Gruters, a former chairperson of the Republican Party of Florida, who endorsed Donald Trump over DeSantis for president.  “The governor is clearly upset I endorsed Donald Trump for President,” Gruters said in a text, “and so he took it out on the people of Sarasota County.”  In March, Sydney Gruters, the senator’s wife, was named to head the New College Foundation, despite having no previous experience in higher education or fundraising.  The governor’s final budget does include some $34 million in new funding for the previously resource-starved New College, which DeSantis’s hand-picked board now seeks to remake into a conservative bastion modeled on Hillsdale College, a private conservative Christian school in Michigan.  It also includes $30 million for the new Hamilton Center for Classical and Civic Education, a conservative think tank of suspicious origin at the University of Florida that has sparked widespread concern among faculty.

Some of the funding earmarked for New College is dedicated to a much-expanded athletics program, initiated by interim president Corcoran.  The college, which previously had only a few student-led intramural club sports, has set in motion plans to add intercollegiate programs in baseball, softball, men’s and women’s basketball, and men’s and women’s soccer.  Indeed, given these plans and other rumored initiatives — not to mention the inflated salary promised to Corcoran — one wonders how much will be left from the budgeted funding increase for the academic program, or at least what remains of it.  (For more on New College see the preliminary report, pages 3-7.)

Speaking of athletics, USF may have to wait for the state to fund its Sarasota nursing program, but this month the university’s trustees took a bold step when its board approved a $340 million plan to construct a new on-campus football stadium.  To pay for the structure, the board authorized borrowing $200 million over 20 years at an expected interest rate of 5.5%.  The other $140 million will come from:

• $50 million in donations through the school’s fundraising arm, the USF Foundation

• $31 million from the capital improvement trust fund (which pays for facilities through student fees)

• $59 million from the sale of broadband equipment and licenses, administrative overhead and transfers from campus-wide auxiliary funds like parking, food services and the bookstore — in other words, mystery money.

What could possibly go wrong?

A lot, fears Faculty Senate chair and trustee Jenifer Jasinski Schneider, the sole vote against the project.  She notes that the price tag does not include the $18 million USF expects to spend to move intramural fields from the stadium site, or $26 million in infrastructure and safety updates.  “I know that’s not the end…” said Jasinski Schneider, citing future expenses like utilities, technological updates and security.  “It’s a huge endeavor.  We’ve built buildings, but not something like this.”

Schneider was giving voice to widespread faculty concerns voiced at a May senate meeting.

“It seems to me like the dangers outweigh the positives,” said Brian Connolly, the Department of History’s chairperson and Faculty Senate vice president.

Faculty concerns stem in part from the university’s recent financial issues.  In 2020, USF announced $93 million in budget cuts and a plan to phase out undergraduate programs in the College of Education (though some of the decisions were reversed).

“I’ve been watching faculty afraid they’re going to lose their jobs because of budget problems for years now…” said Richard Manning, an associate professor of philosophy and the Faculty Senate secretary.  “And then to be told we’re going to go $200 million in debt and spend another $140 million on a stadium to support our (1-11) football team?” …

Connolly said the building that houses his department is in “disrepair,” so he’d rather see capital funds go to to new academic buildings or a library that supports USF’s ambitious research goals.

“They’re not going to take a loan out to hire more faculty,” Connolly said.  “They’re not going to take a loan out to … build or repair old academic buildings.

“I worry the emphasis on a football stadium will detract from those kind of things.” …

“Of course the suspicion is — look, this a vanity project for the board of trustees,” Manning said.  “It’s not really going to further the central academic mission of the university.  And, moreover, it smells like pork because somebody’s going to make a ton of money on this project, right?  And the economic, let alone the academic, benefit to the university is completely speculative, at best.”

These concerns found validation, even amplification, when the Tampa Bay Times asked three prominent sports economists for their assessment.  All three doubted whether the project would generate enough income to cover projected debt payments.  In the 2021-22 fiscal year, the team brought in $18.7 million in football-related revenue, while playing in the much larger Raymond James Stadium, home of the NFL’s Tampa Bay Buccaneers.  That means the new, smaller stadium must essentially double the team’s revenue if it will pay for itself.

“It’s just not obvious at all to me that this new stadium will generate an extra $17 million a year in revenue versus their current situation,” said College of the Holy Cross economics professor Victor Matheson, past editor at the Journal of Sports Economics and co-author of The Economics of Sports.  “I don’t know if I’d call it economic malpractice,” Matheson said. “but it’s pretty close to it.  You’re throwing $350 million on something that you know is going to lose money for you under almost any scenario,” Matheson added, “with a small percentage chance that you end up losing less.”

The state government-led assault on academic freedom, shared governance, and educational quality in Florida — part and parcel of the larger “anti-woke” agenda cynically promoted by the governor and his minions at the expense of immigrants, racial and gender minorities, unions and educators at all levels — is and should be at the center of our attention.  But one can’t ignore the persistence of the sort of damaging financial shenanigans to which faculty members everywhere have, alas, become too well accustomed.

Contributing editor Hank Reichman is professor emeritus of history at California State University, East Bay; former AAUP vice-president and president of the AAUP Foundation; and from 2012-2021 Chair of AAUP’s Committee A on Academic Freedom and Tenure. His book, The Future of Academic Freedom, based in part on posts to this blog, was published in 2019.  His Understanding Academic Freedom was published in October, 2021.  He is co-chair of the AAUP’s special committee on academic freedom in Florida.