University departments adjust to budget cuts
‘Bottom-line budgeting* forces lay-offs, reorganization
By Eric Onstad
Staff Writer
In his budget message last week, Cornelius Pings, senior vice president of academics, identified six academic departments burdened with “extraordinarily severe hardships” as a result of cuts in next year’s budget.
“It is painful, indeed, to tell good colleagues that programs that we have nurtured through the years must be reduced in scope,” Pings said in his message.
“But I have conveyed to those deans and directors — and I wish to say to all of you today — that we are faced with a severe problem which cannot be ignored.”
The "severe problem,” however, varies greatly among these six departments.
While the deputy director of the Institute of Marine and Coastal Studies will be streamlining his operation by “replacing 50-w'att light bulbs with 25-watt ones,” the director of the Gerontology Center anticipates “some arm-wrestling” to recover a cut of almost Si million, one-f’fth of his entire budget.
Of the six departments, only two. gerontology and public administration, face major cuts in the $1 million range. The loss of funds is forcing massive reorgnizations. staff and faculty layoffs and in one case, elimi-
nation of an entire program.
Two other departments, continuing education and library and information management, were not hit as hard but face some reorganization, and the last two, the Annenberg School of Communications and the Institute of Marine and Coastal Studies, are being cut in support services only.
John Curry, budget director, cited three basic reasons for the cuts in the six departments: declining enrollment, declining research income and a long history of overdependence on university income.
These three categories of financial difficulties are, in many cases, caused by a general pattern of decreased government spending accented by cuts from the Reagan administration.
The School of Library and Information Management experienced a drastic decline in enrollment following the passage of Proposition 13 and the subsequent decline in governmental support for public library systems.
The School of Public Administration maintained the same support as last year from the university administration; it was the administration in Washington that withdrew Si million in federal support that the university could not make up.
“The university is standing
New Coors brew gushes into American beer bellies
By Marc Igier
Staff Writer
Those sturdy individuals from the Adolph Coors Company came downstream from their high country retreat Monday, bringing what they feel will be a new taste to the palate of the American beer drinker.
George Killian’s Irish Red Ale, a recipe which has been in existence since 1862, made its entrance into the American beer market Monday, and Coors officials were predictably gushing with excitement over their latest alcoholic acquisition.
“This is really sort of the fulfillment of a dream for us. We've been w'orking on this brew for over three years now. It should be very popular,” said Peter H. Coors, senior vice president for sales and marketing, while going through his promotional routine for the
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very faithful,” said Robert Biller, dean of the school, "but it (the university) is in a difficult situation as well.”
The recent slashes in federal government spending have directly affected this school which trains students and researches theories for government service.
The school got some firsthand experience in the nationwide trend of reduced government spending, which is a “major research interest” of many faculty, including Biller.
“It’s like being on a roller coaster going around both curves,” he said. “The bottom dropped out on some things but new things are being invented. It has been a period of intense and creative energy.”
Half of the federal cuts were made up in new income programs, while the other half of the reductions were managed through expenditure cuts within the school, which "are coming very hard,” Biller said.
Seventeen staff positions had to be eliminated and some staff members are shifting to 80 percent part-time loads. Next year, many faculty members w'ill teach, on a voluntary basis, extra classes that would have been cut otherwise.
The school’s only program that had to be totally eliminated is the Environmental Management Institute, which is being dismantled because the federal Environmental Protection Agency budget “has had (Continued on page 3)
This is the second in a series of articles focusing on university financial problems.
Volume XCI Number 62
University of Southern California
Tuesday April 20, 1982
Task force releases six-point plan to offset financial aid cuts
GEORGE KILLIAN LETT
By Charla Foster
Staff Writer
University administrators released a six-point game plan Friday that may offset President Reagan’s move to cut student financial aid in half during fiscal year 1983.
In a Federal Student Financial Aid report to President James H. Zumberge, James Appleton, vice president of Student Affairs, and several other administrators recommended that the university adopt the six-point plan in order to deal with the proposed 52 percent reduction in student aid.
The report, compiled by Zumberge’s Special Task Force on Student Aid, focused upon selective issues that administrators deemed most important to consider, the vice president said.
Among the six recommendations, communication ranked first. The administrators suggested that the university alert its own schools and departments, as well as the public at large, of the federal budget cuts’ impact on both the administration and students.
“If the proposal is passed, the impact will be staggering," Appleton said.
“Even if we accept the fact that we have to go out and substitute the lost revenues with private funds, it still would not be acceptable.”
If implemented, the proposed cut would eliminate approximately $18 million or 25 percent of the university’s current student aid budget.
Financial aid at the university amounts to approximately $60 million — 40 percent of the total budget and half of what the university receives from the federal government through various programs.
In addition to communicating these and other statistics to its constituencies, the report suggested that the university maximize its marketing operations for student recruitment.
An increased population of students who can meet college costs could add to tuition income and offset lost federal funds, the report said.
In line with the university’s proposed 1982-83 budget, the third proposal consists of a "vigorous new effort” to generate endowment support from the private sector. If sufficient, the new revenues could counterbalance one-for-one the anticipated loss of federal and state tuition subsidies, the report said.
Administrators also suggested that the university should actively promote and expand upon the recently adopted Tuition Prepayment Plan — a program that enables students to pay for four years tuition at a fixed rate.
Lastly, the university should join other independent universities in strategies designed to maintain maximum funding levels during infla-
tionary periods, the report said. In pooling the various strategies together, the administrators expect that private institutions will survive a troubled economy until they become financially independent from federal funds.
In addition to the proposed six-point policy, administrators recommended that the university lobby against the Reagan administration's elimination of graduate students from the Guaranteed Student Loan (GSL) program, as well as protest complete nullification of the State Student Incentive Grants.
Additionally, administrators encouraged the university to continue and possibly expand upon the College-Work Study Program, to support programs that will provide federal tax incentives for private endowment funds, and to implement programs that will ensure that students and administrators manage available funds in an effective manner.
In an effort to offset lost federal loans, administrators also proposed the Internal Loan Fund Borrowing plan — a need-based loan program sponsored by the university. According to the report, the fund would help close the gap between loan availability and need and would be based on a formula similar to GSL requirements.
“Administrators are really working on this program because it would enable students to pay fairly low interest rates,” Appleton said, adding that the university would use quasi-endowment, or liquid funds to establish the program.
“Rather them pick up the interest by money on investment, the university would pick up an interest percentage from students,” he said.
“The return may not be as high, but we believe that students are a good utilization of our investment funds.”
In addition to other self-help strategies, the task force implicitly stated in the report that the university will survive the federal budget cuts, Appleton said.
Appleton said the report also recommends that the university should make other positive suggestions to the government, many of which represent a compromise.
The vice president said that, under the report’s advisement, administrators will ask government officials to allow universities more time to adjust to the budget cuts, once implemented.
“What we wanted to portray here was some positive ways to deal with the budget, as well as the message that there will be no doom and disaster," Appleton said.
“The budget cuts may be staggering, but we genuinely believe that the university has the strength to support itself through this period.”