On the Budget: Part Two
By Phil Yannella, Professor of English
In an article in the February 2011 Faculty Herald, I wrote about my reading of the academic portions of Temple’s line item budget detail for 2009-10, the last one available in Paley Library. The upshot of my article was that Temple’s budget contained a considerable amount of money that could be wholly or partially cut without affecting our academic mission. My list of such items included $5.3 million in food, travel, and entertainment; $8.7 million in funds devoted to “other general expenses”; $319,486 devoted to “Team Holiday Living Expenses” and $305,700 in “Administration overload stipend” in the Intercollegiate Athletics budget; $11 million in “Incentive Funds” for unspecified people; $3.7 million for consultants, of which $2 million was for legal fees (despite the existence of a
large legal counsel office); $2.2 million for “additional pay” (beyond salaries) in various non-faculty budgets; and $30 million in “University Contingency” funds. Those items total $61.6 million. The largest item, the $30 million “contingency” fund, could go a long way toward paying for the fiscal cataclysm that may soon occur. No member of Temple’s administration challenged my methods or my conclusions. Provost Englert did say that each of the items I highlighted needed to be understood in “context.” He was not more specific than that, nor did he follow up by providing the proper “contexts.”
In this article, I will first describe the sources of Temple’s revenue, then focus on the salaries of our top administrators, the amount of tuition we collect, and the cost of undergraduate instruction.
Temple is “tuition-driven” but also has a few other sources of revenue. In December 2010, the University reported to the State that its total educational and general funds revenue in 2010-11 was about $836 million. $25 million of that came from indirect cost recovery from grants, $21 million came from “other sources,” $186 million was its state appropriation, and $602.8 million came from tuition and fees. Recently, I asked a top-level finance officer how much tuition and fee money was actually paid; he told me that for 2010-11 the final figure was $620.5 million, of which $412.1 million, about two-thirds, was paid by undergraduates.
In my first article, I calculated that in 2009-10 Temple spent about $201 million on instructional salaries and about $89 million on noninstructional salaries in academic areas. I assume that the present noninstructional salary cost is about the same as it was a year ago.
How much of that $89 million is paid to our top administrators? So far as I know, the only way of finding out is by examining the lists of its highest paid administrators that Temple must include in its tax returns. Known as Internal Revenue Service Form 990s, or “Return of Organization Exempt from Income Tax,” Temple’s are available on the website of the National Center for Charitable Statistics (NCCS).The NCCS and a few other organizations serve as public information sites for tax-exempt entities. They receive the returns they post directly from the IRS. Unfortunately, the most recent Temple return filed and posted is the one for 2009 (fiscal year 2008), so the information is not up-to-date.
But even the FY 2008 return gives a reader a picture of how well our top people are paid. Page 35 of that return lists the basic compensation, bonuses, incentive compensation, other compensation, deferred compensation, and nontaxable benefits of our top earners. The list includes President Hart ($630,000), Vice President Bergman ($319,000), Vice President Wagner ($442,000), Vice President O’Rourke ($413,000) Vice President and University Counsel Moore ($447,000), former Vice President and Provost Staiano-Coico ($483,000), and head basketball coach Francis Dunphy ($706,000). Interested readers can also examine the salaries of our highest paid people in earlier years (see p. 18 of 2007, pp. 18-19 of 2006, pp. 46-47 of 2005, p. 34 of 2004, pp. 7 and 22 of 2003, pp. 7 and 21 of 2002, and pp. 7 and 23 of 2001). Some readers might also want to study which people received the biggest salary increases over those years and which received the best golden parachutes after resigning or being dismissed.
Our top administrators are not particularly hard-working, to judge from the report of hours worked per week on p. 51 of the 2008 tax return. They appear not to be the workaholic, hard-driving executives of corporate lore. Their standard work week was 50 hours. Vice President, University Counsel, and Secretary to the Board of Trustees George Moore worked 46 hours per week. Key members of the Board of Trustees are reported to have averaged one hour of Temple work per week.
Top administrators make high salaries, and there has been a great increase in the number of well-paid middle managers across the University. Some elite faculty members have done quite well, too. Universities are in some respects mirrors to the nation, and so it is not surprising to discover that what we might think of as Temple’s middle and lower working classes, the core instructional staff, have been left behind.
One large fundamental truth about instruction at Temple (and elsewhere, of course) is the extent to which our undergraduates are now taught by low-paid adjunct faculty, the extent to which a good deal of the basic work of the University is now performed by poorly paid instructors. The 2009-10 budget detail indicates that in the undergraduate colleges some $10.4 million was spent on adjuncts. That means that at the going price of about $4,000 per course, more than 2500 courses were taught by adjuncts. The “profits” from such teaching are enormous. An in-state undergraduate student in my college, CLA, for instance, pays $11,834 per year for tuition, or $1,184 per course for ten 3-credit courses per year. If there are 30 students in a class, the tuition income for the University is about $35,000, as against an adjunct instructional cost of $4,000. A very nice return on investment!
Of course, it can be argued that there is no real profit, that the so-called profit goes to pay for administration, costly graduate instruction, the high salaries of major researchers, the complex workings of a major university, the great coaching staff, and so forth. That is all true. But why, an undergraduate student might ask, should she have to pay for such things, why should her money be funneled into things that don’t matter to her, why shouldn’t she just, and justly, be charged the cost of her adjunct instructor and perhaps a small part of the heating and electric bill of her classroom? That student might also ask why part of her tuition money should be used to pay the high salaries of people who, arguably, have very little to do with her education, and she might calculate, for example, that the 2008 salaries of the six people listed above (from President Hart to Coach Dunphy) total $3.4 million, a sum which would require the total tuition paid by 287 current state resident CLA undergraduates.
Those are interesting and perhaps devastating questions. One can imagine a giant national student and taxpayer populist protest movement built on them, for most universities now rely heavily on adjunct instruction and pay very high salaries to top people. But let me move ahead to a second fundamental truth about instruction at Temple. That is the relatively stable cost of undergraduate instruction by fulltime instructors in the undergraduate colleges.
Those instructors are represented by TAUP and how much they are paid individually and in the aggregate is annually reported to TAUP by Temple. I asked TAUP’s Member Services Director, Terry Kilpatrick, to provide me with the data for the past several years, and she did: the total TAUP salaries were $91 million in 2004, $92.3 million in 2005, $90.6 million in 2006, $93 million in 2007, $100.6 million in 2008, $106.4 million in 2009, $113.4 million in 2010, and $119.6 million in 2011. By my arithmetic, the TAUP fulltime faculty payroll increased by about 31% between 2004 and the present. The increase was essentially because, to meet the pressure of higher enrollments, the number of TAUP instructors increased from 1104 in 2004 to 1345 in 2011. The average salary of a TAUP instructor increased from $82,427 to $88,922, a total of about 8% over those eight years.
In those same years, Temple has been steadily increasing the amount of money it collects in tuition and fees. The University collected $414.3 million in 2004, $441.1 million in 2005, $473.9 million in 2006, $520.5 million in 2007, and $571.6 million in 2008. All of these figures come from the University’s 990s (see p. 6 of the 2004 return; p. 8 of 2005, 2006, and 2007; and p. 9 of 2008). The 2010-11 tuition revenue was $620.5, as I indicated at the end of the third paragraph above.
The following table describes the growth of tuition revenue as against the relative stability of TAUP salaries:
Total tuition revenue
TAUP aggregate salaries
Here is a quick calculation of the basic cost of undergraduate instruction in 2010-11: Fringe benefits for TAUP faculty are about 20% of base salaries, bringing the total cost of TAUP compensation to $143.9 million. Add the $10.4 million in adjunct salaries (adjuncts do not get any fringe benefits) and the total cost of undergraduate instruction is $154.3 million. As I indicated at
the end of the third paragraph above, undergraduates paid $412.1 in tuition and fees in 2010-11, two thirds of the total $620.5 collected by the University. The State appropriation on behalf, mostly, of undergraduates was $186 million, as I also indicated in the third paragraph above. The total of the $412.1 million and the $186 million is $598.1 million.
The $154.3 million direct cost of undergraduate instruction was about one quarter (25.8%) of the $598.1 million. Where did the rest of that money go? Some certainly must have been used to make up for recent declines in state appropriations. Some went into the library, instructional technology, laboratories, student activities, and so forth. But some also went to the expansion of administration and to the high salaries of our top people and middle managers.
I began this article by listing the $61.6 million in budget items that I think could be wholly or partially cut to meet the expected loss of State appropriation money. I will end it with a few more suggestions:
• The amount of money Temple collects from tuition and fees has increased by about 50% since 2004, from $414.3 million to $620.5 million. There should be no further increases until we get our fiscal house in order.
• The teaching of undergraduates is our primary mission. The amount Temple pays for direct instruction of undergraduates is astonishingly low, 25.8% of the money collected in undergraduate tuition and State appropriation. No more money should be shifted out of the direct instruction of undergraduates.
• We should seek significant cuts in the pay of our top earners and middle managers (e.g., vice provosts, associate and assistant vice provosts and vice presidents, deans, vice deans, and associate deans, etc.). It is not unreasonable to expect that 20% of the approximately $89 million dollars, $17.8 million dollars, could be cut from administration. The cuts, I would argue, should be graduated, with the highest earners taking the greatest cuts.
My calculations and suggestions are only in regard to the academic portions of the $1.0 billion Temple budget (which does not include the health system). But I think it is fair to say that even in the academic portions of the budget there can be found a number of rational ways by which to meet the current crisis without resorting to further academic cuts and without charging our students and Pennsylvania taxpayers even more money than they pay now.