Rivers of Money in a Drying Land
—By Philip Yannella, Professor of English and American Studies
In July, I wrote a letter to the editor of the Faculty Herald that, among other things, pointed out that between 2006 and 2010 Temple University’s Treasurer reported substantial operating sur-pluses, large “excesses of revenues over expenses.” End-of-year surpluses are signs of general financial health, representations to the world that an enterprise is doing well. The Temple surpluses were $61.2 million in 2010, $49.2 million in 2008, $98.4 million in 2007, and $31.6 million in 2006 (in 2009, a deficit of $14.1 million was reported); on average, the surplus was $45.2 million per year. Each Treasurer’s Report is introduced by an independent auditor’s opinion (Temple employs Deloitte & Touche LLP) that the financial position of the University has been presented fairly and in accordance with established accounting principles. The Treasurer’s Reports can be accessed on the Temple website under Public Information.
Over the past year or more, driven in part by cuts in the state appropriation to the University, a sense of financial crisis has loomed over Temple’s colleges. Deans were told to substantially cut their budgets in the last fiscal year and again in this fiscal year, and, in response, have done exactly those things that they and their predecessors did during Temple’s many previous financial crises. Faculty searches were frozen and retired faculty were not replaced. Increases in teaching loads were mandated. Efficiencies were sought through still larger class sizes. Travel budgets were trimmed. Reorganizations were undertaken. And so forth and so on. Meanwhile, undergraduate tuition was raised substantially and, it is rumored, will be raised again next year. To some, of course, raising tuition was a good thing because it was a step toward repositioning Temple as an expensive “brand” that might not be affordable to the aspiring masses but would be, in theory, attractive to the sorts of students who do not worry so much about the cost of their educations.
Given that we faculty were being told that the fiscal sky was about to fall in on us, I thought that the days of budget surpluses ended in 2010. I was very wrong. A few weeks ago, Temple put up on its website its Treasurer’s Report for the fiscal year that ended June 30, 2011, and that report revealed an operating surplus of $94.2 million, more than twice the annual average of the previous several years. The new Treasurer’s Report can be found here. The detail regarding “excesses of revenues over expenses” is on p. 3.
The 2011 Treasurer’s Report was signed by the auditor on October 24. That was almost exactly the date when we began hearing about a new round of budget cutting in my college and at about the same time that I became one of several members of the English Department who volunteered to have our office telephones removed, thereby saving the University about $200 per year in phone costs. It was also about this time that Board of Trustee member Mitchell Morgan, who is head of the Board’s Facilities Management Committee, was reported in the November 13 Philadelphia Inquirer to be suggesting to some important real estate people that they join Temple’s North Philadelphia efforts, telling them that they ought to “Invest in us. We know times are tough.” The Inquirer article, which includes brief descriptions of Temple’s big construction plans, is linked here.
In a June 2011 letter to the editor of the Herald, Marina Angel and I asserted that Temple’s surpluses, created out of money paid by students as their fees for instruction, were being siphoned off into construction projects. We based our assertion, which has never been challenged, on the words of Anthony E. Wagner, Executive Vice President, Chief Financial Officer, and Treasurer: Mr. Wagner said in a May interview that one of the “pots of money” used to finance construction came from “our operating margin, which is in the 3-4 percent range [that is, 3-4% of nearly $1 billion].” The November 2011 Inquirer article cited above also includes statements by other Temple officials that clearly indicate that the University is in good financial shape and that construction is its priority. A finance officer spoke of what might be called Temple “exceptionalism,” its freedom from the forces that are currently shaping other institutions, saying, “ ‘We have been able to keep pace’ despite the slumped economy, from higher tuition collection (thanks to rising enrollment), and by juggling university, state, borrowed and donated funds.” Saying that “money flows not just because trustees and staffers beg for it,” the author of the article quoted the University Architect as saying that the money flowed “‘because Temple has a plan…. A very solid financial plan, to back up a physical plan, that is based on an academic plan. Without a plan, political strength wouldn't help.’” I do not understand the logic of that statement, but I think I understand its spirit.
Rivers of money flow to some Temple places, but money dries up in academic places. What a sad story. What an infuriating story. •