Sunday, May 18, 2008

Things that Don't Make Sense (Percentages Edition)

More on the campus funding cut. In the email that was sent around saying that no one is getting a raise this year (and by "no one" they probably mean "no one who is making less than $200,000 a year"), the plan for the budget cut was briefly described.

We have a 5.7% funding cut. The email says, "the central campus administration will handle a 3.7 percent reduction - thereby reducing the necessary cuts to academic and non-academic units to an average of 2 percent."

In order for this plan to work without substantial unstated revenue increases, the academic and non-academic units aren't being asked to cut 2% of their own budgets. They're being asked to cut 2% of the entire campus budget.

For example, let's imagine a simplified model of a university with a central administration with a budget of $100 and an academic unit with a budget of $100. Total budget of $200. Under a 5.7% funding cut, they'd need to cut $11.40 from the budget. If the administration cut 3.7% of their own budget and the academic unit cut 2% of their own budget, we'd be saving $3.70 + $2.00 = $5.70, which is half of what we need. This means that for the numbers to work out right, the administration would have to cut $7.40 (which is 7.4% of their budget), and the unit would have to cut $4 (which is 4% of their budget).

I don't know about the relative sizes of the budgets of various campus entities. What I can say, though, is that 2% of the entire campus budget is a lot of money, and for a small unit to come up with its share might be difficult. Or, perhaps we can extend this administrator's plan and break the university up into 5700 pieces, each of which cuts their budget by 0.001%.