Administration / Budget

Faculty, CMU spar over unrestricted net assets as compensation talks continue

In the middle of the bargaining ring between faculty and Central Michigan University stands one point of contention — $228 million in unrestricted net assets.

Debate over what it means, and debate over how the money can be used.

Unrestricted net assets at state universities
Michigan: $1,836,294,000*
Michigan State: $638,000,000
Wayne State: $235,100,000
Central Michigan: $228,300,000
Grand Valley State: $135,891,000
Oakland: $121,366,000
Northern Michigan: $88,499,863
Ferris State: $88,400,000
Western Michigan: $68,500,000
Eastern Michigan: $56,100,000
Saginaw Valley State: $35,432,000
Michigan Tech: $8,437,961
Lake Superior State: $3,142,882 

Source: Detroit Free Press
*Includes Ann Arbor, Dearborn and Flint

Former Faculty Association President Tim Connors said it is a simple matter of the university setting priorities.

“The administration sets its own priorities,” he said. “If your priorities change, you shift the money.”

The $228 million is pre-designated as reserves for several purposes, including maintenance, construction projects and contractual commitments. Public universities across Michigan have similar funds, most of which are in the dollar amount of hundreds of millions.

Steve Smith, CMU director of public relations, did not comment on whether the funds can be shifted toward other designations.

A 2010 financial report describes the unrestricted assets as “funds that have been designated by the governing board for specific purposes as well as amounts that have been contractually committed for goods and services, which have not yet been received.”

The use of the assets is not restricted by donors or grant agencies, according to the financial report.

That factor has drawn the eye of faculty, who are asking for increased salaries and benefits during bargaining talks.

“Based on the FA bargaining team’s salary proposal in the fact-finding document, the FA’s salary proposal is an estimated 0.5 percent of the annual CMU budget,” said FA president Laura Frey, in an emailed statement.

According to a Chronicle of Higher Education database, a fully-promoted professor at CMU earns an average salary of $98,400. An average associate professor makes $75,000, assistant professors make $61,400 and instructors collect $40,000 on average.

The numbers are not far off from universities of comparable size, such as Western Michigan University and Eastern Michigan University.

CMU’s unrestricted net assets in reserve, however, are considerably higher than both and have risen over the past several years. Only EMU and Michigan Technological University have witnessed declines.

David Burdette, vice president of Finance and Administrative Services, has stated about $5 million is available in the form of cash as an emergency fund. He referred comment to Smith for this story.

Meanwhile, CMU’s day-to-day cash reserves are separate and total about $61 million.

“CMU operations cost roughly $1 million a day,” Smith said. “This reserve gives us roughly two months of operating expenses.”

Smith said operational budgets from different universities have many complexities that can make comparisons misleading.

Effect on appropriations

Kurt Weiss, public information officer for the Michigan Department of Technology, Management and Budget, attributed some universities’ higher net assets to specific expenditures.

“Some universities included capital and maintenance funds, and others did not, with the former obviously reporting a larger amount,” Weiss said.

Reserves at public universities played no role whatsoever in sharp appropriations cuts this year, he said.

Rather, university’s tuition actions over the last five years were the most significant factor, Weiss said.

“The goal was to get the budget into structural balance where ongoing expenditures could be covered by ongoing revenues, eliminating the one-time fixes each year,” he said.

But CMU is still preparing for the worst.

“The university anticipates further state appropriation challenges and a structural deficit in the years ahead,” Smith said. “This has required us to reassess our budget priorities, as we no longer can rely on higher tuition to sustain us.”

Regardless of any cuts to state funding, the FA points to the unrestricted funds as a prime showing of the administration’s priorities and where faculty are placed.

Connors said the administration has the ability to change the designation of the funds but has simply been reluctant to do so.

He compared the funds to a student who has saved up money to pay off a credit card balance, but whose car battery unexpectedly dies. The student then uses the saved money to buy a new car battery because the need for reliable transportation becomes a higher priority.

“Depending on what (the priorities) are and how they change, they can be shifted,” Connors said.

11 Comments

  1. Michmediaperson says:

    There’s the numbers.  Professors making more than $98,000 plus probably another $25,000 in health, retirement and other benefits……………….and they have the audacity to go on strike when the country is at record levels of poverty and children living in poverty, thanks to the rotten Obama economy.

    Michigan taxpayers are losing their jobs, taking paycuts and these $120,000-plus professors (salaries and benefits) want more money and benefits.

    Unreal!

    How about the Union go with the outstanding package CMU is offering them and the money for pay raises and cadillac union health insurance monies could go to children in poverty in the way of scholarships, etc.

    How about liberal educators and unions doing something for those in need!

  2. Michmediaperson says:

    There’s the numbers.  Professors making more than $98,000 plus probably another $25,000 in health, retirement and other benefits……………….and they have the audacity to go on strike when the country is at record levels of poverty and children living in poverty, thanks to the rotten Obama economy.

    Michigan taxpayers are losing their jobs, taking paycuts and these $120,000-plus professors (salaries and benefits) want more money and benefits.

    Unreal!

    How about the Union go with the outstanding package CMU is offering them and the money for pay raises and cadillac union health insurance monies could go to children in poverty in the way of scholarships, etc.

    How about liberal educators and unions doing something for those in need!

    • The averages are inflated due to business school faculty and some health professions faculty.  A better measure would have been to use the median…which is way below the numbers reported here.  The vast majority of profs do not make these amounts.  It’s really laughable.  But I realize getting into a logical statistical debate is pointless here…  

      Please also pay attention to what the CMU cronies said:  “We anticipate a structural budget deficit.”  That’s due to the medical school folks.  Students, your tuition dollars are not going to faculty to teach you; not going to PAID internships to help you gain job experiences; rather, your tuition is paying for a medical school.  You are going into student loan debt to pay for a medical school.  No matter what program you are in, the university takes a huge chunk of your tuition for this (over 60%).  

    • The averages are inflated due to business school faculty and some health professions faculty.  A better measure would have been to use the median…which is way below the numbers reported here.  The vast majority of profs do not make these amounts.  It’s really laughable.  But I realize getting into a logical statistical debate is pointless here…  

      Please also pay attention to what the CMU cronies said:  “We anticipate a structural budget deficit.”  That’s due to the medical school folks.  Students, your tuition dollars are not going to faculty to teach you; not going to PAID internships to help you gain job experiences; rather, your tuition is paying for a medical school.  You are going into student loan debt to pay for a medical school.  No matter what program you are in, the university takes a huge chunk of your tuition for this (over 60%).  

      • Michmediaperson says:

        Zeno, while I agree with you about the medical school.  In fact, I was the first one a couple years ago to speak out against it since it was nothing more than a resume padder for Mike Rao, I still think the arrogant union has a major question to answer.

        Why should Michigan taxpayers via appropriations and why should students have tuition raised so unionized faculty will have the extra money to pay union dues which the education unions use to subsidize multi-milllionaire Barack Hussein Obama’s re-election campaign.  Likewise, Debbie Stabenow and every left-winger running for office next year.

        If Obama or Stabenow want money, let the Hollywood Left pay for it.  Obama made 5 million last year and he wants $98,000 a year CMU professors to subsidize him.  That’s corporate welfare.  In 2004, John Kerry’s wealthy wife could have paid for his campaign but instead they made union employees pay for it.

        Zeno, why should students (half of which probably come from Republican households in Michigan) have to pay for Stabenow TV commercials, etc?

        I might be open to a pay raise if the faculty dumps the union.

        Plus, these professors plead poverty but it’s surprising to see online who the professors were who contributed money to Obama and the Democrats the past four years.  Why do they waste their $$$$ doing this when they claim they’re barely able to pay the bills?

        • KafkaMadeMeDoIt says:

          Do you not understand the concept of “median”?  The highest paid faculty are in business and health professions. In business, their adjunct faculty are often paid in excess of 75, 000, while a tenured Associate professor in another department might make 48,000.   You cannot use the mean average because the highest salaries are so high that they inflate the mean as Zeno noted.  If you truly are a “media person,” then I challenge you to find out what the median salaries of CMU faculty are by college —it’s public information.  Instead of holding forth on your repetitive complaint  that “liberals & unions= the apocalypse”, which renders the comment sections of CM-Life a dreary scene from Groundhog Day, do some research and live up to your moniker . . . please.

        • KafkaMadeMeDoIt says:

          Do you not understand the concept of “median”?  The highest paid faculty are in business and health professions. In business, their adjunct faculty are often paid in excess of 75, 000, while a tenured Associate professor in another department might make 48,000.   You cannot use the mean average because the highest salaries are so high that they inflate the mean as Zeno noted.  If you truly are a “media person,” then I challenge you to find out what the median salaries of CMU faculty are by college —it’s public information.  Instead of holding forth on your repetitive complaint  that “liberals & unions= the apocalypse”, which renders the comment sections of CM-Life a dreary scene from Groundhog Day, do some research and live up to your moniker . . . please.

    • Ben Steiner Brothers says:

      The only thing that’s unreal here is how bad your posting is.

  3. Michmediaperson says:

    I guess Ben I hit a nerve and there is no way you can counter.

    I win the debate again!!!!

    • Ben Steiner Brothers says:

      Debate implies reason, you are incapable of reason, this makes you a bad poster. I’m sure there are plenty of conservative charitiahahahahahahahahaha

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