Faculty and staff organizing is on the rise on university campuses across the country. Most are fighting battles that have their roots in the neoliberalization of American universities that began in the 1970s, when boards and presidents began to aggressively remake universities by shifting teaching responsibilities to lower paid contingent faculty, outsourcing staff jobs, increasing extractive revenue streams (such as expensive student housing or tuition and fees), centralizing power, and reorienting resources towards fields that bring in money from grants and industry-sponsored research. The results have been disastrous for campus employees, students, and whole fields of study, especially in the humanities and social sciences.
These transformations are the outcome of a battle over the financial resources of the university — a battle that university leaders have decisively won over the last half century. For too long, university employees have ceded the seemingly complex ground of the university financial plan and expenditures to the financial managerial class — a small group of highly paid and powerful administrators who control how the university spends its money. When challenged on low salaries, budget cuts, or program closures, these administrators typically use the seemingly impartial narrative of financial logic to justify their decisions. The permutations of this narrative are many, but it can be distilled into this basic phrase: “There is no money.” This phrase has functioned to shut down debate about controversial changes at universities and limit employee and student imaginations about what the university should be and could become. If there is no money, what can you do, right?
What campus employees are increasingly discovering through independent financial analyses at their universities, however, is that there usually is money. Sometimes a lot of it. The university financial managers just do not want to spend it in the ways that faculty and staff are suggesting because they have other priorities, such as fancy new real estate investments, athletics subsidies, extraordinary administrative salaries — the list can go on and on.
To better understand financial analyses and their use in organizing fights, Matthew Thomas Miller talked with Todd Wolfson of Rutgers University, Leila Hudson of University of Arizona, and Derek Schilling of Johns Hopkins University — faculty leaders in campus coalitions that fought and won major financial battles over cuts in retirement funds, layoffs, and furloughs. They achieved these rare victories over their university leadership in part by mobilizing their campus unions and faculty and community groups around independent financial analyses that showed their university’s financial narratives of dire economic straits for what they are — a manufactured crisis to implement dramatic cuts in areas they did not value (primarily, labor). These campus coalitions showed that there are budgetary alternatives — that another university is possible. To forge it, we need to understand the labyrinthian financial apparatuses that universities have become and be ready to organize against it.
This roundtable has been edited and condensed.
Miller: What led you to undertake financial analyses at your university?
Schilling: In April 2020, the Johns Hopkins University central administration announced sweeping mitigation measures in response to the economic uncertainty that characterized the first weeks of the COVID pandemic. Reacting in part to stock market jitters, the university projected losses of $100 million for fiscal year 2020 and of $375 million for fiscal year 2021. The cuts implemented starting in April 2020 included an immediate freeze on all hiring and on salary raises, something all of us have seen in previous economic downturns. But it was the unprecedented measure of zeroing out all employer contributions to retirements for the next fiscal year that pushed faculty at Johns Hopkins to act and to seek an external viewpoint on our university’s financial standing. We wanted to know more and to get the facts unfiltered by the central administration, known in the past to massage figures and to present selective viewpoints on the financial standing of the institution. The measure of zeroing out employer retirement contributions hit younger faculty disproportionately because the value of pension contributions made early-career can multiply fourfold or fivefold by the time of retirement. At Hopkins, these contributions were set at 6-12 percent of salary depending on rank, status, and time since appointment. Any fears that fighting for core benefits like retirement would be seen as an entitlement were quickly dispelled [during COVID] once we explained the long-term impacts for faculty working overtime to try to keep their classes running and to transition to virtual instruction. That was the context for our move in the spring of 2020 to look for an outside financial analysis.
Hudson: At the University of Arizona, it was the late spring 2020 imposition of our furlough, our pay furlough, which is the worst in the country — 15 percent for most earners and up to 20 percent for many faculty. And it’s interesting because although we don't have an AAUP [American Association of University Professors] active group right now, we had a lot of intergenerational coming together, and we had leaders from AAUP in decades past who were able to mobilize. And then everybody rallied round.
Wolfson: For us, there’s a longer history. In our last contract campaign, in 2018, we certainly did open the financial books since we wanted to be able to show that Rutgers had the money to pay for the demands we were making. So we had a history of this. The pandemic hit the Northeast particularly hard at first. Rutgers started crowing about economic hardship from the shutdown on the campus. And my union started talking with all the other unions on campus. We are the biggest union, but there’s 20 unions representing 20,000 workers, and my union represents probably about 8,000 of those 20,000. We knew what Rutgers was going to do because this is what all institutions with a privatized, corporatized, neoliberal mindset do in these moments — they take out the economic problems (a) on the most vulnerable and then (b) use the crisis in order to create new work rules that are in their interest.
So we organized ourselves in response, building out a coalition of worker unions that had existed but wasn’t super well organized prior to the pandemic. And we basically said, “Okay, we're going to get way out in front of you; we’re going to propose a plan for the pandemic before you do.” We proposed a workshop program, which is like a furlough program, but using federal and state aid to keep everyone whole. The idea is the state and the employer share the cost of an employee to stave off layoffs. We made a whole plan to stop layoffs — we demanded no layoffs, and we had a couple other key components to it, including supporting letting communities get COVID testing on our three campuses and making sure that doctoral students have an extra year of funding.
Ultimately, the program would have saved the university somewhere well above $100 million while keeping everyone making less than $300,000 whole. We thought this was the way a public institution should run in the middle of a pandemic. You don’t lay off the low-wage workers and strip them of healthcare in a pandemic. So that was our campaign, and as part of that campaign, we performed a comprehensive financial analysis of Rutgers to show where the money was, what it was used for — so everything from their reserves that could be used to the reserves that were already committed to an understanding of the budget. They didn’t take our plan. They moved on the draconian plan, laid off 1,000 people, disproportionately women and people of color, stripping them of health care in the middle of the pandemic. We ended up fighting that and winning in the long term. But that’s how we used it in the pandemic period, and we’re planning another [campaign], what we are calling “open the financial books—Rutgers has the money,” for later this spring.
Miller: Before we go on further into what came out of these analyses, what do we mean when we say a financial analysis? And what documents are used and why?
Schilling: To begin with, we made it a question of meaningful shared governance. In an emergency situation, there are obviously reserves that the university can draw on, and it’s in our interest collectively, as the faculty, to have access to that information. And since it isn’t something that the central administration habitually provided to the faculty as a tool, we decided to avail ourselves of objective figures that can be accessed through publicly available audited documents, beginning with the I-990s, which are filed yearly by all institutions of higher education with tax-exempt status.
We knew there was a good data set out there that could be accessed, processed, and interpreted in ways that could make us better participants in shared governance within our university. We knew we would be moving away from perhaps more traditional understandings of how money works in university settings. That is, we may know, locally, how a department budget works; we may understand how money works within schools or even in an RCM [Responsibility Center Management] environment. What we hadn’t done as a faculty is to take a step back and think about the broader questions of bond ratings, assets, reserves, whether they’re designated or undesignated, and all the different restrictions that may apply. This, I think, was a real learning moment for many of us. Though I’m a humanist, I became a kind of de facto expert on finance. So it was really to become better participants in a shared process of decision-making in this time of uncertainty and crisis. I think we were better for it and became stronger for it too.
Miller: One of the things that’s really important about these comprehensive financial analyses is that they are done with audited financial statements that had been looked at by outside experts. The second critical point is to distinguish between budget documents and these financial statements because oftentimes financial administrators bake into their budget figures and forecasts a whole series of assumptions about economic trends and expected revenue levels and losses, which play in favor of the narrative that the university wants to tell about [its] financial situation. They predict, as they did in the COVID crisis, that the sky is going to fall, which, of course, justifies whatever draconian cuts they want to implement.
Hudson: The learning curve was and continues to be huge. This comprehensive financial analysis is a tool that we have to learn how to use most effectively. That’s why conversations like this, of a comparative nature, are really helpful. But for us, when we started on this journey, we did not know the difference between a budgetary projection [and financial analysis]. We didn’t even know how the budget model, the RCM, ran. So, there was so much to learn, and the faculty was generally ill prepared, including through shared governance, to do anything but be a receptive audience for numbers that the administration would throw at you. So we were completely unarmed in terms of having our own grasp of the actual, rather than projected or modeled, financial situation. So this was the first attempt to level the information playing field. And, you know, we’re still reaping the benefits but also learning how to use that effectively through campaigns, through the labor union, and through shared governance. It’s an ongoing story.
Wolfson: There is a difference between the budget analysis and the overall comprehensive financial analysis. Rutgers runs a $4 billion annual budget, and we want to understand how they spend that $4 billion so that we can offer a counter budget. If they’re spending $4 billion, here are their priorities and here’s what the priorities of a real institution that prioritizes research, service, and teaching would be so [we can] push off a worker, student, community budget against these management-driven, privatized, corporatized budgets that they create.
A second thing to flag here is that Rutgers, or any institution, has more long-term financial security than they're letting on and some of this is leaning on the fact that almost everything they do is focused on their Moody’s rating. Sometimes the most clear picture — the rosy side — of their budget and financial situation comes from the reporting and stuff they do to get their credit rating from Moody’s. So if you want to know when they're painting a pretty picture, go get the documents they share with the credit rating agencies because that’s closer to the truth than the doomsday crap they send out to the communities.
And then third, and this is particularly for unions, when we come to a contract campaign and we’re going to make demands, we want to monetize it and show that it’s small vis-a-vis the foolish wastefulness they have in their athletics budget, for instance. And so, in all, there are many levels of leverage you want to create out of it, and I think these are important things to think through.
Miller: What were some of the most salient conclusions, the most overarching broad points, that you all took from the financial analyses at your institutions?
Wolfson: We had to sue Rutgers to get the full financial picture of their athletics program, which Rutgers has subsidized to the tune of a half billion dollars over the last decade, taking money from state taxes and from student tuition and putting it into an athletics program. That was an important thing for us to learn because it centers the priorities of the institution and forces the institution to be clear about those priorities.
Generally, we also got a much better picture of what some universities call endowments, what they call reserves, and what parts of the reserves were restricted and legally focused on certain sort of ends because they got the money from some donor who said it must go towards building a locker room for the basketball team versus the unrestricted reserves, which they often say are restricted — even though they’re unrestricted legally and could be used for anything. So for us, having a real clear picture of those things, understanding also how they’re investing their money and what their economic strategies are for getting and growing the university. The one thing that comes to mind as a meta level thing we learned is that — there’s a saying that, maybe it was Carnegie US Steel X, that they changed their name from US Steel to US Steel X and somebody asked [Carnegie] once, “What does that X mean?” and he said anything that makes money is the X part of US Steel X. That’s what our university and all of our universities are doing now. They’re running their operations, and then they are taking a large chunk of their money and they are using it to do any sort of dealings that then grow the reserves or the endowment of the institution. Having an understanding that there is this finance capital part of the administration of Rutgers that's operating and churning just as if they’re on Wall Street. Knowing that that exists, I think, was really important for us.
And the last thing I’ll say is that we have to make information about our universities’ budget and financial picture understandable. [The administration] will mystify it, and often our reports also mystify it, so getting it into real simple terms and trying to explain it in ways [understandable to] a faculty member who’s not an economist and doesn’t really want to spend much time thinking about it but needs to understand the core truths of it — that’s a really important part of the project. One, you need to understand it and, two, you need to figure out how to translate that understanding.
Miller: Derek and Leila, were there things that were similar or any interesting differences that came up in your financial analyses?
Hudson: The size and scope of the economy of the university. The nature, again, of those restricted versus unrestricted reserves. The slow dawning on members of the faculty that we have to look at the university as a financial entity, and indeed we’re far behind our Board of Regents and our state legislature, who already refer to the public universities, here in Arizona, as enterprises. That’s the official designation, and, of course, we in our innocence and in our preoccupation, within our silos, have never stopped to think whether or not the university had a Moody’s rating. I mean, that doesn’t surprise you once you learn it, but until you stop to think about it, you don't consider the university in that way.
Miller: How did your universities respond to your reports and public information campaigns that you did around these comprehensive financial analyses?
Hudson: It’s so long ago now I can't really remember about the timing of it, but we were able to forestall the onset of the furlough by a few weeks as we campaigned. And because we had access to better numbers, and a more sophisticated understanding, the furlough was ended earlier than it would have been. Obviously that is a very limited success, and we’re still campaigning today on return of the furlough funds. But we basically shortened the period of furlough on both ends, and out of this grew the germs of the UCW [United Campus Workers] organizing effort as well, so it’s given us issues, if not total success.
Schilling: Within days of learning that our faculty assembly had resolved to commission an external financial analysis through the AAUP advocacy chapter, the finance wing of the university’s upper administration announced a finance “town hall” that would be broadcast to the full university. So we had a really immediate response, which I believe was meant to forestall some of the questions that were inevitably going to be asked.
Wolfson: Our administration, I mean, they don't want to respond too heavily because they don’t want to legitimize the counter narrative. We actually got the executive — the equivalent of the CFO of the university — to go on record saying that unrestricted funds are legally able to be used for anything. And that they should be and that they should be using towards the pandemic problem. And so we won a sort of tête-à-tête with them in a certain moment, and that went public, and then they had to backfill those sorts of things. So, there have been moments like that but generally they don’t want to legitimize our arguments.
Hudson: As we began to push on the question of if there were enough unrestricted funds for furlough repayment, we began to see quite deliberate, divisive counter narratives that it’s privileged faculty who want their salaries made whole at the expense of contingent faculty who will have to be laid off. Of course, there were layoffs going on simultaneously, and it was a false choice.
We made a request through our faculty senate — and I’m speaking now as the chair elect on the back of the movement that put a lot of us into shared governance who hadn’t been in shared governance before — to form a special committee to investigate this with members of the administration, and it was quite effective, [coming] up with a solution of taking on some debt in the short term to cover the $50 million or so that would be necessary. So another emergent discourse that came out of that was this sort of frugal anti-debt discourse. That was adopted, particularly by our Board of Regents, that “oh no no no, we aren’t going to take out debt to pay our short-term needs.”
Miller: What would you say were the most important outcomes of these analyses?
Hudson: In our case, it was organization on the field of shared governance and union organizing, which in an inhospitable environment like Arizona seemed like an impossibility, and certainly has its challenges, simply because we are a right-to-work state. So in our case it is clearly organizational — and putting the administration on notice that there will be scrutiny and pushback.
Schilling: At Johns Hopkins, the process of commissioning a financial analysis really galvanized the faculty across schools. All the walls between the different units and divisions started to fall when we found common cause in this response to what we saw as excessive measures, once we had learned what our financial standing was as an institution. Qualitatively, the greatest benefit was the solidarity created between people in the School of Public Health, in the School of Medicine, the Peabody Conservatory, the School of Education, School of Nursing, and so on, and with my own campus, which combines the School of Engineering and the School of Arts and Sciences. That was the greatest gain: intercampus solidarity. It also happens that after the October data for fiscal year 2020 was filed and the external financial analysis performed, the JHU central administration pledged to restitute 50 percent of the pensions. Then, in spring 2021, when further quarterly returns had been audited, they went forward and restituted the remaining 50 percent. So we were made whole with respect to the pension contributions which had been zeroed out just one year before.
Wolfson: One thing it did for us is that it built a collaboration across the multiple unions to work together to build up the Coalition of Rutgers Unions (CRU). So there is an organizing and coalition-building piece that’s really important. Picking up on what Derek said, during the pandemic we did both an “open the books” comprehensive analysis of the university’s financial position as well as our own “state of the state of the budget.” And we used it heavily in negotiating the pandemic solution. So as I said, Rutgers laid off a thousand people — none of my members but largely low-wage workers, disproportionately women and people of color coming out of the dining services but also adjunct faculty. We then used our financial work as part of the public-facing part of the campaign when we forced them back to the table to get commitments of no layoffs through the calendar year, to get a process for rehiring all the people that were laid off, to winning back the two raises they attempted to strip from all workers and particularly my unit — that’s a three percent raise and a 2.5 percent raise we got back, so a total of 5.5 percent of raises they were trying to steal — and that is not just for my unit, that’s all the unions that were involved in these negotiations. And then also I think we were the only public university of its kind during the pandemic where, if you could show that you were adversely affected by the pandemic, you got an extra year of funding from the university if you were a doctoral student.
So those are the things we won, and certainly the economic analysis and the budget were critical to that campaign and the bargaining we did to win those things.
Miller: How can these financial analyses be used as tools for organizing and political education on university campuses?
Hudson: The first thing that comes to mind is that it’s a very important first step for all the reasons we’ve just talked about — just realizing how much you don’t know, how much there is to learn, and how siloed, divided, and naive members of your particular university community have been. Then the question becomes: how do you operationalize that? If you’re unable to transform that moment of insight and information sharing into an operational culture of some kind it can be very demoralizing. It can be a big union busting or flex for the administration, if they see that they can continue to confuse, obfuscate, mystify, and divide people. And you know, that’s something that we have worked with and through in the last couple of years. It’s not enough to just know the information; you really have to have a plan or a clear vision as to how to operationalize it.
Schilling: One of the takeaways for me is that in institutions of higher education, numbers do speak a little bit more than words, especially in 2022. Ultimately, universities are financial actors, and they do think about the bottom line. And there is a good deal of margin or maneuver in all decisions that are taken, whether by Boards of Governors or of Trustees; some of these decisions may not align with the core academic mission of our university or college. The more that faculty can get involved and understand that numbers are at the base of all of this, the better our chances of being meaningful participants in this real struggle for shared governance, where ultimately it’s the students and researchers and contract workers and everyone else who win out in the end.
Wolfson: To me, there is both the research and understanding of it, and then there is the question of how this can be worked into organizing and political education. And so for us there is — and Leila really touched on this — the operationalization of it. For us, there’s multiple levels of that. We write reports, we do political events, public-facing events, and then we try to do infographics, and each one of these tools is meant to operate differently. The infographics are enabling folks to have an easily understandable recognition of what’s happening around the budget. But then we also need to be able to go into battle with [Rutgers’s] CFO in court. And so each one of those demands different things. And each one of those does different sorts of work, but all that’s critical towards building your power vis-a-vis the university and their own understanding of the finances, which is often obfuscated or nontransparent, which is how they operate. They try to just keep you away from the light as much as possible.
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