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BURLINGTON — A new budget model at the University of Vermont, where money largely follows students to the colleges where they study, is stoking anxiety among unionized faculty.

They worry that small or undersubscribed classes, and the faculty who teach them, could be lost as individual colleges and departments take an entrepreneurial approach to budgeting, according to union leadership.

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Incentive-based budgeting, or IBB, as the new model is known, is intended to empower decision-making at the individual college and departmental level by disbursing the lion’s share of money to deans and letting them manage revenue and expenses.

That’s a departure from the previous model where the central administration, the president and provost, made allocations to the colleges, and deans had to live within prescribed budgets.

Provost David Rosowsky said it’s too early to draw conclusions about the impact of IBB on faculty or course offerings, because its first year in effect ends in July.

“So you really can’t say what is or isn’t happening, and you certainly can’t identify any trends,” he said.

IBB models are ascendant in higher education, and UVM adopted the approach after two years of careful study that drew input from faculty, staff and students, Rosowsky said.

However, professor Felicia Kornbluh, president of the faculty union United Academics, said she and her colleagues are already seeing evidence that the new budgeting process is devaluing some areas of study and encouraging large lecture-style classes.

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William Falls, dean of the College of Arts and Sciences, which comprises roughly half the university’s undergraduate enrollment, said he understands the anxiety of organized faculty but believes they’re blaming IBB for financial pressures that predate its adoption.

Falls acknowledged there are ways to leverage the model’s incentives that would be “antithetical to academic excellence,” but he said he’s seen no evidence that’s occurring.

On the contrary, IBB is creating opportunities for deans and department chairs to add course offerings and expand offerings in popular areas of study. Giving the colleges more responsibility and holding them accountable is exactly what the model was designed to do, Rosowsky said.

Undergraduate tuition money is UVM’s primary source of revenue, especially as state funding and federal grants dwindle, Falls said.

With IBB, undergraduate tuition money is allocated to the colleges based on student credit hours. An algorithm gives added weight to some credit hours based on perceived value-added course offerings, among other factors. For example, honors classes are weighted 3-to-1 to regular credit hours.

In some ways, the purpose of IBB is to make the costs of doing business immediately evident, Kornbluh said. What keeps her up at night, she said, is that within this new framework it is up to deans, who are under pressure to balance budgets and grow their colleges, to also preserve a full array of academic disciplines.

She fears that once the costs under IBB of offering courses in a department like Gender, Sexuality and Women’s Studies, of which she used to be the chair, become really apparent, deans may be inclined to reduce their offerings.

Dean Falls said he’s confident that won’t happen. “IBB doesn’t trickle down to the departments. It stops at the college,” Falls said, meaning he doesn’t plan to look at whether the Department of Romance Languages and Linguistics is breaking even or turning a profit for the College of Arts and Sciences.

“We need to support the German or Russian majors, and we’re committed to doing that even if there’s only five students,” Falls said.

Kornbluh said one way to help ensure deans live up to those values would be to enshrine them in the algorithm that’s directing the money.

Student credit hours in undersubscribed disciplines, which nonetheless help UVM meet its academic mission, could be weighted in the same way honors courses are, even if the ratio is lower, she said.

“Subvention” and strategic investment

There is an additional facet to IBB known as subvention, which is meant to ensure colleges with higher fixed costs are able to teach courses that can’t pay for their existence with the revenue allocated through student credit hours alone.

Or as Rosowsky puts it in an explainer on the UVM website: “(T)here are core academic offerings at any research university that simply do not generate enough revenue to meet expenses.”

In total, $40 million of the $200 million in annual undergraduate tuition revenue is being held for subvention. Of that, $28 million goes to the medical college, Rosowsky said. That’s because the IBB algorithms doling out money do so based on undergraduates credit hours and “the medical college really isn’t in the business of undergraduate education,” he said.

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“Are they 28 fortieths of the university? No, but they’re very expensive to run,” Rosowsky added.

A small portion of the subvention money is also being peeled off into a strategic investment fund that will be controlled by the president and provost.

Rosowsky said that when the UVM was discussing the IBB model with other universities, they all said such a fund is critical to allow the president and provost to invest in universitywide priorities.

The strategic investment fund will receive a tiny percentage of the subvention money over the next five years, until it has reached a maximum of $8 million. That’s about 1.25 percent of UVM’s total $660 million annual budget, and less than the 3 to 5 percent recommended by other institutions, according to Rosowsky.

Kornbluh said she sees both subvention and the strategic investment fund as vestiges of the central control held by the president and provost under the former budget model. She would like faculty to have a greater say in how that money is allocated.

Rosowsky said if faculty have concerns about how the strategic investment fund or subvention money is being used, they should sit down with him and President Tom Sullivan to hash them out.

Students as revenue, but teachers as a cost?

The colleges also pay what Kornbluh and other faculty refer to as a “head tax” for each professor. That, she said, creates an incentive for colleges to have fewer part-time faculty, because faculty are a cost, and part-timers bring in fewer students.

Or as Dan Wells, a professor in the environmental program who is the United Academics communications director, put it: “A student’s butt in a seat is a plus, and a professor is a minus.”

That dynamic has already led to a reduction in part-time faculty, Kornbluh said.

Next academic year the university will have 9 percent fewer part-timers than in the current year, but Rosowsky said that shouldn’t be attributed to IBB. It’s just part of a normal ebb and flow based on teaching needs, according to the administration.

In a statement, Sullivan pointed out that at the same time, some instructors are now teaching fuller loads, which has in some cases made them eligible for benefits and an office on campus.

“Will there be changes in when and how we use part-time faculty in the future? Of course, because as our costs go up, and our revenues are unable to keep pace with the rising cost of personnel and benefit costs, then we’re going to have to scale things accordingly,” Rosowsky said.

“One area we can scale is, perhaps we won’t offer that course as frequently, and perhaps that major won’t be as reliant on part-time faculty, perhaps we’ll use our full-time faculty more,” he added.

Wells said that can have unintended consequences for students. The university doesn’t just stand to lose courses that fulfill its academic mission of a balanced public education, it could also lose courses that make UVM special.

“We have a field program that is second to none, and we’re seeing reductions in how frequently those classes are taught, and we’re seeing reductions in how many of those classes are offered,” he said.

The field photography class Wells has taught for the last 11 years is being reduced to one section a year, down from two to three sections.

Wells shared the story of a student who was a photography major and environmental studies minor. She was disenchanted with her university experience, according to him, and near dropping out altogether when she signed up for his course.

The small field class put a camera in her hand and got her out of the classroom. It clarified her interests, he said, and with Wells as her adviser, she decided to make environmental studies her major. She graduated this year with a degree in environmental filmmaking, he said.

Reframing the value of a liberal arts education

The challenge for UVM in preserving small or undersubscribed courses, especially in the humanities or social sciences, is student demand. After the Great Recession, families are questioning the value of a liberal arts education, according to all parties interviewed for this report.

Economic anxieties are driving students into areas of study that are perceived as secure, such as business, engineering and hard sciences like chemistry and biology.

Rosowsky, Falls and Kornbluh all agree that administrators, faculty and alumni need to come together to rearticulate the value of what Falls described as a “broad high-quality liberal arts education focused on scholarship and mentoring.”

To do that, Falls said, UVM needs to show current students, in concrete ways, how such an education translates into qualities that are valued in the workforce. There can no longer be an expectation, he said, as there was for his generation, that the merit of a liberal arts education will be implicit to young people.

“We need to more effectively communicate our belief that the leaders of tomorrow will come from a liberal arts background,” Falls said.

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