WOUFT Negotiation Blog

Today the administration brought out their tired slides showing how the university is already deficit spending in order to make the case that they cannot possibly afford any more money for faculty salaries. Although it's tempting to dwell on the fact that every time they bring out those slides the numbers are different depending on the audience, let's instead look at this issue of deficit spending.
Quite simply, deficit spending implies that you are paying out more than you are taking in - expenses exceed revenues. For example, if you make $25,000 per year, but you spend $30,000 per year, then you are deficit spending. For most of us that means having to finance the deficit using something like credit cards. And that is generally considered a bad thing.
Consider another scenario. Suppose you make $30,000 per year, but you only spend $25,000 per year. In this case, you are running a surplus of $5,000 per year - generally a good thing. After four years, you would have $20,000 in the bank, so you decide to buy a new $20,000 car. In that fifth year, you still make $30,000, but you spend $45,000 (your normal $25,000 plus the $20,000 for the car). Your revenues exceed your expenses by $15,000 - i.e., you are deficit spending. Is that a bad thing? Probably not - you did get a new car after all.
The important things to note are:

1. In order to end up with $20,000 in the bank, you must have run a surplus,
   
2. In this case, the deficit spending was not harmful (the new car), and
   
3. Your normal expenses ($25,000) are still less than your income ($30,000), even if you don't get a pay raise.
   

Now, let's consider the university's situation over the last couple of years. Supposedly, the administration on-campus ran up a huge fund balance (surplus), and that offended administrators off-campus. As a result, the administration was directed to spend down the fund balance as soon as possible, and the campus was denied a tuition increase (no pay raise).
How does this compare with the personal scenario outlined above?

1. In order to have a fund balance, the administration must have been running a surplus.
   
2. The fund balance was (deficit) spent on one-time items (e.g., sidewalks, chairs, etc.), and at the time, the administration claimed that it was impossible to spend that money for on-going expenses (e.g., salaries).
   
3. The administration did not gain any additional tuition, so all other things being equal, they must still have been running a surplus.
   

However, the administration claims that the campus is in a dire financial situation, and they cite the deficit spending as evidence. But, we have just seen that buying lots of one-time goodies creates the appearance of deficit spending, when in reality, it is not that bad. The administration would have us believe that they are spending down the fund balance for on-going, day-to-day expenses. But, they told us before that they weren't allowed to squander a fund balance for on-going expenses.
Of course, there are many items that affect the income and expenses of the university, and the university's situation may have changed over the last couple years. But have we seen anything so dramatic that it would not only convert a day-to-day surplus into a deficit, but that it would suck up a huge amount of fund balance, and still leave us in deficit? How could something so dramatic happen at a time when the state's economy is picking up to the point where the government is talking about refunding money to the taxpayers? Something doesn't add up.
Fundamentally, managing the money is an administrative task; it certainly isn't a faculty task. If the finances are whip-sawing back and forth like this in a healthy and improving economy, you really have to wonder about the real truth about the situation. Or if the situation really is this bad, what the hell are the administrators doing to make such a mess of this? In either case, why do the faculty have to pay the price?

So what's going on, and what happens next?
The general membership of the union authorized the bargaining committee to call a strike, if the bargaining committee sees fit. This does not mean there will be a strike. In fact, we all hope it doesn't come to that.

Mark Perlman (union president) and Peter Calero (bargaining committee chairman) addressed the Board of Higher Education last week (March 2nd). If OUS wasn't aware of the strike possibility, they are now.

Are there any negotiations going on?
Yes and no. In theory, either side can request a face-to-face meeting. At the moment, no such meetings are planned. At the very least, there will be another mediation session during finals week (Monday the 20th). During mediation, the two teams meet in separate rooms and mediators shuffle back and forth trying to reach a compromise. Because a strike is looming, the state will bring in two mediators - tag team mediation, if you will. It would not be surprising if there were negotiations and/or mediation during spring break.

What will happen to Spring quarter if there is a strike?
That's up to the administration. They have complete control over it. Maybe they'd shorten the quarter. Maybe they'd extend it. Maybe they'd refund part of the tuition. It's up to them. Keep in mind that the faculty at an OUS school have never gone on strike, so it's not like they have a "standard strike plan" up their sleeves. On the other hand, their general contingency planning (e.g., massive flu outbreak) may prove useful. Again, it's up to them.

What should students do?
Assume that the quarter will start on time, all scheduled classes will be taught, etc. It seems very unlikely that there would be a complete shutdown of the campus. If you're away from the area and don't want to come back if there are no classes, you should monitor what's going on. The Statesman Journal should be covering the story.

"Pay is issue in WOU strike talk"

Just try to get objectivity like this from the SJ.