THE UNIVERSITY OF MICHIGAN-DEARBORN

 

Committee on the Economic Status of the Faculty

 

June 6, 2003

ANNUAL REPORT TO THE FACULTY SENATE

  

 

Joseph Cepuran (Education)
John F. Fink (Mathematics)
Marlene E. Gordon (Humanities)
James W. Knight, Chair (Engineering)
John F. Riebesell (Natural Sciences)

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Challenging Times for the University of Michigan-Dearborn

The University of Michigan-Dearborn (UMD) faces very challenging times fiscally and educationally over the next several years.  Reasons include:

 

The FTDC acquisition increases UMD’s total square footage by about 30%.  To fund the acquisition and other new buildings, UMD will have an additional $13.75M of principal added to its debt service.  Employee benefit costs are increasing dramatically with more of these costs being shifted to employees.  Since tuition revenue growth is the primary means of meeting these increased expenditures, this creates tremendous pressure for enrollment growth.  This is all in the context that UMD has had and will continue to have a bare-bones budget for instructional support.  There is no excess in the instructional budget to accommodate possible shortfalls in tuition revenue growth.  In the event of such shortfalls, faculty face the prospects of eroding real incomes, forced terminations, or pressure to lower academic standards.

The remainder of this report describes some of the current conditions and practices at the University of Michigan-Dearborn.  The intent of the report is to highlight concerns of faculty about UMD’s long-term educational and fiscal viability.  Two appendices, containing descriptive faculty salary data, are included to allow comparisons with the Ann Arbor and Flint campuses and to document the current salary levels.

Educational Value

Historically UMD has prided itself and advertised itself as offering quality undergraduate and masters degree programs.  The educational experience has been characterized by small class sizes and ready access to faculty—all for a reasonable price for the quality of education received (with quality justifying higher tuition than other Michigan IIA institutions—see later in this report).  Educational quality and value have been the core themes, but they may be difficult to sustain in light of UMD’s financial challenges.

Gross Budget Trends

Table 1 shows the state appropriation, tuition revenue, total revenue and associated percentages by fiscal year for the fiscal years ending in 1992, 2001, 2002 and 2003(projected).  For example for fiscal year 2002, the state appropriation was $27.99M, tuition revenue was $39.66M and total revenue was $69.19M.  Thus the state appropriation was 40.46% of total revenue while tuition revenue was 57.32% of total revenue.  Combined they accounted for 97.78% of total revenue.  The 1992 fiscal year values are included to provide a longer historical perspective.

Table 1 shows that tuition accounts for nearly 61% of total revenues for fiscal year 2003.  Tuition growth of $10.3M over the last two fiscal years (i.e., from $35.55M to $45.90M) has accounted for all of the growth in total revenue ($9.67M) during this time.  Over the longer term comparing with 1992 fiscal year values, tuition revenue has increased from $19.2M to $45.9M (139% increase) while the state appropriation has increased from $18.5M to $27.0M (46% increase).  Given the economic condition of the State of Michigan, the trend of increasing reliance upon tuition revenue is likely to continue for many years into the future.

Chancellor Little and Provost Simpson have set a goal of 3% enrollment growth per year for the next several years.  This is a very aggressive goal given that from 1992 through 2002 total student credit hours increased from 163,490 to 175,913, an increase of 7.60% over the ten years.  This increase corresponds to an average annual compounded growth rate of 0.735% per year, or only 24.5% of the 3% goal.

   

Table 1—State Appropriation, Tuition Revenue and Total Revenue by Fiscal Year

 

Fiscal Year

1992

2001

2002

2003*

 

 

 

 

 

 

 

 

 

State Appropriation(S)

$18,530,036

 

$28,351,131

 

$27,993,300

 

$27,011,780

 

Percent of revenue

 

47.20%

 

43.22%

 

40.46%

 

35.89%

 

 

 

 

 

 

 

 

 

Tuition Revenue(T)

$19,165,247

 

$35,552,521

 

$39,661,250

 

$45,899,924

 

Percent of revenue

 

48.70%

 

54.20%

 

57.32%

 

60.99%

 

 

 

 

 

 

 

 

 

Total Revenues(Tot)

$43,630,274

 

$65,590,483

 

$69,191,156

 

$75,263,017

 

 

 

 

 

 

 

 

 

 

(S+T)/Tot (%)

 

95.90%

 

97.43%

 

97.78%

 

96.88%

*projected

 

 

 

 

 

 

 

 

 

To achieve the 3% enrollment growth target without sacrificing educational quality is going to be challenging.  It requires an alignment of department/unit, college and central administration decision-making for resource allocation.  Existing and new initiatives ideally should enhance current undergraduate and graduate degree programs or at least be neutral towards them.

Concerns

Educational Quality

One measure of educational quality is the number of courses actually taught by tenure-track faculty.  As shown in Table 2, three years ago (June 2000) the Committee on the Economic Status of the Faculty (CESF) reported that non-tenure-track faculty contributed 39.1% of the full-time equivalents (FTE).  This was the second highest figure among the ten comparable Michigan IIA institutions (CMU was highest at 41.8%).  Two years later this figure for UMD had increased dramatically to 48.2%, a 23.3% increase. Again UMD was second highest with CMU being highest at 49.1% (see Table 3).  During this same time period the annual tuition and fee increases were 2.9%, 3.0%, and 9.4% (for the current fiscal year the tuition and fee increase is 8.5%).

The CESF also reported in June 2000 that UMD spend 78.4 cents directly on instruction for every $1 students paid in tuition and fees.  This was the lowest figure by far among the ten comparable Michigan IIA institutions (the average value was 96 cents).  Two years later the value remained at 78.4 cents.

Table 2—Educational Quality and Expenditure Measures

 

Fiscal Year

 

 

1999/2000

2001/2002

Percent Change (%)

From FY00 to FY02

Percent of total FTE contributed by non-tenure-track faculty

 

39.1%

 

48.2%

 

+23.3%

Amount spend on instruction for every dollar of tuition and fees

 

78.4 cents

 

78.4 cents

0

Table 3

Non-tenure-track FTE/Total FTE

 

University

Percent

 

 

 Central

49.1%

UM-Dearborn

48.2%

UM-Flint

44.8%

Saginaw Valley

38.9%

Ferris

35.9%

Grand Valley

35.9%

Northern

31.8%

Michigan Tech.

30.1%

Eastern

29.7%

Oakland

26.2%

 

 

Low Financial Aid

Another CESF concern is the prioritization of student financial aid.   Table 4 indicates that the University of Michigan-Dearborn ranks last among peer institutions in financial aid as a percentage of total expenditures.  This obviously has an effect on our ability to attract high quality students to the University.

 

Table 4

Financial Aid/Total Expenditures

 

University

                        Ratio

 

 

Michigan Tech.

                       .094      

Northern

                       .072

Eastern

                       .064

Saginaw Valley

                       .061

Ferris

                       .056

Grand Valley

                       .049

Central

                       .049 

Oakland

                       .047

UM-Flint

                       .045

UM-Dearborn

                       .036

 

High Reliance on Tuition

Exacerbating the consequences associated with a low percentage of student financial aid is the relatively high reliance on tuition revenue for operations at the University of Michigan-Dearborn (see Table 5).  UMD has the highest reliance on tuition as a percentage of total expenditures among peer institutions.  The CESF is concerned that budget projections are based on enrollment and tuition growth that depend on external factors such as demographics, over which we have no control.  Given the problematic nature of state appropriations, this becomes a critical issue for our campus.

Table 5

Tuition/Total Expenditures

University

                        Ratio

Grand Valley

                       .58

UM-Dearborn

                       .58

Oakland

                       .54

Saginaw Valley

                       .53

UM-Flint

                       .53

Eastern

                       .51

Ferris

                       .51

Central

                       .51

Michigan Tech.

                       .41     

Northern

                       .40

 

The CESF asks that the Administration to closely watch non-instructional operating costs for the recent additions to the campus.  Given UMD’s budget constraints, these represent a major obligation.

Appropriate and Timely Data

The Michigan HEIDI data should allow financial comparisons of the University of Michigan-Dearborn revenues and expenditures with those of other Michigan IIA universities.  From an historical perspective, HEIDI data have provided the faculties of Michigan IIA universities with information in a form that allows comparison of compensation among these universities. This year the CESF is thwarted in these comparisons by some obvious and glaring inconsistencies in the data.  As an example, for those disciplines common to both (or comparable between) UMD and UM-Flint, the average faculty compensation reported for UMD is approximately 40% higher than the actual average UMD faculty salaries, while the reported UM-Flint compensation is approximately 11% higher than average salaries.  Given that UM-Dearborn and UM-Flint have identical benefits packages, clearly the data are very inconsistent.  Other inconsistencies in the data have been observed.

Problems with the data prevent comparison of relative budget prioritization of instructional and non-instructional expenditures between institutions.  In past reports, CESF has highlighted the University of Michigan-Dearborn's relatively high, comparative non-instructional expenditures. Given the quality of the HEIDI data, CESF can do no more than suspect that the situation has not changed.

There appears to be no single source of accurate data among Michigan IIA institutions that either the CESF or our campus administration can identify.  The CESF needs reliable data in order to carry out its charge.

Conclusions

A prominent faculty member recently said, “Why can’t our deans and administrators make the main thing the main thing?”, meaning, “why can’t providing high quality, innovative undergraduate and MS degree programs be the main thing reflecting true value to our customers consistent with our budgetary realities?”  President Coleman addressed this issue recently.  Quoting the Ann Arbor News (May 7, 2003), “‘We need to be very careful about the decisions we make,’ Coleman said, warning of the effects of simply increasing class size and diluting the quality of coursework.  ‘I can tell you, demand will plummet.’”  The future economic status of both the University of Michigan-Dearborn and its faculty depends upon the vitality of and respect for its academic programs. It is crucial that our decisions and resource allocations reflect this reality.

Appendix A

Faculty Salary Statistics by Department and Rank
and Executive Salary Averages Over Time

Appendix A contains two general types of tables showing salary data.  The tables are provided by the Budget Coordination Office, University of Michigan-Dearborn.  The first table shows the minimum, maximum and average salary by college or school.  The subsequent tables, using the same format, further break down the data by department within each college or school.  The data are included here to document the current salary levels at this point in time.

Salary Ranges of Full-Time Faculty By School

Salary Ranges of Full-Time Faculty By Department

 

The last table in Appendix A shows average executive salaries from 1990-91 through 2002-03.

Executive Salary Analysis

In a memo dated September 12, 2001, Provost Simpson stated that $438,000 was needed to bring all UM-Dearborn faculty up to the discipline means of the ten comparable Michigan IIA institutions included in the study.  At the time an equity package of $200,000 was distributed to those faculty below their peer averages.  In FY2001 the merit program was 4.0% and for FY2002 it was 3.5%.  Unless the peer institutions have had no or minimal merit increases over the last two years, UMD faculty salaries are likely still below the mean values of the peer institutions.

Appendix B

Faculty Salary Statistics for the Campus, for Each College or School, and for Curators/Librarians

Appendix B contains a summary of the University of Michigan-Dearborn faculty salary data compiled in a common format that facilitates comparisons with similar tables prepared for the Ann Arbor and Flint campuses.  Six tables are provided being:

 

Overview for the Dearborn Campus

Overview for the College of Arts, Science & Letters

Overview for the College of Engineering and Computer Science

Overview for the School of Education

Overview for the School of Management

Overview for Curators/Librarians

 

Each table provides faculty composition by rank and gender.  Each table also provides the minimum, mean, median, and maximum faculty salary by rank excluding adjunct faculty.