In a letter addressed to faculty and staff union leaders dated September 23, 2020, Ben Barnes, the Connecticut State Colleges and Universities chief financial officer, requested help in identifying savings from current collective bargaining agreements. Barnes’ letter followed a September 17 directive from the CSCU Board of Regents. The Regents asked Barnes to find cuts that would resolve a projected $91 million deficit.
If there is one lesson we should take from 2020 it is that predicting the future is not easy. The prediction of a deficit was conjured by Barnes himself.
I studied forecasting in graduate school. Even after having read Barnes’ “Attachment B Revenue Update” to the Board of Regents minutes, I could not determine his methodology. This seems to be a pattern among the budget-erati in Hartford. I’ve looked at “consensus forecasts” for state coffers over many years and they do not inspire confidence.
Instead they exhibit a persistent, pessimistic bias. This is exemplified in Barnes’ own revenue update, in which he acknowledges that his forecast for student enrollments was incorrect by a margin of 45% (he projected a 10% decline and the true decline was 5.5%). On September 1 the state Comptroller projected a $2.1B state government budget deficit for the 2021 fiscal year. One month later the projection improved by $230 million. As a practitioner of “the dismal science” I recognize excess pall when I see it.
Even in fairytales the villagers learn to ignore those who cry “wolf” too often. Yet here we are responding to these shouts.
In numerous opinion pieces I’ve read the announcements of the “departure tribe” who have decided to leave Connecticut due to some perceived unforgivable flaw. I wouldn’t blame anyone who allowed this negativity to cloud their view of our state. Yet just this month we learned that Connecticut is a top destination for those who have relocated across state lines. Our state’s peak unemployment rate during the pandemic was 4.7 percentage points below the nation’s peak.
I know I seem Pollyannaish. Yet even if you accept the gloomy crystal ball prognostications of Barnes and company, the plan to cut education so drastically smacks of false economy.
But shouldn’t we at least talk about whether it is appropriate for bond holders to take a haircut so that we can still effectively educate students? It is not a foregone conclusion that our lenders should be completely shielded from adversity.
At over $3 billion, our state’s “rainy day” fund is so large it exceeds the maximum allowed by law. I will admit that we’re experiencing a rainy day. Actually, it is more like a monsoon season. Barnes is trying to find cuts amounting to 3% of our precautionary savings. Didn’t we save this excess cash precisely so that we don’t cut vital long-term educational investments amidst a crisis? By hamstringing college and university budgets we risk transforming our temporary difficulties into permanent struggles for our youngest adults.
I agree with Barnes’ claim that pandemic-induced emptying of dorms on campuses creates a financial strain. But why are those who teach and support students under difficult and arguably life-threatening circumstance asked to bear the brunt of this development? I understand that millions upon millions of dollars were borrowed to build dorms and the revenues are simply not there to cover the loan (interestingly, Barnes is mentioned in the prospectus of these loans). But shouldn’t we at least talk about whether it is appropriate for bond holders to take a haircut so that we can still effectively educate students? It is not a foregone conclusion that our lenders should be completely shielded from adversity. I know this might not be popular among the “hedge fund” crowd, and their friends, in Connecticut. Still, it is an option we should at least consider if we take CSCU President Mark Ojakian’s at his word that nothing is off the table.
It is unfortunate that decisionmakers in Hartford are taking the stance of austerity towards college students, faculty and staff. Austerity has failed in a wide variety of locations, ranging from Kansas to many countries in Europe.
At the end of the day, I’m left to conclude this is driven by politics more than anything else. Many elected officials apparently worry about election year attacks from their flank based upon the notion that, because the private sector is suffering during the present recession, state employees should be forced to suffer as well. Of course, that is simply a vicious, downward spiral which will only amplify the crisis. It is not a strategy for turning around our state and brightening the future for generations to come. The sooner we realize this the better.
Brendan M. Cunningham, PhD. Professor of Economics, Eastern Connecticut State University.