In late July, University of Montana President George Dennison sent a letter to UM students explaining that because of budget shortfalls in the University System, students should expect their education to be more costly than anticipated.
“Working together,” Dennison wrote in the letter, “we will overcome this current financial challenge. We will protect the quality of education as the highest priority.”
The rising cost of education in Montana is nothing new. Over the last four years, tuition at UM has increased by nearly $500. However, with all the talk of togetherness, it appears that students—not well-paid administrators like Dennison—will be footing the bill.
In a recent meeting of the Montana Board of Regents, the University System’s highest paid employees voted for a pay increase ranging from 4 to 6 percent. For President Dennison, this meant that his yearly salary increased to $143,986. His raise, $5,538, is tapped from the general fund, and paid for in part by the students whose tuition was recently increased.
Imagine that UM’s budget is a series of interconnected buckets, each filled with whatever money the state and the students can provide. The largest bucket in the UM budget is the general fund. This bucket, some $97 million deep in fiscal year 2003, is filled two-thirds with tuition and fees from students, and one-third with funding from the Montana Legislature.
Historically, the Legislature contributed a larger percentage of funds to the University’s budget. But while UM has grown in leaps and bounds over the last decade, state funding has remained stagnant. As a result, the University has grown increasingly dependent on student-generated fees to support itself.
In recent years, the Legislature has been more and more reluctant to provide funding for the University System. During August’s special session of the Legislature, $12.4 million was cut from state-funded higher education.
The effects of this cut were immediate. UM students saw an increase in tuition costs of almost $200 for the fall semester, and were assessed an additional surcharge of $2.50 per credit, a charge that will increase to $10 per credit in the spring.
Given these tuition hikes and lean financial times, not all of the regents agree that President Dennison and his counterparts should receive such a hefty pay raise. Regents Christian Hur and Bob Mercer voted against the pay increase, preferring instead a more conservative raise for university employees whose salaries are in excess of $100,000. Had that measure passed, it would have allowed for no more than a $1,765 increase each year for such employees.
Hur, who is currently a UM student, says, “These are people who, if their pay was frozen, wouldn’t have been hurt at all. By any standard of government employees [in Montana] these individuals are within the top 5 percent.”
Even ignoring the fact that Dennison and his colleagues are paid between four and five times the average Montana income of $32,553 per year, there are added benefits to being a university administrator. Dennison, for example, has access to UM’s health care package, a free car, and the free use of a home in the University area.
“There’s also the added benefit of business trips to Asia,” Hur says.
Admittedly, a university president makes significantly less in Montana than in almost any other state, one of the primary justifications for the pay raises.
“If you hire good CEOs, they bring value to the whole organization,” says Bob Duringer, vice president of administration and finance at UM. “The decisions that bad CEOs make can be very costly.”
Duranger is also skeptical of the argument that university presidents are overpaid. The job requires a hard-to-find set of skills, he says.
“Let’s get bricklayers to run this school. Let’s get the custodians to run this institution,” Duringer says. “You pay for what you get.”
In addition to President Dennison and chancellors at campuses around the state, Richard Crofts, commissioner of higher education, also received a pay raise. His salary was increased to $144,506.
Regents Hur and Mercer think that’s too high as well. They also charge that Crofts has done little to answer their specific questions about the University’s budget.
“I feel like we’re not doing the job we’re supposed to be doing,” Hur says. “The fact is, we’re encouraged not to use staff time to get answers to our questions, and we’re not given the information we need to make decisions.”
As an example, when the regents were debating the most recent surcharge, they were told by Crofts and other administrators that the quality of education would suffer if the surcharge was not assessed. But they were given no specific details as to how it would suffer, Hur says. The regents simply had to accept what they were being told at face value.
“The administrators don’t want you to involve yourself in the budget,” says Mercer, who believes that the administrators’ wages should be based on leadership.
“In Montana, we’re asking students to pay more each year for the same service,” he says. “To show leadership, we should limit the administrators’ raises. We want people in our higher education who aren’t just here for the money.”
Mercer has elected to receive no pay for his role as regent.