State Budget Cuts "Hurting" Arizona State

From the National Jurist:

As state governments struggle, many have slashed their high-education allocations. . . At Arizona State University Sandra Day O'Connor College of Law . . . Dean Paul Schiff Berman has suggested a five-year plan where tuition will rise between 5 to 10 percent and student enrollment with increase from about 195 to 225 per class.

Other schools facing "significant shortfalls" mentioned in the article include Minnesota, Michigan, and Virginia.

But what strikes me about the article is that their definition of "significant shortfall" seems to be slightly different than mine, especially as it applies to Arizona State. To wit:

"The University has asked us to find a way to make us self-sufficient with regard to our operating expenses," [Berman] said. "That requires us to generate about $6.5 million more than we currently generate over the next five years."

Arizona State, as a whole, received approximately $380.93 million in state appropriations for the 2010-11 fiscal year. If the law school only has to make about $6.5 million over a 5 year period to become de facto private, that means that, excluding interest considerations, its 2010 revenue from the state is about $1.3 million, or about 0.3% of Arizona State's total take from the state.

That is a paltry, token amount that few law schools wound have any serious trouble raising (or finding in the budget, if necessary). Arizona State tuition is current $21,598 for in-state residents. At that total, adding 30 in-state students would raise roughly half the yearly total instantly with almost no additional burden on the school as long as they have auditoriums that seat more. If alumni fundraising drives couldn't raise the other $650,000, across-the-board salary cuts of like 8% (or equivalent layoffs) would take care of the rest (this is a rough estimate looking at their number of staff and guessing an average salary of over $100k, which is reasonable given that it's a top-50 law school).

Even a modest tuition increase, like the one Berman proposes, isn't that bad (although I think staff and program cuts should come before tuition increases as a matter of ethics).

But I have a problem with Berman's general attitude towards the situation.

Berman said students will be minimally impacted by increases in tuition and class size. To that end, ASU is boosting its financial aid to qualified students, and it has created a post-graduate public interest fellowship program, designed to provide a stipend to students entering the public sector. And first-year students are looking at following the example of their 3L peers by creating a fund-raising effort to help fund new scholarships. (Emphasis mine)

Wow, what a business running a law school must be.

• Your consumers are "minimally impacted" by paying $9,000 (over 3 years) at 7.5% interest.
• Although your budget has a "significant shortfall," you can boost financial aid (discounts) to guaranteed customers (e.g., to boost offers to high LSAT kids) and give out stipends to boost your post-graduate employment numbers.
• Your current consumers are setting up voluntary, unpaid fundraising drives to help with your expenses.

And now you get the advantage of being free of the guesswork involved in state budgeting.