CFAC Statement: “This administration has spent recklessly for years and continues to do so. Dr. Kim, against protests from faculty and students, built a $50 million Student Center, and the college is locked into a debt cycle. Last year alone, the college spent almost $4 million servicing interest on debt. That's twice the amount the Provost wants to save by cutting our classes. It’s wasted money. It’s bad management.” [October 20 CFAC forum]
Response: We believe the Student Center has been and continues to be a valuable resource for students to study, build community, and create a safe environment. Setting this aside, 75 percent of the college’s debt results from borrowing that took place before President Kim’s administration. The $3.7 million annual debt interest is reasonable for an institution our size, and also, in 2019, the college retired, i.e. paid down $11 million debt early.
CFAC Question: “Where Does the Money Go?” [October 20 CFAC Forum]
Response: The college’s finances are publicly available: The college reports key financial data to the IRS and posts those completed IRS forms on the college website; an external auditing firm puts together audited financial statements for the college, which are posted on the college website, and other charts and tables are either posted or shared in various settings with campus stakeholders. The following chart shows that, between 2019 and 2023 (a time span during which enrollment decreased 6 percent), instructional department spending decreased 4 percent; spending on student services is down less than 2 percent; the academic administration budget decreased 30 percent; and college administration increased 12 percent – driven in large part by increases in security costs (pay increases to security personnel by our security contractor, rising costs of college insurance policies, increased IT software and hardware costs, with those costs passed on to the college), staff compensation increases and COVID expenses.
The largest financial change is that, due to changed economic trends and student and family expectations, Columbia is spending $77 million on student scholarships this year to support families and our mission. That amount is double what it was in FY18.
College expense trends are below:
CFAC Statement: “The administration won’t even discuss course cancellations, rising class sizes, and curriculum changes with us at the bargaining table.” [October 20, 2023 CFAC forum]
Response: The union is free to disagree with what the college says or puts on the table, but to repeatedly say that the college is refusing to bargain is simply untrue.
On August 25, President Kim’s chief of staff and the college’s special counsel for Labor Relations met with the union president and her outside legal counsel and asserted the college’s management rights to make decisions to which the union objected, but they each stipulated that the college was willing to bargain over the impact of those decisions on members. In September, the union president denied this happened, and the college emailed the union stating, “The college remains prepared to discuss the impact of section reductions and increased class sizes.”
The next morning (September 20), in bargaining, the union made what it called a “supposal” that would have given the union a veto over course offerings and class size decisions and would have in any event capped any enrollment cap increase for any class to two (regardless of the initial size of the section), with the college paying the instructor $500 for an increase of one student and $1,000 for two students. While the college did not agree to the “supposal,” it was discussed at length during the two-hour bargaining session.
On September 27, the special counsel for Labor Relations emailed the CFAC bargaining committee to say:
“While the parties are not in agreement that course offerings and class size are mandatory subjects of bargaining, we remain willing to discuss the impact of recent decisions to reduce sections and increase class size in certain cases.”
Response: Although the college does not agree to the structure suggested by the union, it is open to further discussion about the following framework:
Regarding section reductions, the college is willing to discuss the availability of impact payments for certain instructors who, as a result of section reductions made pursuant to the Provost’s directive, apply for but do not receive any courses for which they are qualified for two concurrent semesters. Such a payment provision would apply to instructors with seniority who have taught a minimum number of courses over the past few academic years.
Regarding class size, the college cannot agree to place veto control over such inherent management decisions with an employee committee or to pay instructors extra based on each additional student. The college is, however, willing to make paid training and other resources available to instructors to enhance course delivery for a significantly larger class.
The college looks forward to continuing discussions about the particulars of such a framework.”
On several occasions after that, the union acknowledged the communication but refused to discuss that language or impact in general.
CFAC Statement: “Inventing a Crisis: The college had been operating at a deficit for years. However, the moment we sat down at the bargaining table, what was previously called the “strategic deficit” became a “crisis” and suddenly it’s up to faculty to make the sacrifices.” [October 20, 2023 union forum]
“It’s up to faculty” response: For years, the college has made cuts that have impacted every employee group – staff, administrators, and full-time faculty – except part-time faculty. Under President Kim’s leadership, annual expenses have been curbed by $40 million. Since 2019, there have been 124 staff, administrator, and full-time faculty position eliminations – 41 of them outright layoffs. There have been benefit cuts, and the costs of other benefits have gone up. Many non-CFAC employees went without raises for years while CFAC got raises. While these cuts have avoided a significant worsening of our deficits, they have not led to significant decreases in deficits. Therefore, we have to broaden the scope of measures being taken – by finding efficiencies in the instructional budget and by finding additional efficiencies this year and following years in non-academic budgets. There is no question that part-time faculty will lose sections to teach under the changes to course offerings and class size. But it is simply not true that just one employee group is being asked to make all the sacrifices.
“Inventing a crisis” response: We have spent $80 million in deficit since 2019 – only $25 million was initially planned for strategic deficit spending to jumpstart an enrollment turn-around. This year, we will add $20 million in deficit spending, for a total of $100 million, which is depleting college resources. These issues were brought up by the college long before negotiations with CFAC even started. The union keeps denying this is really happening, but ignoring a crisis does not mean it’s not there.
It is important to know the college essentially has three sources of funds to meet operating expenses: Tuition revenue, cash reserves, and the endowment. Columbia’s income (made up mostly of tuition) has covered only about 90 cents of every dollar in costs, requiring the college to draw upon reserves and the endowment.
As a result of this, cash reserves, built over years to help the college weather difficult times, are projected to be depleted by the end of the fiscal year 2024-25.
This means the college will need to shore up cash reserves with large withdrawals from the endowment. If no corrective action is taken, the endowment – which currently remains healthy at about $190 million, would decrease to $90 million in five years.
For these reasons, the Board has directed that decisive action be taken above and beyond the efficiency measures already taken in recent years. These measures include reducing some sections and increasing class size where academically feasible. We have been clear that this will result in a larger share of classes being taught by full-time faculty, and that there will be fewer sections taught by part-time faculty. This is what the part-time faculty is threatening to strike over.
CFAC Statement: The union has said the administration is planning to move the college to a for profit model.
Response: No. We have not ever considered it, nor would we. For-profit models are wildly different than the non-profit model we operate under. One of the big differences between for-profit vs. non-profit is that the Board of Trustees get paid in a for-profit model, and there are investors who have nothing to do with the institution who receive funds that would otherwise stay with the institution. Our Board is made up of volunteers who are doing this because of their interest in Columbia. I am not aware of a private, nonprofit institution shifting to a for-profit model before, and we are not interested in exploring this.