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Amid tougher times, spending on payroll soars at Michigan universities
Michigan universities increased their spending on administrative positions by nearly 30% on average in the last five years, even as university leaders say they've slashed expenses to keep college affordable for families.
The number of administrative jobs grew 19% over that period at the state's public universities, according to data submitted by the schools to the state budget office.
• Database: Compare salary increases for administrators at 15 state universities
Meanwhile, faculty compensation went up 22%.
The increases took place from the 2005-06 school year through 2009-10 -- a period in which both student enrollment and state funding of universities remained about the same, state data show. The higher administrative costs were slightly exceeded by tuition hikes over this period.
The schools say the additional $260 million spent on administrators statewide doesn't provide a full picture, and is in many instances justified to recruit and keep top personnel to stay competitive. They add that credit hours are up even if enrollment isn't, meaning more employees are needed.
"It's still a small number," Michael Boulus, chief lobbyist for the schools, said of the spending, especially when spread over 15 universities.
But critics say the universities are out of step with the sacrifices made in the public and private sector in Michigan during a punishing economy.
The numbers, published in February by the state House's Fiscal Agency, come as university presidents are lobbying lawmakers to limit proposed budget cuts and warning that a drop in aid will mean higher tuition bills for students.
"It's very frustrating from a legislative point of view," said state Rep. Bob Genetski, R-Saugatuck, chairman of the House subcommittee on higher education. "Some of the universities seem to be doing a good job managing their money, others not so good." Universities defend spending more on compensation
After spending 15 minutes earlier this month trying to convince state legislators that the University of Michigan was pinching pennies everywhere -- including on how many flowers it plants on campus -- President Mary Sue Coleman sounded a different tone when talking about employees' salaries.
"I am not going to punish people for doing a good job," she testified at a committee hearing. "We want the best and work hard to keep them."
Recruiting and rewarding U-M employees led to spending increases, especially among administrators, though officials say some of those costs were reimbursed by research grants. Still, data submitted by U-M show university spending on administrative positions -- including raises and new hires -- grew 27% over the past five years.
(Coleman's own salary rose roughly 14% over this period, to $570,000 -- though she took a pay freeze one year and donated another year's raise back to the school.)
That 27% was less than the average increase at Michigan's 15 public universities.
On average, state universities increased their spending on administrative positions by 29.5% in the past five years, with much of it funding a 19% increase in administrative positions, state records show. Faculty compensation rose 22%.
The increases come as Michigan tries to weather its worst economic storm in decades.
The universities say they need to pay to attract top talent and have added administrators to improve their academic offerings and to assist students. They say they must also hire fundraisers in some cases to seek donations to replace lost state aid.
New programs also bring higher costs.
"When you add a rare-isotope machine" at Michigan State University, "you're going to be hiring" professionals to run it, said Michael Boulus, executive director of the Presidents Council, State Universities of Michigan, which represents the schools in lobbying and other matters.
But accounting professor Howard Bunsis, treasurer for the faculty union at Eastern Michigan University, views the spending as excessive.
"There are too many administrators making too much money," he said. The numbers
Last Wednesday, Michigan State President Lou Anna Simon sat in the House Appropriations Committee room and sounded nearly the same notes about cost-cutting as Coleman had given three weeks earlier.
Afterward, Simon defended pay for MSU's staff, saying, "You've got to recruit good people."
She said the university needed to offer competitive compensation packages. She noted that she hasn't received a salary increase in the last three years, though her pay the two years previous rose 22% to $520,000 a year.
Overall, the amount MSU paid for its administrative staff jumped 41% over five years.
In a written explanation to lawmakers, MSU said that, when compared with other major research universities, MSU has about half as many administrators as its peers.
But critics dispute the universities' assertions that they are lean.
"Universities are enlarging their payroll" while "at the same time consistently beating the drum that the state has to appropriate more money to them," said Michael Van Beek, education policy director for the conservative Mackinac Center for Public Policy.
"There's a lesson here in bureaucratic bloat."
Van Beek said one reason for the increase in administrative positions is that as schools increase research, they need more administrators to manage those projects. He complains universities are getting away from teaching students.
Bunsis of EMU agrees: "Administrators at our Michigan public institutions are not committed to the core academic mission of educating our students."
Mike Washington, a Livonia parent who is paying for his son to attend MSU and for his daughter to attend Grand Valley State University, had similar concerns.
"I don't mind good teachers getting raises," he said. "They're helping my kids learn. I'm not happy about big raises for administrators. I don't think they make as much of a difference in what my kids learn. I think the universities could probably spend less on administrators and be OK."
Grand Valley had the highest jump in spending on administrators, climbing 48%.
That increase is tied to an 8% growth in enrollment -- while the school has also hired more counselors and advisers to work with students, spokeswoman Mary Ellen Lyon said. Lyon said a decrease in state aid earmarked for capital projects has prompted the university to hire more fund-raisers to bring in private money to replace that state aid.
Wayne State University had the lowest percentage increase in spending on administrators' positions, growing by 14.8%. That's because WSU has worked hard at creating efficiencies, said Robert Kohrman, associate vice president for budget, planning and analysis.
Another angle to the numbers
Although university officials don't dispute the numbers, they say the numbers don't paint a fair portrait of the universities' spending.
U-M officials say the money paid to some administrators in their research is initially charged to the school's general fund but is then paid back by research grants that the university gets.
They also argue that the faculty compensation figure is artificially low because it doesn't include money that many faculty get from other sources, such as grants or endowments.
Officials at Lake Superior State University, where administrative costs rose 36%, cited new leaders and promotions.
"We have had two new presidents and two new academic vice presidents over the past five years," spokesman Thomas Pink said.
"With realignment of positions, a faculty member who accepts a department head position may then be classified as an administrator. With the restructuring over the past several years, there have been increases and decreases in the number of department heads, department chairs, etc."
Boulus said a more accurate picture of administrative spending can be found by comparing the compensation for an average administrative position. In 2005-06, that number was $86,733. By 2009-10, it had grown about 9%, to $94,397, state data show.
What the 9% increase doesn't reflect, however, is that there are now 1,931 administrators who have been added to the payroll since 2005.
At Oakland University, where administrative compensation rose 41%, spokesman Ted Montgomery noted OU spends about $12,470 from its general fund per student, below the state average of $16,743. That's proof, OU says, of its fiscal responsibility.
As OU marches toward opening a new medical school, it has also begun hiring administrative staff to get the program ready.
"These positions, which also include the dean and associate deans of the medical school, are paid more than the average administrator at the university, due to the market for medical school positions," he said.
At Western Michigan University, where spending on administrator compensation is up 18%, spokeswoman Cheryl Roland said the school has added administrators to work with struggling students. "WMU has moved aggressively to improve student support services," she said.
Ferris State University said its 25.5% hike in administrative compensation is skewed in 2010 by the offering of an early-retirement benefit to non-faculty staff. If spending on that incentive is knocked out, the increase over the last five years is actually 17%, Ferris officials said.
At Eastern Michigan, officials said the growth in the number of administrators is artificially high because many positions were open in 2005-06 because of unrest while an interim president ran the school and positions were left unfilled. Cuts coming?
As EMU President Susan Martin looks at Gov. Rick Snyder's proposed higher education budget, she sees pain ahead. She says the cut, which could be between 15% and 20%, could put kinks in EMU's budget.
"We will not be able to increase financial aid and may have to decrease it," she told legislators. "Tuition will increase."
Snyder said that the proposed cuts don't have to devastate universities, spokeswoman Geralyn Lasher said, adding that Snyder said he thinks universities can "live within" the proposed budgets.
Even with the cuts, Michigan's universities are still going to go out and hire good people, both as faculty and administrators, Boulus said.
"We still want good people," he said. "We still value good people."
Contact David Jesse: 313-222-8851 or djesse at freepress.com