Pioneer: UMass has a spending problem
University calls report ‘highly misleading,” says bottom line positive
THE PIONEER INSTITUTE continued its war of words with the University of Massachusetts on Monday, asserting that the five-campus system’s complaints about inadequate state funding are just not true.
UMass in the past has pointed to declining state funding as the explanation for its steadily increasing student fees. A week ago, in response to a Pioneer report, UMass also blamed inadequate state aid for its decision to ease admission standards for out-of-state students, who make higher tuition payments. “The university’s enrollment of out-of-state students has increased as state support for UMass has stagnated,” UMass said in a statement at the time.
Yet Pioneer said on Monday that state appropriations for the UMass campuses have actually risen 39 percent over the last five years, jumping from $519 million in 2013 to nearly $721 million in 2017. Pioneer said UMass operating losses have also mounted over that time period, rising from $511 million in 2013 to $720 million in 2017.
“The University of Massachusetts system has a spending problem, not a funding problem,” the Pioneer Institute said. The right-leaning think tank suggested UMass’s “unilateral expansion decisions” – including the recent purchase of Mount Ida College in Newton – are fueling the system’s budget problems.
The think tank even portrayed UMass’s steady enrollment growth, up 22 percent between the 2006-07 school year and the 2015-2016 school year, as a negative. Pioneer said the rapid expansion of enrollment is accompanied by larger and larger operating losses, and runs counter to national trends of declining enrollment and declining college-age students.
“Looking ahead, Massachusetts is projected to produce 12.4 percent fewer high-school graduates in 2031 than it did in 2012, yet its state university continues to grow unabated,” the Pioneer report said.
Andrew Mangels, the vice chancellor for administration and finance at UMass Amherst, issued a statement calling the Pioneer analysis “highly misleading.” He said Pioneer’s claims that the purchase of Mount Ida College will lead to operating losses and that UMass spends as it wants and then presents the Legislature with the bill “have no basis in fact and are unsupported by any analysis.”
Mangels did not dispute Pioneer’s claim of rising state support for UMass, but instead focused on the suggestion that the five-campus system is incurring operating losses. “The fundamental flaw in their summary is that non-operating revenues such as the state appropriation, federal appropriations (such as Pell grants), private gifts, and endowment spending are not included. When those non-operating sources are included, UMass’ bottom line is positive,” he said.“UMass’s operating margin has been positive over the period for which they cite losses,” Mangel continued. “They also inflate UMass’s state ‘subsidy’ by including increases in the fringe benefit rate for state employees, which is set by the state and not appropriated to UMass.”
Mangels said the state’s investment in UMass has paid big dividends, including $6.2 billion in economic activity (according to an analysis of 2015 by the UMass Donahue Institute) and the employment of 16,777 direct employees and 26,870 others whose employment flows from university operations. He said the five campuses also help the state meet the growing demand for talented employees. “UMass Amherst alone educates more Massachusetts residents than the state’s top eight private universities combined and awards more undergraduate STEM degrees than any other college or university in the state,” he said.