Many of you may have already seen the “Financial Update” presented to the Finance and Investments Committee of the Board of Trustees on May 14, 2020. We are writing first and foremost because we think everyone should have access to this document, and you can find it attached to this message.
Ideally, the administration would have responded to our requests for budget transparency and shared this with the GW community. Instead, someone *leaked* the document to GWUFA on May 19th. We consulted with various people to make sense of its significance, and Professor Joe Cordes ultimately presented on it at the May 29th CCAS faculty meeting (a meeting called by deans who also had not seen the document). We share our analysis of what we know about GW’s current financial situation below. We also want to express our continued dismay and outrage at this administration’s lack of transparent communication about the current crisis and GW’s response.
What does the document tell us? We asked Professor Cordes, whose long-time service on the Senate Budget Committee makes him the top campus expert on these matters.
The news was surprising to us: As Professor Cordes explained, also to the CCAS Faculty Meeting on Friday, GW is in strong enough financial shape to allow it to weather the current financial crisis even if some temporary cuts may be required. GW has already secured an additional $300 million line of credit on good terms, based on current low interest rates. “Having such liquidity on hand,” Professor Cordes told us, “provides an important cushion against the financial turbulence that GWU and every other university faces.”
As we in GWUFA understand it, this means that GW could handle even the worst-case situation outlined in the attached “Financial Update,” in which GW is entirely online and incurs an estimated $320 million budget shortfall. It would, of course, require GW to repay whatever of the $300 million loan we borrowed, but this would be over a period of years. Thus, we conclude that, although the financial side of this pandemic is serious, it is also short-term and poses no serious threat to the long-term well-being of GW.
We also find it significant and disturbing that the faculty have not been provided with a clear breakdown of the most extreme estimate of the $320 million budget shortfall predicted as the fallout from being online in the Fall. Where do these numbers come from? Can we trust them to be accurate enough to justify extreme “solutions”? This, to say nothing of the fact that the administration has, it seems, already rejected this option for the fall, but still uses the $320 as evidence of the financial crisis, strikes us as duplicitous.
Why is the administration creating an illusion of financial catastrophe? Why is Chair Speights speaking ominously of “pay or benefit reductions, early retirement options, furloughs or layoffs”? Why has she forbidden discussion, even in these extraordinary times, of increasing the payout from GW’s $1.78 billion endowment, a response that would leave the principal untouched? Why is the administration insisting on long-term structural changes to GW in order to meet a financial crisis that is temporary and already well under control?
We think it is the same reason we only learn about these things through leaked documents: the LeBlanc administration and the Board of Trustees are seeking once again to circumvent basic shared governance in order to shape GW according to their own whims. In the past these included the wasteful Disney “Culture Initiative” and a reckless plan to cut undergraduate enrollments by 20%. Together, the Senate and GWUFA pushed back on these plans. Now the administration is trying a new route: a cooked-up financial crisis that will allow it to continue an agenda that is deeply threatening to the core research and teaching mission of our university.
Some have suggested that during this crisis GW faculty should cooperate with this administration. But what would cooperation mean with an administration that exacerbates an environment of insecurity and crisis in order to ram through changes without any meaningful consultation with faculty?
So, what can you do? Start by challenging, at every chance you get, the misinformation from the administration that financial exigencies require us to make permanent cuts to our university. Suggest that if any permanent cuts are to be made, they should be to the ever-expanding and overcompensated upper administration.
Faculty can also express their views about the university administration’s response to COVID-19 online, here: https://facultyaffairs.gwu.edu/submit-feedback.
Now, more than ever, is a time for those of us who carry out GW’s core mission of teaching and research–faculty, staff, and students–to stand together and refuse to be intimidated by an administration that has treated us, and our university, with the greatest disrespect. Now is the time to start building the university we want inside the university we have. One idea that we think very worthwhile was presented by GWUFA Vice President Ivy Ken in a recent opinion piece in the Hatchet. Imagine if GW used its considerable resources to pursue such plans, rather than squandering them on overpaid upper administrators while threatening us with layoffs and furloughs.
We deserve better than this.
The GWU Faculty Association