S1:E22 Andrew Comrie – University budgets demystified
Andrew Comrie joins to discuss university budgets and what budgetary constraints are along with some of the common misconceptions about the flow of money on campus.
Tyler Jacobson 0:01
Welcome to LabChats, a podcast from the team at LabStats. I’m Tyler Jacobson, your host for today’s episode. Each week we’ll sit down with technology leaders in higher education to get the latest buzz and insights while we discuss current events, trends, problems and solutions. Now let’s get into it. Today for LabChats, we are joined by Andrew C. Comrie, who is the author of “Like Nobody’s Business” and “Insider’s Guide to How US University Finances Really Work.” Andrew, you want to give us a little bit more background on your background and area of expertise? And how in the world did you get involved in university finances as an area of expertise?
Andrew Comrie 0:43
Yeah, thanks, Tyler. Glad to be on. Well, let’s see, I was just a regular old faculty member back in the day, and then for a variety of reasons got into central administration. Initially I was a dean, and then I became Provost here at the University of Arizona. And over the course of about a dozen years during those jobs, including some time in the research office, I had to learn kind of how the money worked in the university. And it turns out that we all have pretty simplistic ideas of how that worked. But to, of course, be an administrator and manage units, particularly once I became Provost, I really had to understand the whole kind of financial wiring diagram, in fact, the entire business model of the university, and there is no ‘User’s Manual’. There, you know, there’s a CFO there, people understand all kinds of accounting, and they all are amazing and incredibly useful at their jobs. But when you’re trying to manage both the function and the mission of a giant nonprofit like a university, then you have to kind of understand the financial side and the business side, so to speak, as well as the academic side. So long story short, I ended up doing a lot of talks on campus with alumni and board members and others about how that worked. Because there’s a lot of myths and a lot of misunderstanding about University budgets and how they work and how the business of the university works. And when I stepped down from being Provost, I said, “You know, a great project would be to write this down and explain it in the way I’ve gotten used to as a sort of a giant FAQ,” if you want, which turned into this book about how the money works on campus.
Tyler Jacobson 2:31
And I have started reading the book, but as you said, it’s not a short piece of work. We’re at 489 pages. And you’ve also one of the things that really impressed me is you made this book something that’s a free download. Why did you decide to make it free?
Andrew Comrie 2:49
So one of the things I discovered while doing this job is I…when you’re managing a large organization, one of the fun parts is you get to learn a lot from your colleagues, all of whom at the university are really smart people on the cutting edge of what they’re doing. And I had some overlap with some of the librarians on our campus who are big time into the open access movement. There’s a whole discussion we can have about the cost of journal articles and bundling. And the sort of technological changes involved in the public publishing industry, and that kind of thing. Anyway, there’s a large movement for what’s called “Open Access”, which changes from the classic paywall model to a variety of others basically. And I knew about it there. And then as I was looking to publish the book, I also…there’s over 200 color figures in the book, it’s very figure heavy. I’m a climate scientist in my other life, I plot things in graphs all the time. And that’s what I did with this book. So it’s a picture book, with a few words to explain things. And I needed to have lots of color figures. I was not going to sit there with…unbelievably, I mean, some of the classic university presses and others still use black and white printing technology that was invented by Gutenberg in the 21st century. I do not understand this when we have print on demand, electronic publishing, and everything else. And so it pushes the price up radically. I mean, a book that would sell for 20, 30, 40 bucks, black and white, whatever, you know, they can sell for well over $100, maybe even $200 depending. And that would be cost to them because of the way the industry is structured right now. So I said all right, jumping over that it wasn’t gonna work for me. And I found a really great open access publisher, open book publisher [that’s] actually based out of Cambridge, in the UK. They’re a spinoff from Cambridge University. And I decided to try them and they liked the book and we ran from there. So now I have a book that has plenty of color figures and still retails would have done about the same time if you want to buy a printed copy. And yet you can get a free download because of the open access model that we use. We don’t have to have a pay wall so that means I can get the message out to people who should understand it. That was great. So as of a day or two ago it was coming up on 3000 downloads, which I’m reasonably impressed with for myself, if I might say so.
Tyler Jacobson 5:12
That is impressive, especially for a topic that most people don’t want to spend the time to dig as deeply into as you have gone. So I think that to start off with…the numbers that people are typically familiar with is what they see in the news, which is this university has this many millions of dollars in their budget. And then the next number is “How much was cut last year?”
Andrew Comrie 5:38
Yup.
Tyler Jacobson 5:38
So where do we go from there to get a basic understanding of university budgets?
Andrew Comrie 5:44
That’s a great question. And the first thing is that the university budget completely correlates with size. Not so much the size of the student body, although that’s pretty close. But it really correlates, of course, with a number of employees, like any other service related business, and that’s partly what we are, where our biggest cost is labor. And so the size of the employee pool is the size of the budget. So a large public university, you know, the flagship or the large state university, most states might have a budget on the order of a billion or 2 billion dollars, which sounds huge. But they might have, you know, 6, 7, 8, 10, 12, 15,000 employees, only, you know, a certain percentage of whom are sort of classic teachers. But then there’s support staff and groundskeepers and everybody else in between, as well. So the core budget is really related to the size of the labor force working at the university. And then of course, it’s scaled naturally around the number of students being taught and many of the other activities if it’s a research university, this research component, so forth.
Tyler Jacobson 6:51
Okay, so you have excluded for-profit institutions from the scope of your book. Why did you make that decision? And do the concepts still apply for the for-profits?
Andrew Comrie 7:04
Great question. So I excluded for-profits, A). because they’re actually quite a…in the grand scheme of things are really a much smaller segment. Also, I just physically do not understand them, I have not worked in the for profit world. And by definition, they are… their business model is completely different to the nonprofit model of the bulk of public and private colleges. The book covers almost 1,200 four year schools in the US, which is essentially all the four year schools in the US. And I didn’t do community colleges. And then because they have a somewhat different arrangement. And mostly are two-year institutions, and I didn’t do the for-profits, because they’re just very differently configured and don’t sort of really conform to the same…they’re making decisions based on different principles. Yes, they’re in the education business. But it’s a very different segment, and very limited. And their mission is not the same. So they didn’t fit well. I have in places, including actually in the online section in the book, included for-profits here and there, because they’re really relevant to that discussion. But as a general inclusion, I did not, I did not put them in. Because their model is completely different. And what they do is quite a bit different to what a run of the mill, public or private institution does.
Tyler Jacobson 8:24
So a lot of…like you say, not for-profit, but anybody that either is in school, or has kids in school, it feels very much a for-profit with the tuition prices and things like that. So where did…what are the different revenue streams? Where do they get their money from? How are they going to keep tuition rates down? What are some of the challenges that they have in the solutions they find for it?
Andrew Comrie 8:51
That’s a huge question. In fact, that’s about half the book but I’ll try to give you some bits and some highlights there. So yes, you know, it’s very real. College tuition in a generation is much higher than it used to be and there are several reaso