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Is there any amount of money that university administrators can’t spend?

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The University of Chicago is one of the richest schools in the country, and it’s vastly wealthier than it was even a few years ago. Nevertheless:

Budget cuts are drawing protests at the University of Chicago amid worries academic departments are being asked to pay for a past construction boom — and faculty members fear that their historical influence on major decisions is being diminished.

Faculty members, students and staff have questioned a recent request to draw back academic division budgets by 8 percent as the university seeks an estimated $30 million in savings during its second round of cost cutting in two years. The university’s administration has indicated it needs to contain administrative costs as its overall operating budget has continued to grow.

The dean of the humanities division at the University of Chicago quit with a year left in her term today, underscoring pressures on scholars to cut costs and initiate layoffs at the Hyde Park campus.

Martha Roth, an ancient Near East scholar and dean for nine years, only hinted at the financial challenge in an email disclosing her resignation, effective June 30:

“I feel this is the best time for the division to have new leadership. The new dean will have the responsibility and the authority to make informed decisions about faculty hiring, and tenure and promotion; about graduate student admissions; and about personnel and support structures in order to chart the strongest future for our division.”

A colleague said she cited in a meeting last week an administration mandate to slice spending by 8 percent, on top of previous reductions, in the fiscal year that begins next month. Roth did not return phone calls.

Undergraduate tuition at U of C has doubled in constant, inflation-adjusted dollars over the past 25 years, from $26,000 to $51,500 (both figures 2016 dollars).

Meanwhile, the institution’s endowment has grown over that time from $1.074 billion ($1.97 billion in 2016 dollars) to $7.55 billion — a 283% increase in inflation-adjusted terms.

But it’s never, ever enough. The main drivers of out of control spending in Hyde Park seem to be the usual suspects: the edifice complex and administrative bloat:

The university’s debt has grown rapidly in recent years. Notes and bonds payable totaled $4.2 billion in 2015, up from just over $3 billion in 2011 and more than double the 2007 figure of $1.8 billion. The increase has come as assets listed under land, buildings, equipment and books are up sharply, rising to $4.4 billion in 2015 from $3.2 billion in 2011 and $2 billion in 2007. That would appear to hold with trends of the time frame, when many universities built facilities financed by debt in order to take advantage of what were seen as historically low interest rates.

Regardless of how the university arrived at its current financial situation, ratings agencies have taken notice. In February Standard & Poor’s downgraded the University of Chicago’s long-term debt rating, citing recent and expected operating deficits as well as high exposure to the health care industry due to the University of Chicago Medical Center and high maximum annual debt service costs. In its own ratings note, Moody’s Investor Service called the university’s employee benefit liabilities significant and said its exposure to the volatile health care sector could be a challenge.

Meanwhile, top administrators are vowing to bring administrative costs under control by firing a bunch of secretaries and research assistants:

When administrators briefed faculty representatives on the needed cost cutting, faculty members raised concerns about who, exactly, would bear the brunt, said Bruce Lincoln, a professor of the history of religions in the University of Chicago Divinity School who is on the Council of the University Senate.

“They spoke of it in terms of administrative costs, but in response to critical questioning it became clear what they had in mind was people with five-figure salaries, not people with six-figure salaries,” he said. “It’s not the vice presidents. It’s not the higher-ups in the administration that they think are bloated — in contrast to the opinion of a lot of faculty. But it’s secretaries and research assistants and lower-order people.”

Sounds like a situation that calls for some high-priced consultants to figure out how to synergize something something globalized disruption something thought leaders. I’m pretty sure these guys are available.

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