Penny Pinchers Dodge Cuts At University Of Michigan

The Great Recession hit universities hard and caught many off-guard. Many are now facing drastic budget cuts. But at the University of Michigan, a culture of cost-cutting has largely spared the campus from the pain.

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This is WEEKEND EDITION from NPR News. I'm Scott Simon.

These are trying times for most of the nation's top public universities. State budget shortfalls are forcing major cuts and tuition increases. University of California is among those hurting. In a moment we'll speak with the university's president.

But first, to the University of Michigan, where President Obama delivers the commencement address today in Ann Arbor. Officials in Michigan say theyve managed to so far avoid severe cutbacks. How do they do this?

NPR's Tamara Keith reports.

TAMARA KEITH: It's simple. The University of Michigan cut costs by focusing on the little things.

(Soundbite of dumping trash)

KEITH: Custodians like Ryan Skelley(ph) used to empty desk-side trash cans every day. Now its just twice a week.

Mr. RYAN SKELLEY (Custodian): Let's see, I think its Monday and Wednesday I do the third floor.

KEITH: Cutbacks from trash pickups and a push to get employees to recycle more combined for some serious savings, says Richard Robben, the university's head of plant operations.

Mr. RICHARD ROBBEN (Director of Plant Operations, University of Michigan): The net benefit was about 600,000 a year. Incredible. You take little things, multiply it by the size of the university, and it really adds up to big numbers.

KEITH: And yes, he says, there have been some complaints. But penny pinching has become a way of life at the University of Michigan. Over the past seven years the university has cut $135 million in what would've been recurring expenses from its budget.

Terrence McDonald, dean of the College of Literature, Science and the Arts, says it started in 2002, when the university was hit with a sudden cut in state funding.

Dr. TERRENCE MCDONALD (Dean, University of Michigan): We had to do a 10 percent budget cut that year.

KEITH: At the time he was only interim dean and he says it was an awful experience.

Dr. MCDONALD: From then on we have been very, very careful, strategic and concerned about revenue and expenditure.

KEITH: In a way you could say the University of Michigan has been preparing itself for the recession that hit in 2008 for years. McDonald is a history professor by training, but you'd think he stepped straight out of the business school with his spreadsheets and emphasis on efficiency.

Dr. MCDONALD: Colleagues say I didnt get a PhD to worry about the budget. Well, of course neither did I, for that matter. But I think we're in a moment of historic challenge, which is that both to the public and to our parents and to others we have to show an incredibly cautious stewardship of these resources. Otherwise the university as we currently experience it is not going to be the same.

Professor REGINA MORANTZ-SANCHEZ (University of Michigan): I want to begin by reminding you of the political backlash that I discussed last week...

KEITH: In Regina Morantz-Sanchez's Women's History class, there are no obvious signs of the campus-wide cost-cutting regime. And that's the point, says Tim Slottow, the University's CFO.

Mr. TIM SLOTTOW (CFO, University of Michigan): Weve tried desperately not to affect what a student experiences or what a faculty member experiences, but its everything else.

KEITH: The University's health and pension plans have gotten less generous. There's a campus-wide energy conservation campaign that's saving millions. And, Slottow says...

Mr. SLOTTOW: So we used to print paychecks and we would fold them and we would put them in an envelope and we would put a stamp on the envelope and we would send it out to our 35,000 employees. Right? We no longer do that.

KEITH: Everyone gets paid electronically now. Slottow says this and other paperless innovations saves several million dollars a year. And so now, while many other universities are slashing, Michigan continues trimming one to two percent a year. And Michigan is still hiring faculty.

Mr. PHIL HANLON (Vice Provost, University of Michigan): Right now it's a terrific market if youre hiring people in academics.

KEITH: Phil Hanlon is the vice provost and he says the university has been able to recruit some of its top choices.

Mr. HANLON: There have been times when people on campus have been frustrated that weve maintained so much discipline, but they're not frustrated right now.

KEITH: The University isn't done. In the next three years, Michigan plans to trim another hundred million dollars from its budget.

Tamara Keith, NPR News.

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