It's hard to know all the details about why someone has been shown the door. But in the case of Keith Motley, the outgoing chancellor of the University of Massachusetts Boston, the publicly stated case made by top UMass brass is a shameful mix of obfuscation and scapegoating.
Back in the spring of 2016, Pioneer released three lengthy studies of the University of Massachusetts' strategy as it relates to finance, capital expansions, and student enrollment. Our findings were that:
- From 2005 to 2014, the five campuses of the UMass system have increased enrollment by almost 30 percent, with out-of-state enrollment almost doubling over that period.
- The UMass enrollment strategy is a cash flow shell game based on the higher tuitions that out-of-state students pay. Shell game because UMass has disconcertingly set out-of-state tuitions at levels that do not cover the full cost of educating the students.
- To accommodate this growth in out-of-state students and several other priorities, the UMass board of trustees and president's office have embarked on a capital plan that is decimating the system's finances. Over the past decade indebtedness across the five campuses has more than tripled, from under a billion to almost $3 billion. Debt payments have tripled, and now approach a quarter of a billion dollars annually. Meanwhile, the building spree has not focused sufficiently on maintaining the infrastructure the university system already has. The system's deferred maintenance backlog has grown from $2.7 billion to $3.3 billion.
These are precisely the issues that have put UMass Boston's finances in a tail-spin.
The campus management team just offered $20 million in current-year budget fixes, reducing the deficit to about $6 million. But as the newly appointed UMass Boston deputy chancellor and chief operating officer, Barry Mills, noted, this is a short-term fix and that "the systemic problem is somewhere in the range of $30 million."
UMass Boston's problems stem from the fact that the campus has grown its enrollment and expanded capital facilities at an historic rate over the past decade, despite projected declines in the number of Massachusetts high school graduates.
The likely financial impact was known as far back as 2011 when a UMass Boston financial task force forecast a $58.5 million shortfall by fiscal 2015 unless new sources of revenue could be identified to pay for additional expenses related to expanded enrollment and new facilities. The group also found "little data demonstrating the marginal [financial] gain from additional enrollments."
Here are the grim details. Over the past decade, the number of full-time equivalent students at UMass Boston has increased by 52.5 percent. To help finance this growth, the university tripled enrollment of out-of-state and international students, who pay higher tuition and fees than in-state students.
But that requires a different kind of infrastructure. As a result, UMass Boston is converting to a residential campus and adding facilities, including a $182 million integrated sciences complex; a $113 million academic building; a $600,000 venture development center; a $120 million, 1,000-bed residence hall; a $10 million pool facility; and a $45 million 1,200-space parking facility.
The campus has received approval from the UMass president to construct two additional new academic buildings for $135 million and $150 million respectively, a second $110 million residence hall, and a second parking garage for $42 million. The UMass 2017-2021 capital plan includes a total of $889.2 million for UMass Boston projects.
UMass Boston staffing has increased 29 percent over the last decade. More than a third of the new employees were faculty and nearly half were professional. The campus budget for employee salaries and fringe benefits grew by about two-thirds over the period.
Financing expansion has pushed UMass Boston's annual debt-service payments from $2 million in fiscal 2000 to $24 million in fiscal 2017. By 2021, those payments are projected to increase to $38 million. Its "operation and maintenance of plant" budget has risen from $19 million in fiscal 2007 to $31 million in 2016.
Given the lack of growth in private and federal government funding for R&D and the trustees' desire to ramp up R&D on university campuses, UMass-Boston has had to increase its self-funded research and development expenditures. To make up the deficit, UMass Boston campus has had to triple its own spending on R&D, to $23 million, over the past decade. Overall, the campus spent $20 million more for R&D that was not funded by outside sources in FY2016 than was the case a decade earlier.
Finally, as one of five campuses, UMass Boston must pay a proportional share of UMass' central office expenses, including those of the UMass president's office. Central office salaries and fringe benefits over the past decade have jumped over 55 percent. Moving the president's office to the new University of Massachusetts Center at Beacon Hill annually costs $3 million.
At the behest of the university's president and board of trustees, UMass Boston has increased enrollment and built a slew of new facilities without a sound plan for how to pay for it. Given the ballooning expenses caused by expansion, it's hardly appropriate to hold Keith Motley accountable for the campus' fiscal woes.
Jim Stergios is executive director of Pioneer Institute, a Boston-based think tank.