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COVID-19 has cost the University of Alaska $15 million so far, on top of budget cuts

The University of Alaska for years has been hamstrung by state funding cuts and now, due to the coronavirus pandemic, it is losing millions of dollars more.

UA has lost nearly $15 million to date due to the pandemic, and that loss will likely double by the end of this fiscal year, according to its new interim president, Pat Pitney, who spoke with reporters Tuesday.

Next year, the university system faces another $20 million in cuts after already losing $50 million in funding in accordance with a compact it made with Gov. Mike Dunleavy, which reduces the university’s state funding by $70 million over three years.

Still, in the face of tremendous fiscal challenges, Pitney said she aims to help steer Alaska’s university system toward stability and rebuild the trust of its communities.

“The university needs stability to help invest in the people, so we, as a state, can go forward,” Pitney said.

The UA Board of Regents named Pitney interim president in July after former president Jim Johnsen resigned. Pitney previously served as director of the Legislative Finance Division.

She had worked in positions at the university for 23 years, including as the vice chancellor of administration at University of Alaska Fairbanks. Pitney left UA for a position as state budget director under former Gov. Bill Walker.

Pitney said she’s invested a large part of her life in the university, but did not expect or want to be its president.

“Looking at the issues that they were facing, and looking at how important this is to the future, and at the network and the tools that I have, I thought it was it was important for me to step up and serve,” she said.

Pitney said that the university system will be critical to Alaska’s economic recovery from the pandemic, which has caused the loss of tens of thousands of jobs in the state.

Those jobs will trickle back, Pitney said, but many of the same jobs may not return. The university needs to be poised to train the workforce as the state’s needs change, she said.

Still, how the university will be able to support the state’s economy has been complicated by years of budget reductions.

UA has been experiencing a “double whammy" of budget cuts, Pitney said, because for seven out of the last eight years, it has had year-over-year funding reductions. By the compact’s end, it will have lost more than $120 million in funding — a 30% reduction in its general fund base, Pitney said.

The funding drop has also driven the university system’s dependence on tuition, she said.

Still, enrollment this year has not declined as much as administrators predicted, Pitney said. It dropped by about 8%, far less than the predicted 15% to 30%, she said.

PItney said that she believes the success of the university depends on the strength of its instructional, research and service programs.

“My attention will be on maintaining the highest-quality programs as we can,” she said. She will examine how the university’s administration can “operate in a lean and efficient manner" to better support those programs, she said.

She will also try to create more understanding throughout Alaska of the value of the university’s programs, she said.

Pitney said she is not considering such a merger.

“One of the things that drives enrollment is certainty, and because we are heavily dependent on tuition revenue, we need to create certainty for the entire system,” Pitney said.

She said that there has been an environment at the university that has felt “threatening” to many people, and Pitney said she will work to involve more people in finding solutions. Some additional programs will have to be scaled down, she said, but there are many places in the institution that need to be preserved.

"I want to create trust and competence, " Pitney said. “That’s how our universities will succeed is with the trust of the communities — that our programs are here and here to stay."

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