GOP Logic: UW spending money is bad, but saving is worse

“It’s not how much you make. It’s how much you save.”

This was the edict my great-grandfather passed down to my
father and the one my father gave to me. Dad recalled the story at least once a
month when I was living at home. Each time, he told it, I listened as if I had never heard it before, mainly because the story was so honest and truthful.

As a young man, he had just gone to visit great-grandpa after
being paid for some summer work.

“I was telling him how much I made and how great it was and
how I could buy whatever and he stopped me. He asked, ‘Did you put any of that
away for later?’ When I told him no, he shook his head. ‘It’s not how much you make. It’s how much
you save.'”

The man knew something about austerity. He raised four
children through the heart of the Great Depression. He had a tiny plot of land
in the backyard where vegetables grew throughout the spring, summer and fall.
He would turn the earth over by hand and every time something was picked from
the garden, something else was immediately planted to take its place.

His plum tree yielded a bounty that was served as fruit,
preserves and plum wine. He dried his own garlic in the rafters of the garage.

When he walked to church, he would pick mushrooms along
the way and store them in a paper sack he brought with him. By lunchtime,
great-grandma had turned his find into mushroom soup.

Money was squirreled away
in various parts of the house: a jar of quarters here, several rolls of pennies
there. He had a wallet hidden away that spare money went into for emergencies.
When his son, my grandfather, died, he called my father over to the house and
asked how much the funeral cost. When my father told him, he disappeared into
the bedroom and emerged with the wallet, from which he paid for the funeral
costs in cash.

“If you had all the money I saved and spent from this
wallet, you’d never have to work a day in your life,” he told Dad.

He realized quite early that life didn’t owe you anything,
so you better make do with what you have and always be aware that it could be
taken away from you in a big damned hurry.

In popular parlance, my great-grandfather and my father
would be thought of as a wise, forward-thinking man. If his principles were to
be applied to the University of Wisconsin System, he would be making Mike Ellis
puke in his Cheerios.

The senate president and fellow legislators took their turns
screaming at the university system this week, as an audit revealed the UW folks
kept cash reserves on hand.

The figure for these reserves ranges from almost $1 billion
to $200 million, depending on if you want to stir outrage or if you want to
control damages.
In recent days, Republicans have centered their focus on the
figure of $648 million, which is the $1 billion, minus gifts and grants that
have been restricted to specific projects. The system argues that all but $200
million of that money is committed and the rest is spread among its 26
campuses.

If you want a good math lesson on this one, PoliFact did a
nice job here.

The general public is up in arms, obviously, because they’re
being told that the UW is essentially bleeding them dry and then making a giant
pile of money for System President Kevin Reilly to sleep in at night. For his
part, Reilly has completely sucked at trying to explain this in a way that
anyone who isn’t in academia, or who doesn’t look like a character out of
“Deadwood,” wouldn’t understand.

Here are a couple things that might make this easier for
people who responded in the same way Robin Vos did: “If you have $450 million
in your piggy bank, I can’t see why you need another nickel.”

The concept of savings and commitments:The legislators
(Republicans mainly, Democrats lamely joining the party) have been screaming
about how much money the U has, focusing on the $648 million. More than
two-thirds of that money is committed, meaning there are things on the books
that require it goes somewhere at some point in the future.

Even though Reilly should have done a much better job of explaining what that
means, the lawmakers should also be smart enough to figure out how this works.
It’s how all of us buy and own things that go beyond what we can afford on a
month-to-month basis.

For example, I get paid my monthly salary on the first of the month. If you
looked in my “piggy bank” at that point, you’d probably think, “Damn! Nice!
Let’s go have some fun!” OK, but most of that money is committed. About
one-fourth of that goes to my mortgage. I have to pay that, since I lacked a
six-figure chunk of cash to purchase the home outright. Thus, the bank gave me
money and each month, I have to pay back some of it. I also owe about 5 percent
of that on my car, which was purchased in much the same way. I owe my kid’s
school money and my insurance company as well. That’s committed. So, I’m still
doing OK. However, there are expected commitments as well. I know that I’ll owe
for water, power, natural gas and so forth. Regardless of how little I use, I
know I’ll owe something and based on experience, I know about how much I’ll
need. Thus, that takes out another chunk of money.

What’s left goes to food and various other things. These are all variable, but
it’s uncommitted money. If we really wanted to save a lot of cash in a given
month, we could eat nothing but Ramen. However, we will still have a food cost.

The state’s logic would be: “Hey, you saved up all that
money we gave you! Obviously you don’t need it! Gimme!”

Obviously, not exactly what “savers” would hope to hear.

Fund diversity: Let’s say for the sake of argument that we go with the $648
million number and get really ticked off. OK, fine, but WHERE exactly is that
money? If it’s all sitting in Reilly’s garage and he goes in there every night,
cackling like Scrooge McDuck… well… yeah, that’s a reason to be upset.
However, it’s not sitting in some giant central location, just waiting for
someone to open up the vault.

The university system is comprised of 26 campuses that each receives a chunk of
money. Each of those universities has a number of colleges and schools that
receive a chunk of that chunk. Each college and school has a series of
departments that receives a chunk of that chunk. Each department has a series
of groups, organizations and commitments that are funded out of that.

Each of these areas squirrels away what ever it can each year, with the
understanding that this might be all they have for a while (see more of this in
Area 3). The carry-over effect means that they’re saving money instead of
spending it all. Thus, you have hundreds and maybe thousands of departments,
colleges, schools, groups, organizations and more that are responsible for
their own little flake of gold.

What the audit revealed, in the most basic way, is that when you take whatever
the system has in its coffers at The Home Office and you add it to all of those
little scrapings, you get a giant figure. This, of course, is enough money to get irate about but on a practical level,
not enough to really do anything with.

Some universities, organizations and systems I have seen do
something called a “zeroing” each year, which would solve this problem and lead
to others. They are funded each year with X dollars and expected to make do. If
they spend it all, it’s gone. If they don’t spend it all, it disappears at the
end of the year. If they spend into debt, they get some nominal punishment and
their negative balance goes away. This leads to end-of-the-year weirdness like,
“Quick, buy 10 of those dinosaur-bone iPhones! Our budget resets tomorrow and we’re
going to lose the money otherwise!”


The “bipolar boss” effect:
Let’s say you work for a guy who is a decent guy
who pays you a decent wage that you can live on and you kind of have gotten
used to that. You also know that you’re valued and that the guy has no intention or need to fire you.

You know each week, you’ll be paid X dollars and you know where
that money is going. You have managed to put aside a little, but it’s not the
“3-months salary” rule you’re supposed to follow. Chances are, you probably
don’t worry all that much about all of that.

Now, instead, let’s say you work for a guy who makes Gary Busey look like a
Buddhist monk on Xanax. For seemingly no reason, he tells you, “You need to pay
more for your health insurance starting next month.” Or “I’m going to furlough
you for two-weeks this year so I can save money.” Or “I know I said I was going
to give you more money and more responsibility, but I’m thinking now that I’m
not.” From year to year, you’re never sure what your salary is going to be or
what is going to piss off this guy at any point in time. He doesn’t really see the
value in you or the work you do and would pay you less or fire you if he could.
He also set it up so that you and your coworkers can’t join together to
complain about this stuff.

Exactly how stable do you feel in this situation? Would it be unreasonable to
feel the need to store cash? To squeeze your pennies until Lincoln’s beard
popped off? To fight for additional help each step of the way?

Each year over the last five years, the state has dropped some fun new variable
into the equation to freak out the university (and many other state workers).
One year it was furloughs, another year it was health premiums skyrocketing and
another year it was Act 10. Even now, with his “magnanimous gesture” of giving
the U $181 million in “taxpayer money,” Gov. Scott Walker is still making out.
He cut more than $315 million from the system budget a few years back to
balance the budget.

If all you know is that what you have in your hands right at this minute might
be all you get, chances are, you’re going to hold on for dear life. You’re
stockpiling cash like a squirrel saving nuts for the winter. You’re hanging on
to everything you can while you can.

When it came to people in my family, I saw this all my life. My
great-grandfather and his garden.My grandmother and her penny jars.My parents
and their envelopes.
When you aren’t sure, you make sure.

Instead, this concept is abhorred at the university level, mainly because it
can be.When Walker himself set up a “rainy day fund,” he was applauded for
being prudent.
Now, it’s an affront to humanity.
Maybe my great-grandfather was wrong. It isn’t what you make or what you save.

It’s what you can justify.

One thought on “GOP Logic: UW spending money is bad, but saving is worse

  1. Snarki, child of Loki says:

    Modern “Conservatives” aren’t actually *conservative*.
    You know, cautious, prudent, saving for a rainy day, all that virtuous stuff.
    They’re right-wing radicals. They need to be stripped of the “conservative” label.

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