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The Politics of Money-Grubbing: U of M Prez Shows How It’s Done

A2P Notes: The amounts in parentheses are the salaries paid to the individuals. The salaries for the U of M employees come from the University’s 2009 salary spreadsheets, available to the public. Keep in mind that thanks to double-digit raises awarded to top administrators in 2010, the salaries used in this entry are, in fact, higher. To put numbers in perspective, during 2009 94 Deans and Associate Deans at the University of Michigan were paid collective salaries of $17.856 million dollars plus an additional $6 million dollars for benefits, according to data from the U.S. Bureau of Labor Statistics. This means each dean received an average compensation package of $254,542 in 2009.

Click here to download the salary spreadsheets from 2002-2009.

It might seem unkind to write about U of M President Dr. Mary Sue Coleman ($553,500, plus housing) on the heels of the RichRod ($2.5 million) debacle. However, what university president doesn’t expect to take a public shellacking when the head football coach cries in public, loses to the University of Toledo, and brings down the wrath of the NCAA on his program? Coleman had to serve salty snacks, sit next to Rodriguez, smile and listen while the NCAA officials imposed the first sanctions ever on U of M’s football program. It must have been torture. What woman, after all, wants to have to entertain the football coach and the Press on her day off?

One man Coleman would trade her mortar and cowell to sit next to again is that other Rich. The one who goes by the name RickSnyd (or Snydly Ricklash, as public sector employees in the state have taken to referring to Michigan’s new governor). In a January 10, 2011  post to AnnArbor.com reporter David Jesse ($39,000 plus all the pencils he can eat) writes (tip o’ the keyboard to David Jesse) that the University of Michigan is preparing  for “shared sacrifice.” The stone altar, knives and ceremonial head-dresses are ready, prepared by Provost Teresa Sullivan ($336,331). All that was missing was the sacrificial offering. RichRod, evidently, having already left town was off the “shared sacrifice” menu. Sullivan turned to Douglas Strong ($546,363.50), CEO of the U of M Hospital System, for advice on whom she should select. Strong chose the second most highly paid LEO Intermittent Lecturer at the University of Michigan’s Gerald R. Ford School of Public Policy, John Hieftje ($96,969.70).

Using notes prepared for her by Robert Dolan ($435,102), Dean of the of the Ross School of Business, Dr. Coleman spoke slowly and used smallish words so AnnArbor.com’s mostly out county readership would understand exactly that she was saying, but not what she was implying.

Last year, the University of Michigan received a $300 million dollar allotment from the State of Michigan. Coleman, ever the savvy huckster, told Jesse that,

“We want to be good partners with the state.” Coleman went on to “point out the Ann Arbor campus gets about 21 percent of its general fund budget from the state. She said that’s among the lowest percentages of all Michigan universities.”

Just 21 percent? Dang. That’s cold. When first informed of the piddling state allotment, Dr. Coleman had to be rushed to the U of M hospital (private room, river view, fluffy slippers) where she was revived by Dr. James O. Wolliscroft ($494,000), Dean of the U of M Medical School.

A2P readers might remember Dr. Wolliscroft as being an enthusiastic supporter of the proposed conference center that politicos want the Valiant Group to build downtown. His two sentence letter in support of the Valiant Group’s project reads as though he’d composed it, naked, sitting under a bright bulb, with John Hieftje, City Administrator Roger Fraser and the Valiant Group partners looking on, impatiently.

Erik Lundberg ($578,800), the U.’s Chief Investment Officer, explained to Dr. Coleman that Michigan’s state allotment is among the lowest percentages of all Michigan universities because, well, Michigan has one of the largest total budgets, tipping the scales at over $4 billion dollars. The University of Michigan’s General Fund, which underwrites the cost of instruction, takes in almost $1 billion in tuition and fees annually, in addition to money from the state. The University’s mission is, of course, education, and so the institution spends close to $1 billion on instruction annually.

Tuition and fees, then, come close to covering the costs associated with the support of the various schools and colleges. However, University officials spend about $250 million dollars on business operations and general administration. To translate: Dr. Coleman needs 1/4 of a billion dollars just to pay the men (and couple of women) who run the institution.

Coleman went on to say that, “We’re hoping for the best, but we understand the dire situation the state is in. We are preparing for shared sacrifice. (We’re taking) a hard look at our operations.”

Timothy Slottow ($472,106), the University’s CFO, was perhaps the official who initially recommended double-digit raises for top administrators as a first step in taking a “hard look” at the University’s operations. Administrators at the institution enjoyed double-digit salary increases because last year, in a public relations gambit, salaries of top paid administrators were “frozen.”

David Jesse, ever the gentleman, didn’t bring up the double-digit raises while writing up Coleman’s dirge about “shared sacrifice” and “looking hard” at her operations. If Dr. Coleman is looking at anything, it is clearly straight at her Ann Arbor SPARK Board buddy Rick Snyder and hoping that the University of Michigan can score an even bigger piece of the state funding pie.

Over the past seven years, officials at the University of Michigan have only been able to trim a paltry 3.9 percent from a $4 billion dollar budget ($156,000,000). Over the past 20 years, the cost of tuition at the university has increased exponentially. The final year I attended graduate school, tuition per semester at the Horace H. Rackham School of Graduate Studies was $900. In 2010, in state tuition was $8,892 per semester. In 1990, a gallon of milk cost $2.28 and a dozen eggs cost $1.00. The median price of a home was $149,000. Today, the average cost of a new home is $232,000, a gallon of milk costs $3.45 and a dozen eggs cost $1.37. Tuition, then, had it risen at the same rate of inflation between 1990 and 2010, should be $1,800 per semester at most.

In a piece published in The Chronicle of Higher Education, one discovers that higher education ranks among the top ten lobbies that spend on federal elections. American higher education is a billion dollar industry populated by egghead administrators lighting their corner offices with $1,000 bills, then spending hundreds of millions on lobbyists in state capitols and in Washington, DC to beg, borrow and wheedle more and more out of American taxpayers. The result? Fewer and fewer students are graduating within the traditional four-year cycle of undergraduate study.

According to information from the American Enterprise Institute for Public Policy, in 2008 alone Americans frittered away almost $500 million dollars in tuition and fees at colleges and universities that graduated between zero and 33 percent of enrolled students. “While American high schools graduate about three-fourths of their students in four years, American colleges graduate only about half of their students in six,” writes Mark Schneider in “The Costs of Failure Factories in American Higher Education.”

These are all at once frightening, sobering and maddening statistics. Is the answer to shut off the hydrant of public money and force colleges and universities to live within more reasonable means? How would such a move impact students? College officials have shown little self-restraint in raising the cost of tuition and fees. In various states, including Michigan, state legislators have, at times, held up allocations until college officials have agreed to only modest hikes in tuition costs (i.e. less than double-digit hikes). Perhaps the answer is to change the U.S. tax code so that the entire higher education industry is subject to income taxes, along with the for profit education sector. Why shouldn’t the University of Michigan pay income taxes on the tens of millions it earns yearly from, say, patents and royalties?

It’s abundantly clear that the people who head our state’s multi-billion dollar non-profit University of Michigan have grown accustomed to defining “sacrifice” as only giving the Vice Provost who pulls down $500,000 a 12 percent raise.

While Dr. Coleman was ever-so-earnestly bullshitting David Jesse, she added this:

Both Coleman and faculty leaders said they would like to see more collaboration between professors and industry, including having industries come to the university with specific problems to work on.

Is she serious?

The same women and men who land multi-million dollar grants to study how regular people in our country pinch pennies, have no idea how to squeeze the eagle until he grins, as Bessie Smith sang in the 1929 hit “Nobody Knows You When You’re Down And Out.” The same faculty and administrators who rake in six- and seven-figure salaries to teach our state’s best and brightest how to manage complex budgets, haven’t reigned in spending and contained costs within their own institution.

As of late, I’ve read essays in which the authors argue that state and federal funding for higher education in the United States should be decreased. The idea sounds crazy, until you look at budgets from institutions such as the University of Michigan, read reports to Regents that pass off 3.9 percent budget cuts as something to write home to mother about.

I’ll leave you with some pseudo-wise words from Dr. Coleman. She told David Jesse that, “We need to also be more explicit with what we’re trying to accomplish. It’s the end result that matters.”

Translation:

Dear Rick,

Send money.

Hugs, kisses & if you’re a very generous boy, ‘studies’ to prove the MEDC’s economic “programs” are actually creating jobs,

Mary Sue C., BA, MA, Ph.D., LLC, PLPD, AARP (pending)

 

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Short URL: http://www.a2politico.com/?p=5316

11 Comments for “The Politics of Money-Grubbing: U of M Prez Shows How It’s Done”

  1. There is no question that these are egregious and objectionable conflicts of interest even if no specific law is violated. It is all very fishy to me.

    The Hieftje lecturer appointment is lacking any sort of credibility. It does not pass the “giggle test”.

    With his educational credentials he would have a difficult time getting credentialed as an elementary school substutute teacher let alone educating students at University of Michigan; he likely would have a hard time getting into one of his own classes as a student.

    If Hizzoner perhaps taught an Earl Keim basic training real estate seminar, I could see that, but certainly not as a college lecturer, and certainly not at such a premiere institution like U-M.

    I would like to know what John’s wife does at U-M to merit the $63,000.00 per annum that umsalary.info reports.

    I have no beef with Marcia Higgins getting an administrative assistant job at U-M – as long as she abstains from voting on matters relating to the University of Michigan, who has leases and service agreements with the City of Ann Arbor. Marcia Higgins’ job experience has been as an administrative assistant with various employers so her U-M employment appears to be consistent with her personal qualifications.

    The hiring of Judge Timothy Connors in 2008 as a adjunct professor at the U-M Law School seems rather interesting. The umsalary.info search engine shows six-figure compensation in 2008, but as Brandon, above, pointed out, the actual pay may be far less depending on the actual terms of the appointment. What is interesting is that the University of Michigan is a party on a regular basis to all kinds of lawsuits in the Washtenaw County Circuit Court where Connors sits. These cases may include medical malpractice actions, Freedom of Information Act enforcement proceedings, employment law filings etc. Judge Connors has, in the past, presided over a number of high-profile cases involving U-M, including the Tess Karwoski medical malpractice case against University of Michigan Hospital that resulted in a jury verdict against U-M Hospital and a subsequent settlement as well as an action by a labor union under the FOIA legislation to get access to phone and address information of U-M employees. Connors ruled in favor of the University in that FOIA proceeding and that decision was appealed all the way up to the state supreme court.

    Do those maize-and-blue paychecks issued by the U-M Payroll Department have the power to influence ever so slightly the judgments of elected officials who have decision-making authority over matters affecting the University of Michigan? What is the motivation of University officials in offering employment opportunities to such elected officials or their respective family members?

    These are questions that need answering. Pronto!

  2. I agree, Rster.

    Marcia Higgins used to work for Ardesta, the venture capital group headed by Rick Snyder before he
    became governor. She later worked for Borders. In both positions she had the title of “administrative assistant”. She also once ran against John Hieftje as a GOP nominee for mayor but could not get 25% of the vote. John Hieftje later invited her and Steve Rapundalo into the Democratic Party. I have never seen any evidence of Higgins having a college degree, although Steve Rapundalo holds a doctorate and has worked for Pfizer.

    John Hieftje was a real estate salesman who got his undergrad EMU degree only a few years ago. He used to live in a dinky house in the First Ward, but has since moved to a large home in Burns Park.

    Hieftje’s spouse, Kathryn Goodson, is an “accompanist” in the School of Music.

    There was quite a stir a few years back when Joan Lowenstein, a media attorney, represented a developer in a family law case in circuit court when that developer has business before City Council. Nobody seemed to notice that Leigh Greden became the biggest pro-development member of City Council when his law firm, Miller Canfield, not only represented McKinley Associates, who had a major ongoing development project in Ann Arbor, but one of the partners in Miller Canfield served as chairman of the board of McKinley Associates. McKinley’s president, a GOP heavy hitter, also donated to Greden’s 2006 State House run.

    I also believe that Butzel Long, the law firm that Christopher Taylor works for, may have done some recent work as bond counsel for the City of Ann Arbor.

    These are the type of items that some good investigative reporter needs to dig into.

  3. This is incredible. I was vaguely aware that there appeared to be some conflicts of interest but this is pretty unreal. I guess our local officials really have no shame (like our Supreme Court judges). It’s not really gray here – it’s pretty clear and pretty outrageous.

    The Ann Arbor News really enjoyed beating up on AA Schools superintendents but decided to stop any investigative reporting there.

  4. @Kerry D., the appointment of Marcia Higgins was particularly interesting. She was hired by U of M very shortly after being pink-slipped by Border’s.

  5. @Brandon, Hieftje has an undergraduate degree from EMU. He was hired, and paid one of the highest per course rates out of the entire cadre of 1,600 lecturers on the AA campus. He is academically unqualified to teach at the School of Public Policy. His wife was hired, as well, after her husband was elected.

  6. No, it is not Dave.

    Put other names of Ann Arbor elected officials and you see some other interesting stuff.

    Marcia Higgins earns over 42,000.00 per year in the School of Engineering in an administrative position she took a little over one year ago.

    The fact the Washtenaw County Circuit Court hears cases involving U-M apparently did not deter Judge Timothy Connors from that court from taking paid employment with U-M in 2008.

  7. Hieftje has a .33 appointment, so you have to take the full time salary of $97,000 and multiply it by .33. So his real salary is about $32,500.

  8. Look at umsalary.info and you see maintenance workers earning over 100,000 per year.

    Look at John Hieftje and wife Kathryn Goodson who have together pulled in over $150,000 per year as faculty members while John has decision-making power over matters involving U-M and the City of Ann Arbor.

    Is this right?

  9. A2P,

    I’m really appalled at the grotesque increases in costs at public institutions like UofM over the last 30 years. I admit, it’s hard to feel sorry for the children of wealthy Doctors, Lawyers and CEO’s paying $30K/year in tuition and another $20K/year in room and board except for every case like that, there are several kids in places like Detroit, Flint and Saginaw who are really suffering as result of Mary Sue’s “excellent” leadership. Costs go up because the demand is inelastic, not due to the intrinsic underlying costs of providing instruction. The best laugh though is when Mary Sue tries to claim that the U loses money on undergrads. I get the impression that Hieftje and Fraiser learned their Byzantine accounting techniques from the U. Check out the 150 plus students in a Chem 101 undergrad class add up all the tuition paid for that one class from all the students, compare that number to the salary of the LEO lecturer teaching the course and tell me the U is losing money on undergrads! But of course, after you get done applying the accounting methods both the city and U use, you can sit there with a straight face and claim you’re losing money.

  10. @Alan, no fair being more clever and funny than the blogger. LOLOL.

  11. Back in the day, when someone was making the kinds of dollars our Mayor is, for what he’s done for the University, there would be a piano player in the parlor while the ‘job’ took place upstairs.

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