“University Budgets Are Moral Documents”
By 
A couple of historians muse on the university budgeting process and how no matter what the administrators do, the goal is to eviscerate the humanities, which is the reason university systems originally existed in the first place.
They key here is this concept of “responsibility centered management” (RCM – also known as “Incentive-Based Budgeting” or IBB), where units are charged with bringing in their own money to operate (UChicago moved to a slightly modified version of this budget model in 2018). But this budget model didn’t just happen – it’s not even really that old! – and it’s not the only way of doing things. There’s a history here.
Kevin McClure has written a bit about the widespread adoption of RCM for the AAUP. The idea originates, as many bad things do, with an idea out of Harvard. Supposedly, since the 19th century, their budget principle has been “Every Tub on its Own Bottom.” As explained by Harvard Magazine, “In Harvard parlance, a tub is a high-level institutional unit… Each tub is expected to be self-financing: to prepare its own budgets, raise its own funds, and keep itself solvent.” This idea was then spread to UPenn in the mid 1970s by Jon Strauss, an electrical engineer who was hired as a Professor of Computer Sciences at UPenn and then suddenly promoted (for… reasons?) to the VP Budget and Finance. Strauss was then hired away to the University of Southern California in 1981, brought this new budget model with him, and teamed up with John R Curry to spread the good word.
From there, like missionaries, they helped colonize universities across the country – between them working at UCLA, CalTech, MIT, WPI, Harvey Mudd, and Texas Tech, and then countless others through their work in consulting.
The problems with RCM/ IBB are many but we’ll focus on 2. First, briefly, as McClure emphasizes in his AAUP piece, there’s been almost no empirical study of whether or not this budget model actually works. One of the few that has been done – from 2006 – showed VERY mixed results, even just in regards to economic “efficiency.”
The second issue, but the more important one that relates to Ando’s piece above, is that RCM/ IBB has been a soft coup that steals power at the university away from the faculty.
As my university moves to this budgeting model, which it has done a very poor job explaining other than saying that everything will be fine for Arts & Sciences, which no one actually believes, I found all of this pretty interesting. I don’t really have the knowledge about either the history of universities or the intricate detailed knowledge of university budgeting processes to really evaluate the claims, but I did think it would be worthy to discuss university budgeting procedures at the very least.