II. The 2000/2001 Turning Point
In the years 2000/2001, a number of developments converged and threw Tel Aviv University and the whole of Israel's university system into a crisis. The acute crisis of the years 2002-2004 has been essentially resolved, but its marks are still apparent in a system which emerged from the crisis wounded, its budget reduced by 20%. Only at the end of 2006 did the Olmert government appoint the Shochat Commission to deal with the structural damage and to seek ways for restoring higher education to the level of 2000, as well as to provide for future growth. The commission is presently at work but faces opposition from student unions (who object to raising the tuition) and faculty unions (who fear changes in the current mode of employment).
The following six developments converged in 2000/2001:
- The national security crisis in Israel precipitated by the outbreak of the second intifada in September 2000. Among other by-products, it exacerbated the economic and budgetary crisis of the time. As part of a drive to reduce government expenditure, the treasury's budget department imposed a harsh cut on the higher education budget. The size and effects of this cut were magnified by a loss of confidence by the budget department in the leadership of the PBC (Planning and Budgeting Committee) of the Council of Higher Education and by the lack of support, not to say hostility, of Minister of Education Limor Livnat. Rather than fight for the higher education budget, she transferred NIS 50 million from the higher education budget to that of the Ministry of Education.
- The collapse of the delicate balance and pattern of work between the Ministry of Finance, the Ministry of Education, the Council for Higher Education and the PBC. This system was put in place in 1977 and its effectiveness was largely responsible for the achievements of Israeli science and higher education for more than two decades. The collapse of the delicate balance had a devastating effect. The discontinuation of the long-term agreements between the PBC and the Ministry of Finance in 2002 was one of the overt signs of this collapse.
- The decision by the Winograd Commission in 2000, under the pressure of Ehud Barak's government (notwithstanding protests by Minister of Finance Shochat) to reduce university tuition by 50% over several years. It was promised to the universities and colleges that the government would compensate them for the loss of revenue, but the Ministry of Finance made it quite clear that it couldn't and wouldn't allocate money for both compensation and growth.
- The manner in which the public college system was built and budgeted in the latter half of the 1990s and early 2000s. I stress the term "manner" because I do see the expansion of access to higher education and the creation of a second echelon in Israeli higher education as major positive developments. However, while in theory the system of public colleges was built on the assumption that their students would be budgeted at 75% in comparison to students at the research universities (and this was expected to decrease to 60%), the actual allocation was much higher. This, in addition to the fact that growth in undergraduate students was channeled by the PBC to the colleges, dealt yet another blow to the universities' budgets as illustrated in the following table:
Undergraduate Students 1994/1995 1999/2000 2004/2005 Universities - Total 62,888 66,951 69,910 Colleges - Total 3,201 15,334 43,055 Universities' Share 95% 81% 62%
- The appearance on the scene of new players: private colleges and local extensions of foreign universities. I wish to emphasize that I view the emergence of a "private sector" in Israeli higher education as a positive development (as long as "private" is really private). But be that as it may, one could not ignore the repercussions of this development for the university system. To cite one example: The availability of thousands of places for undergraduate students in new law and business schools (albeit at higher tuition) has had a negative impact on faculties of humanities in research universities.
- Meddling by the political system in the management of Israel's university system in spite of Article 15 in the law regulating higher education. Article 15 is intended to protect the universities' academic freedom. In this context, I would note several attempts to dictate admission policies to the universities and the (temporary) politicization of the position of director-general of the PBC.
The harshest outcome of these developments was a total annual loss of more than NIS 1.1 billion in the universities' budget. The budgetary axe was brandished again and again, landing each year on the universities and making coping with the deficit akin to climbing a steep, slippery slope.
The extent and pace of the budget cuts are shown in the following table:
Year 2001 2002 2003 2004 2005 2006 2007 Total for 2001-2007 Nominal Cuts (NIS Millions) 160 220 215 253 60 167 43 1,118 The budget cuts were curbed slightly due to an increase in the number of budgeted students, which benefited only the colleges, and through recovery plans (which began in 2003/2004 and reached NIS 307 million by 2006/2007) that were intended to support early retirement and the ongoing increase in the costs of budgeted pensions at all of the universities. The regular budget (including the increase in college student enrollment and excluding recovery plans) was cut by 16% in current costs (from NIS 5.9 billion in 2000/2001 to NIS 5.0 billion in 2006/2007). Taking into account the real costs of higher education calls for a further adjustment of 10%; in other words, in real terms, the cut was greater than 24%.
TAU suffered a difficult double blow:
- Direct cuts in and loss of revenue.
- Termination of incremental growth and additional budgeting which came to be taken for granted in the 1990s.
As mentioned above, the operational deficit in the 1999/2000 budget was covered by an NIS 20 million special allocation by the PBC and by a "light" cut of NIS 20 million. The 2000/2001 budget was, it emerged later, already in the red, and in the 2001/2002 budget, the operational deficit leaped to NIS 170 million. The deficit was balanced by a series of ad hoc measures but it was clear that in the absence of a series of drastic measures, it could easily grow to more than NIS 250 million.
