AU's Zero-Based Budgeting is a Race to the Bottom


Recently, Athabasca University put forward the long-discredited notion of "zero-based budgeting" (ZBB) as a means of supposedly increasing the university’s budgeting "efficiency" and hence “improving its sustainability”.  The zombie idea of zero-based budgeting was also resurrected a few years ago by the anti-education provincial Conservative government. 


ZBB was first implemented in private industry in 1969 by manager Peter Pyhrr at Texas Instruments, a Dallas-based war contractor. In 1973, former U.S. President Jimmy Carter, then governor of Georgia, contracted Pyhrr to implement a ZBB system for Georgia’s budget process. President Carter later required the adoption of ZBB by the U.S. federal government during the late 1970s, resulting in major cuts to U.S. social programs (while war spending was increased).


In pure form, zero-based budgeting means institutional departments get their budgets stripped back to zero every year, and then have to justify every penny they ask for. This, of course, is impossible. A complete zero-based review of all program elements during one budget period would not be feasible. What actually happens is that agreement is reached that the starting point for the new budget will be anywhere from 50 to 90 per cent of last year's request.


Starting below the previous year's budget request reduces investments in institutional programs from the get-go.  The ultimate goal of ZBB is to find the minimum level of funding necessary to keep programs barely alive.  A basic requirement is that managers prepare their budgets to run their operations at the "lowest possible level." This resonates with the institutional aim to pay the workers at the lowest possible level, again, under the hoax of enhancing “sustainability”.


Here it should be made clear that workers add value when they work; they are not a cost to society or to anyone.  How can workers who produce all the goods and services be considered a cost to the value they produce within the economy? Without workers working no value is produced. Social wealth does not fall from the skies or grow on trees; it comes from work. While working, workers reproduce their own value, which adds value to the economy.


Clearly ZBB totally undermines the human-centered idea that funding must be increased each year in order that institutions such as AU provide students with the highest possible standard of education within the existing conditions. The NDP government acknowledged this need for funding increases by raising the operating grants to Alberta post-secondary institutions by 2% in March 2016, after the anti-education Tories had slashed those same grants by 7% in March 2013.


The result of ZBB at AU will be completely opposite to what AU and the society requires.  Educational programs require constantly increased funding, not cuts.  Increasing funding will raise the quality of educational programs, consistent with the development of society, while ZBB will trigger a disastrous race to the bottom.  Increased program funding rather than cuts is the only way that AU and other PSE’s will be able to meet the ever-increasing needs of students and the society for higher and higher levels of education.

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