There is something to be said about the values of counter-cyclical fiscal spending, even on the collegiate level. One thing is sure though: you can count on not hearing any of these arguments coming from our current ASSU government.
Last week the Undergraduate Senate approved over $70,000 in funding for two Spring Quarter concerts: the annually held BlackFest and a Stanford Concert Executive Committee (SCEC) initiative at Frost Auditorium.
The funds will come from a little-known Special Fees reserve fund that currently holds approximately $350,000 in student money. For the past decade or so, Stanford Student Enterprises (SSE), the business branch of the ASSU, has been collecting a 10% surcharge from students for each Special Fee budget approved during the Spring election. The 10% tax is meant to cover up to a 10% refund rate for any given group before dipping into the group’s actual operational budget. At the end of the year, any left over resources are rolled over into this buffer fund.
The reason why this fund is so unfamiliar to ASSU Senators – and why it should remain so – is painfully apparent today. Clearly, this money is burning a hole in the Senate’s pocket. The discovery of the money has brought with it an urge to spend it…to the tune of $70,000 in one quarter, or essentially 20% of the entire fund for two events.
The importance of reserves, and particularly of this reserve fund, seems to have eluded our elected officials. For years, SSE has been diligently growing the buffer fund as a fail-safe measure against budgetary shortfalls and gross fiscal mismanagement. And while $350,000 seems like a large sum of cash, given that the ASSU runs an annual budget of about $2.5 million every year, it actually isn’t.
For instance, when I took office in Spring of 2009, I realized that the previous Appropriations Committee has overspent the budget by close to $200,000 (all of which had to be drawn from the very same reserve fund). Later that year, as the economic downturn took its toll on student budgets and outside funding sources, the refund rate skyrocketed well above the 10% SSE had initially planned. By Winter Quarter of my term, we were seeing refund rates as high as 20% for a substantial amount of groups. Again, tens of thousands of dollars had to be drawn from the buffer fund to compensate.
Right now, times are good. The economy (albeit slowly) is on the upswing, Stanford’s endowment is on its way back to health, and refund rates are back at historical rates. The ASSU financial system isn’t facing the same pressure that it was back in 2008 and 2009. However, all it takes is one incompetent Senate (more common than you think) or one financial crisis to turn everything around. And if that happens, the student body is going to need every cent of those $350,000 to make sure the ASSU lives to fight another day.
BlackFest and the SCEC initiative are put on by groups that already receive Special Fees funding. These types of events have happened year in and year out – organized by groups using their creativity and resourcefulness to raise the necessary capital to accomplish their goals. It isn’t right that these groups be able to access such significant funds (and believe me, $70k in student money is significant) without the entire student body signing off on it. If the NAACP and SCN want to spend over $30k on an event each year, let them put it in their Special Fees budget so that the students can democratically decide upon it. This process appears even more egregious in light of the implication that students would be charged an additional entrance fee to attend these concerts. How many times can you tax a student for the same event? By my count, this makes three.
Once again, the lack of institutional memory has impacted the ASSU in a non-trivial way. Come Spring Quarter, the Undergraduate Senate will have done itself and the student body a disservice: dramatically drawing down on an important pool of emergency money by lavishly spending on two non-sanctioned events.