The stock market has been rising. Tiffany's reportedly had a banner Christmas season. But for many of the nation's publicly supported universities, the financial future looks bleak. Fiscal year 2004 saw total state higher education funding fall by 2.1%, the first overall decline in more than a decade, according to an annual survey by Illinois State University's Center for the Study of Education Policy.

In some major university systems, the center reports, declines have been under way for several years now. Between 2002 and 2004, state higher education funding fell by 3.5% in Washington state, 6.5% in Wisconsin, 7.9% in Michigan, 20.4% in Virginia, and 23% in Massachusetts. In California, with the nation's largest higher education budget and most celebrated budget shortfall, state spending on colleges and universities fell from nearly $9.5 billion in fiscal 2002 to just over $8.6 billion in 2004, and Governor Schwarzenegger's 2005 budget proposes another large drop. The University of California system, home to an estimated 10% of the nation's postdocs, would receive 8% less. Student fees would climb dramatically and undergraduate admissions there and at the state's other public universities would fall.

Postdoc Pay on the Block

At first glance, postdocs may seem untouched by these changes, but a closer look shows that state funding levels can affect them, too. Some postdocs, such as those at the University of North Carolina's Bowles Center for Alcohol Research, are paid wholly or partially with state money--in this case, from a trust fund supported by drunk driving fines. And many postdocs paid from federal funds or other sources come under policies that apply to all employees at their universities.

The University of Georgia and Georgia State University have already seen 2 years of frozen salaries. "This means that I haven't gotten the standard 3% cost of living increase twice now," says postdoc Peter Krug of Georgia State. "Add in the low postdoc salaries here ... and I'm struggling a bit with a family and all. While I do have a pretty good benefits package, unless my situation changes soon, I will probably have to find new employment."

"Cost of living adjustments? Nobody's getting those," says Shawn Hayes, chair of the statewide University of California Council of Postdoctoral Scholars and a postdoc at UC Davis. There's also "discussion" of "the possibility of a 10% across-the-board salary cut for everybody, including faculty," if further large budget cuts are necessary. Reduced paychecks have "the potential to cause problems," Hayes believes. "If postdoc salaries are put on the chopping block, ... I think that postdocs will become very angry. They're underpaid, severely underpaid, as it is." Any substantial salary reduction would mean "hardship for many," especially postdoc parents. Should conditions continue to deteriorate, "postdocs have every right to form a union," he said.

Health Benefits Threatened

Hayes also suspects that tight finances at least partially account for the UC system's failure to implement the uniform health insurance for all postdocs initially scheduled to go into effect on 1 January 2004. Now expected to debut by January 2005, the plan was delayed not by budgetary restraints but by the complexity of designing and rolling out a single program for 5000 individuals on 10 diverse campuses, according to Ellen Switkes, assistant vice president for academic advancement in the Office of the President of the University of California. The original start date, for example, fell in the middle of the enrollment year and could have required some postdocs making the switch to pay for two deductibles within a single year, Switkes said. The plan is now out for bid, with specific costs and provisions yet to be determined.

Hayes, however, thinks that beyond bureaucratic complications, "they're having trouble finding the money to pay for it." At Davis, health coverage for a family with children currently costs $870 a month. Because Hayes is covered by the existing employee plan, "I don't pay it, the university's paying it," he said. But for fellowship postdocs without that coverage, "is the university going to kick in the balance?" he wonders. "Somebody has to come up with this extra money."

Benefits are under pressure elsewhere as well. A 7% budget cut at the University of North Carolina has forced employees, including postdocs, to shell out a $20 co-pay for prescriptions that used to be free. "Increased health insurance premium costs" are "one outcome" of the $250 million in state funds cut from the University of Wisconsin's budget between fiscal years 2003 and 2005, says postdoc Robyn Perrin. Postdocs and other university employees "now have to pay $62.50 per month for family coverage and $25 per month for single coverage; in the past, as long as you chose certain HMOs, you didn't have to pay towards the premium."

Crumbling Support Structure

And beyond the pinch on postdocs' personal finances, "the infrastructure that supports postdocs" could suffer as administrators seek places to cut, predicts Amber Budden, president of the Berkeley Postdoctoral Association. Some changes are "small things" that, in Perrin's words, "make it incrementally more difficult to get things done." Many seminars and symposia at the University of North Carolina no longer include long-customary complimentary pizzas or sandwiches.

At the University of Wisconsin, the library has dropped some online and hard-copy subscriptions, including, alas, Science's Next Wave. Many lab purchases there have also become "more complex" because "new blanket order accounts" for departmental purchases are no longer allowed, Perrin adds. "Many departments [have] to use credit cards for purchasing, which has its own inherent set of problems." With cuts in central administrative staff, the paperwork has "shifted ... to the departments, [which] of course don't have any more staff to deal with the increased burden."

Other university services important to postdocs are also at risk. One state-university postdoc reports delays in getting papers published because of the department's inability to hire a qualified computer person under new budgetary restrictions. Some university postdoc offices also appear threatened. "Postdoc affairs are often a part of a job description" of a staffer in a graduate student office, Budden notes. But because "grad students pay fees" and postdocs don't, she suspects that, in a competition for scarce funds, "there might be a shift in the ratio" of time spent on postdocs versus grad students. "If budget cuts come to graduate studies" offices, Hayes agrees, "I can certainly see postdocs getting the short end of the stick."

Even more ominous, Budden and others see a threat to many postdocs' ultimate "potential of having an academic position." Drops in both undergraduate admissions and funds available for faculty pay are beginning to reduce the number of faculty slots that colleges and universities can fill. "Filter[ing] down from the squeeze on university positions," Budden believes, could be a decline in the number of people even choosing to be postdocs.

How state funding cuts play out will vary from state to state, university to university, and perhaps even lab to lab. Some postdocs will see no changes. For others, fallout may be severe. For his part, Hayes believes that "for the UC system, the budget crisis is a two-year glitch, three at the most. Beyond that, things will go back to normal." But only time can test the validity of such optimism. In the immediate future, the forecast on many campuses is for falling budgets and even tighter money.

Beryl Lieff Benderly writes from Washington, D.C.