Lying with Statistics 101

A recent News-Gazette story included among other things a statistic that 75 percent of the University of Illinois budget goes to personnel. A recent newsletter from the CITES Executive Director carries this further, saying "Because about 80 percent of campus spending is on people, there has been an on-going emphasis in the budget process to identify ways in which all of us on campus can do our work most efficiently."

That got me thinking, how could we possibly spend 75-80% of a $4.17B budget on personnel. That works out to $3.13B on 25,325 FTE and 9,987 grad assistants or over $88k per person. That leaves only $1.04B for all other expenses including energy, office supplies, maintenance, infrastructure, new constructions, etc. So I pulled up the latest financial statement to find that the actual personnel cost to be $2.11B.

So why the discrepancy? Seems administrators think personnel costs should be reflected as a percentage of operating revenue ($2.85B) rather than operating expense ($4.04B), leaving out over $1B in non-operating revenue sources such as, oh say, state appropriations. As a percentage of expense, it's a more reasonable 52%. Ah, lying with statistics at it's finest.

So why lie? Because then they can make a pity case to lawmakers for more money. After all, they wouldn't want to cut funding at the cost of jobs for hardworking educators at an internationally-renowned flagship state university. It works with unions too - take a pay cut or at least no raise because money is so tight that we'd otherwise have to lay you off. And if layoffs actually happen, it's an easy justification to trim the 75% expense for a bigger bang because you can only squeeze so much from the remaining 25%.

What I can't figure out is why they'd think they could drop these statistics and get away with it. They do realize that the personnel costs they're referring to include those for professors of finance, accounting, and economics among others, don't they? Maybe the lawmakers and unions are too busy to fact check, but someone at some point has had to have pointed it out. I can't be the first.