Once the Jamaican government receives back in taxes, from the operations of UWI, the entire sum of its contribution to the university, any additional revenues calculated to have been received by the state beyond the level of its subvention, should be returned to the institution, proposes Professor Hubert Devonish.
Devonish, a professor of linguistics and coordinator for the Jamaican Language Unit at UWI, says the tax rebates should be pumped into upgrading facilities, subsidizing tuition fees for students in need and paying competitive salaries to the institution’s academic staff, who he argues are being paid 30 per cent less than their international counterparts.
It is a move that will generate more income for the country and stimulate economic development, says the professor in a study he conducted with the support of a team of economic consultants.
“This is a proposal which cost the Jamaican tax payer zero and yet provides a model by which UWI can expand, be internationally competitive and contribute even more substantially to the economy of Jamaica,” Devonish tells the Jamaica Observer.
“The government of Jamaica (GOJ) would be able to have its cake and eat it, an internationally competitive university, making substantial contributions to the economy, at no net cost to the tax payer.”
The paper’s argument is based on its “key finding” that, by the 2010 to 2011 financial year, the Jamaican government was no longer a net contributor to the UWI Mona Campus, based on estimates of tax revenues and statutory deductions arising from the operations of the institution. It runs contrary to the view that the university is a drain on the public purse amid a shift in government policy towards early childhood education.
“Even though the institution itself is exempt from taxation, this is not true for more than its 3,000 employees, its 15,000 plus students and its numerous suppliers of goods and services,” says Devonish.
He supports his argument by highlighting that the employees of the university, as well as the employees of those who provide it with goods and services, pay income taxes and statutory salary deductions.
“In addition, these employees as well as students pay GCT on consumer goods and services they purchase with the money they have earned or saved,” says Devonish.
The paper details how the government’s net contribution to the UWI Mona Campus has eroded over the past three academic years. This occurred against the background of reducing government subventions to UWI, even though expenses jumped by almost 10 per cent over the period, and increasing state revenues arising from the operations of the institution.
In Academic Year 2008/9, the government’s subvention to UWI was $5.43 billion – against expenditure by UWI of $9.88 billion – while it collected an estimated $3.58 billion in taxes and statutory deductions, which meant that the net GOJ contribution was just $1.85 billion, the study outlines.
In 2009/10, the GOJ subvention fell to $5.01 billion – against an expenditure of $10.05 – while the estimated tax take was $3.74 billion, resulting in the net GOJ contribution being $1.27B, a fall relative to the previous year.
The GOJ gave a net zero contribution to UWI Mona in the last complete academic year, 2010/11, states the paper. The state further reduced its subvention to $4 billion – as UWI expenditure rose to $10.80 – while the estimated tax intake was also $4 billion, according to the study.
“The pattern as seen over the three year period shows that the GOJ was reducing the level of its subvention to UWI even while the expenditures of the institution were continuing to rise,” says Devonish.
“To support these increases in spending, UWI increased the share of its income coming from other sources. These included tuition fees from students from other contributing territories, subventions from the other contributing territories to UWI, full economic cost fees from students from non-contributing countries, and income generating activities,” he explains.
Given this development, the professor is asking for a change in the way the funding of UWI Mona is discussed from here onwards, with the view that the institution is a worthy business investment and higher education internationally is a global business.
“UWI is a generator of wealth for Jamaica, not just in the long term, but in the here and now,” he declares.
Using the UWI Mona accounts for 2010/11, Devonish estimates that US$33.03 million was earned in foreign exchange by the Mona Campus. This came from fees paid by non-Jamaican students, subventions from governments of other contributing territories, full fees paid by students from non-contributing territories, living expenses for the 1,500 non-Jamaicans attending the Mona Campus and donations and grants from overseas sources, he reported.
“To give this figure some perspective, this sum is in excess of the foreign exchange earned by the combined export of bananas, citrus, coffee, cocoa and pimento in 2011, at US$24.5M or more than half of that earned by the export of sugar in that same year, at US$62.01,” says the professor.
What’s more is that UWI is also a major source of employment, with over 3,000 persons directly employed at all skill levels, but with a bias towards the higher end of the educational scale, the study reveals.
“This number represents about three quarters of the number of people employed to the entire mining sector in Jamaica. There are, as well, many hundreds more indirectly employed as a result of the existence of the UWI at Mona in Jamaica,” Devonish states.
The professor says that the recent student protests over the non-payment of fees tell us that there is a significant number of students who cannot afford even the 20 per cent of fees they are required to pay, given the over $300,000 in living expenses they have to finance annually.
“In addition, in order to provide world class education, UWI has to attempt to pay its staff internationally competitive salaries if it is to maintain quality – both the providers of educational services and the recipients of these services are in pain,” he says, adding that the actual plant of the university has to be maintained and upgraded if it is to maintain and improve its status as an institution of international repute.
“The GOJ subvention, given its small size, cannot satisfy these needs in any serious way,” Devonish argues. “The business of UWI is therefore in serious need of more financial resources. The question is one of where these resources would come from?”