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January 19, 2010
Senator John Valentine Representative Mel Brown Co Chairs Higher Education Appropriations Subcommittee Dear Chairs Valentine and Brown: As Chair Valentine requested at the conclusion of the subcommittee meeting on Tuesday, January 12, on behalf of the Board of Regents and the nine colleges and universities, I am submitting our recommendations for your consideration. We recognize that the subcommittee, and indeed the entire Legislature, face some very difficult choices, and appreciate the attention given to our higher education institutions at your first meeting. As was articulated very directly by president after president last Tuesday, as well as students, we are already experiencing serious consequences from the budget cuts imposed so far—a net nine percent, or over $70 million. These cuts have been imposed at a time when enrollments have increased by 17 percent over the past two years. As Senator Valentine pointed out, this year’s higher education enrollment growth—at more than 12,000 new students in the fall—actually exceeds public education (K-12) enrollment growth. University and college presidents outlined for the committee the consequences of the cuts taken so far, such as: Elimination of over 900 employee positions, including faculty A “soft cap” or the limiting of class availability to students due to classes being full Increase in student/advisor ratios Reductions in salaries and benefits Delay of infrastructure repairs/upgrades including building closures An undermining of the dynamic, productive research enterprise that has been created in the state More serious consequences will be realized if cuts beyond what the Governor has ordered for the current year are imposed, let alone if the base budget cut of an additional eight percent is
implemented and an additional five percent cut on top of that. This would add up to a 22 percent cut in state funding from what was appropriated in 2008. It could also trigger federal sanctions as part of “ARRA” by reducing the state’s “effort” below the FY 2006 level. While we recognize the Legislature is just beginning its budget process, and much will depend on revenue estimates in February, it is important to point out the gap between the legislative starting point and what has been recommended by Governor Herbert. This gap totals $93 million less for the Utah System of Higher Education (the state’s nine credit-granting institutions). When UEN, UCAT and MEC are included, the gap between the Legislature’s and the Governor’s recommendations amounts to over $99 million. To put this in perspective, this $93 million difference for USHE between the Governor and the Legislative starting point exceeds by $10 million the total combined state base budgets of four institutions (Dixie State College, Southern Utah University, Snow College, and College of Eastern Utah) serving 20,000 students. It is important to focus on the impacts of this enormous difference in approach. If cuts of this magnitude go through, it is very likely that the Board of Regents will have to declare a financial emergency (“financial exigency”) for one or more institutions, damaging our state’s reputation for its commitment to education which has its own set of long-term consequences. We appreciate the opportunity you gave us last Tuesday to spell out the consequences of further cuts on our institutions and the students they serve if additional cuts are made on top of the historic cuts we have already implemented in Fiscal Year 2009-2010. While every effort has been made to minimize the impact on students, as one president pointed out Tuesday, with most of institutional budgets focused on instruction—where else can cuts be made? Consequences of further cuts include: Access to higher education by students statewide will be limited as a result of: o Institutions at capacity will have no choice but to begin limiting the number of students who can enroll by imposing “hard” enrollment caps. o All institutions will further eliminate numerous class sections, prolonging students’ time in college as they have difficulty obtaining classes they need to graduate. Prolonging time to graduation delays students’ full entry into the workforce as taxpayers and lessens their ability to provide for their families. o Elimination of academic programs ranging from CTE to baccalaureate to graduate degree programs
o Larger numbers of students for every academic advisor; without good advice students are less likely to make the best choices in course offerings which can also delay their time to graduation. o Closure of satellite campuses Negative economic consequences for the state: o Short-term—elimination of approximately 600-700 full-time positions— mostly through involuntary lay-offs. o Longer-term and longer lasting-- reducing the number of students trained and educated for the workforce by Utah’s public colleges and universities through soft and hard enrollment caps. o Short and long-term: undermining the capacity of our research universities, resulting in negative economic impacts for the state as adequate support for research is lost, reducing competitiveness for research grants which provide thousands of high-paying jobs and the ability to develop technologies that spin-off into new businesses, etc.
The four percent cut for the Board of Regents line items would mean needing to cut all of the programs that are passed through to institutions. Of the $906,500 targeted, nearly half ($437,600) is for student financial aid and scholarships, including the New Century and Regents’ Scholarship that legislative leadership requested be fully funded in the current year with a promise of a supplemental appropriation to cover the shortfall. In most cases these monies, whether scholarships or for technology or to assist libraries or the hearing impaired, have already been disbursed to institutions and would be difficult to recall in order to meet the cut. In essence, it would be an additional cut to institutions. There has been some suggestion that budget cuts might be made up through tuition increases. While, undoubtedly, there will be some tuition increases, we are committed to keeping tuition as low as possible. As you heard from students who testified last Tuesday, tuition increases undoubtedly also affect access to higher education. We hear and understand that many legislators are reluctant to raise taxes or even user-fees during these economic times; it is important to realize that significant tuition increases are like a large tax increase to students and their families. Recommendations We respectfully recommend the following:
1. That the Subcommittee takes a strong stand for higher education by expressing its opposition to any further higher education cuts (beyond the Governor’s already imposed additional 3-percent one-time cut in personnel budgets for the current year). Even going to a four percent cut mid-year, with students already in classrooms and teachers already teaching, is extremely difficult to do on top of the nine percent cut already imposed. Taking this stand would send a strong message to your colleagues and to the people of Utah of the value you place in higher education. 2. Recognizing that you have instructions from Executive Appropriations to provide options for cuts, we recommend that you express while you do not favor further cuts, if cuts must be made, they should be administered proportionately across all institutions (see attached charts). And realizing that much of the Board of Regents pass through is for student financial aid or scholarships, and that generally pass through monies have already been disbursed to institutions, that these cuts should be eliminated or minimized. 3. If further cuts are made, presidents should continue to be given flexibility to make the cuts as best fits their institution’s unique circumstance and that they once again be given temporary authority to transfer funds across line items. Presidents have certainly demonstrated this past year their capacity to make cuts strategically, prudently, and in the best interest of students and their institutions. While flexibility does not eliminate the negative consequences of cuts, it is very helpful to presidents in best utilizing state resources. 4. Finally, we appreciate the invitation to provide a list of “unfunded mandates.” This is attached. We request you support the Legislature suspending or repealing these mandates in order to help alleviate somewhat the current financial challenges of the institutions. Thank you for your interest in and support of higher education, and the opportunity to provide recommendations. As always, we stand ready to provide you with any additional information to assist you in your deliberations. Sincerely,
William A. Sederburg Commissioner of Higher Education
Attachment One Proportionate Cuts at 4% for FY 2009 and 5% for 2010
University of Utah Utah State University Weber State University Southern Utah University Utah Valley University Snow College Dixie State College College of Eastern Utah Salt Lake Community College State Board of Regents USHE Total
FY 2010 Base $221,481,900 $135,184,500 $60,141,800 $28,864,600 $56,985,500 $19,031,200 $19,868,700 $15,281,800 $60,678,200 $23,092,200 $640,610,400
FY 2010 4% Cut $8,859,300 $5,407,400 $2,405,700 $1,154,600 $2,279,400 $761,200 $794,700 $611,300 $2,427,100 $906,500 $25,607,200
FY 2011 5%* Cut $11,074,100 $6,759,200 $3,007,100 $1,443,200 $2,849,300 $951,600 $993,400 $764,100 $3,033,900 $1,154,600 $32,030,500
FY 2010 Base Less Cuts $210,407,800 $128,425,300 $57,134,700 $27,421,400 $54,136,200 $18,079,600 $18,875,300 $14,517,700 $57,644,300 $21,937,600 $608,579,900
*Cut is in addition to 17% base budget cut from 2008-09 appropriation
Several unfunded mandates have been identified by the campuses that require institutional resources to complete. The mandates require the time and effort of campus staff that could otherwise be utilized to promote the educational effort of the institutions, particularly as staffing resources are stretched as a result of budget cuts. Since only in rare cases are individual staff members assigned solely to these projects, it is difficult to quantify the costs with certainty. However, from surveying our institutions, the following unfunded mandates were most often mentioned as the most burdensome: Transparency reporting Employee background checks Verification of student legal status (Senate Bill 81, 2008)
The elimination or postponement of the state requirements to comply with these mandates would allow the institutions to reclaim the time employees spend on these issues and utilize their existing budgets to contribute to the challenges associated with budget cuts and increased enrollments.
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