State universities are once again having to comb their budgets and looking for ways to slash millions to close shortfalls by early June.
Universities are facing an unappetizing buffet of budget-trimming choices after years of budget cuts have left some with what they say are bare-bones operations. On the table this year are tuition increases, cuts to merit-based aid, higher fees to out-of-state students, reductions in paid time off and the possible elimination of programs that have low enrollments.
The size of the budget hole differs for each of the state’s 11 universities. The state’s three largest universities are facing budget gaps that range from about $9 million all the way up to $40 million.
The Legislature approved a budget last week that gives $3.48 billion to state universities, a 4 percent drop from this year’s budget. The state budget also assumes universities will raise their tuition the full 15 percent, so if a university chooses not to, it would face a larger cut. The amount each university receives from the state varies. The university system largely dodged deep cuts last year when lawmakers wrote this year’s fiscal year budget.
Though Gov. Rick Scott has yet to approve the budget for the year that starts July 1, he isn’t likely to make line-item vetoes that would substantially impact each university’s allocation from the state. Universities now have until June, when most of their governing boards meet to approve budgets and finalize plans for tuition increases, to plan out their budgets.
University presidents say their goal is to try to close their budget gaps while still delivering high-quality education. That can be tougher than it sounds. At Florida State University, for instance, recent hiring freezes and the loss of 129 faculty members have led to higher student-faculty ratios, a common measure of higher education quality.
“We have to preserve the quality of education we’re offering,” said Florida State University President Eric Barron at a sober budget meeting on Monday in which he laid out all the options for closing the university’s budget hole.
FSU is facing a drop of $19.3 million from the state, on top of about $85 million in cuts since 2007. (Its total budget hole nears $40 million when prior-year deficits and other costs are included.)
The University of Florida cut its budget by about $150 million over the last three years, with another $33 million in cuts expected next fiscal year. The University of South Florida is facing a $9 million budget hole.
Officials at several state university system schools said their main concern is retaining and recruiting top faculty. With changes to the Florida Retirement System that require employees to contribute 3 percent of their salaries toward their retirement for the first time, university officials say they are worried about losing faculty.
“We need to preserve the net salaries of faculty and staff,” Barron said. “Everybody here knows we have been collectively, as a community, really worried to the degree our salaries are slipping over our peers.”
As a result, FSU and other state universities are vowing to increase employee salaries by at least the equivalent amount – 3 percent – which expands their budget shortfalls because it’s an additional expenditure.
The 24 percent drop in state funds to the university system over the last four years has hurt the ability of Florida universities to provide salary increases that keep up with inflation, never mind keep them competitive with other schools, said Ed Mitchell, the head of the United Faculty of Florida, a union for university and college faculty.
“The ability to attract faculty from out of Florida has been hampered,” Mitchell said. “Not every state has cut higher education spending even though all of the states have been in this recession together.”
Mark Walsh, a lobbyist for the University of South Florida, said a tuition increase would largely offset the school’s budget shortfall. But salary reductions coming from the changes to the Florida Retirement System are “something we’re concerned about.”
“For employees at a lower end of the pay scale like groundskeepers and people making under $30,000, an across-the-board percentage cut has a disproportionately larger impact on them,” Walsh said. “The other concern is faculty salaries.” Compared to peer institutions, Walsh said, the salaries at USF are lower.
At the University of Florida, President Bernie Machen issued a letter to faculty and staff on Tuesday that said the university will receive $54 million less from the state than it did last year. That figure includes a reduction in financial aid funding by $9 million and loss of federal stimulus dollars. The net budget shortfall is $33 million.
“We have no plans to end programs or lay off employees,” Machen wrote.
Instead, the university is examining ways to close the budget gap by increasing revenue through more online classes and a push to enroll more out-of-state students who pay higher tuition, as well as consolidating some administrative services, such as human resources and finance, across the university.
At Florida State University on Monday, Barron offered choices that included taking $1 million from the school’s athletic boosters association and funneling more merit-based financial aid toward need-based awards, which could free up dollars for other programs. FSU also is mulling department mergers, which could result in cuts to administrative positions but would save faculty jobs, Barron said.
Barron said he wanted to avoid wholesale cuts to departments or across-the-board cuts which impact morale. Florida State University received heavy criticism two years ago when it proposed cutting tenure positions and entire academic programs. “I don’t see politically covering the 3 percent and simultaneously knocking out an academic program,” Barron said. “I think we would become the poster child all over again. And I’m not intending to become the poster child of anything other than making the university a better place.”
One of the options all universities are mulling over is increasing tuition by the most allowed under law – 15 percent. The state chose to raise tuition by 8 percent, which gives universities the leeway to raise by another 7 percent to meet the maximum of 15 percent. The Board of Governors formally approves tuition increases.
The University of Florida and Florida State University include 15 percent tuition increases in their preliminary budget plans. The University of South Florida is also considering asking for the full 15 percent tuition increase.
Meanwhile, the state chose to cut the popular merit award program Bright Futures by 20 percent, the largest cut since the program’s inception, as well as cut other aid programs that go to private schools.
Even without budget troubles, universities have pushed to be able to set higher tuition rates in order to bring the cost of attending a Florida university closer to the national average.
Still, many university officials fret over the potential for more cuts coming next year. Lawmakers left changes to state health insurance programs alone this year, but there are plenty of hints that next year the program may be changed in a way that requires more contributions from employees next year.
And there is always the worry the state will cut funding to state universities and financial aid again.
“If there are cuts next year I don’t believe we will manage it without lopping off something significant,” Barron said.
By Lilly Rickwell
