🔒Ojakian: Balancing budgets amid state budget cuts

Balancing budgets amid state budget cuts

In general, revenues of the Connecticut State Colleges & Universities (CSCU) system(which includes four state universities, 12 community colleges and Charter Oak Sate College) are not keeping up with the cost of operating our system. The state’s current budget difficulties are beginning to have a significant, detrimental impact on all higher education institutions in Connecticut and across the country in the form of steadily declining funding needed to operate these colleges and universities. 

To put the funding trends in perspective, the CSCU system received virtually the same funding in 2015 as was allocated to our universities and community colleges in fiscal year 2007, and even less funding in 2016.  And yet, since 2007, the cost of administering the 17 colleges and universities has risen dramatically each year.  Rising costs, including utilities, information technology services, food services—all have increased in the intervening period.  And our biggest cost—employee salaries and benefits—has also increased substantially during that time. 

In fact, state-negotiated salaries for CSCU’s collective bargaining unit employees have risen at a rate of 5 percent for each of the last two years, based on the current contracts (negotiated in 2011), and the cost of fringe benefits over that time has increased at an even higher rate.

At the same time CSCU administrations have worked diligently since 2011 to implement the system consolidation enacted by the Connecticut General Assembly, and to generate the efficiencies and economies envisioned in the consolidation plan.  But these efforts, even though they have resulted in a net reduction in CSCU system office personnel due to the consolidation, has had an insignificant impact on the over $1 billion annual operating costs associated with administering the system as a whole. 

Further, with contractual and other constraints, cost reductions have typically only been achievable via attrition, which is a sub-optimal strategy.  Our challenge moving forward is to effectively balance our cost strategies while providing the best services possible to our students.

Enrollment challenges

At the same time that we have had to come to terms with the funding shortfalls described above, we also began to experience declines in enrollment at several of our community colleges.  

These declines are based on several factors, including:  the current high school graduation rates across the state—currently down 1.8 percent per year, a trend that is projected to continue for the next 8-10 years; the impact of unemployment on enrollment—fewer potential students seek retraining opportunities at community colleges or professional education at master-level programs when employment increases; and third, reduced availability of financial aid incentives for part-time students—reductions in financial aid have a particularly profound impact at our community colleges.

As a result, our projected tuition revenues during the last two academic years have fallen well short of our expectations.  Compounded by state funding that does not keep pace with rising costs and substantially higher operating costs, we have felt substantial upward pressure on student tuition and fees.  

The resulting “vicious circle” risks putting higher education, one of life’s greatest opportunities, out of reach of many of our students.

Achieving our mission in the current environment

Given the challenges outlined above, perhaps our greatest challenge this year will be to achieve the objectives that support the CSCU mission, which is to contribute to the creation of knowledge and the economic growth of the state by providing affordable, innovative, and rigorous programs.

The new CSCU leadership team is focused in a laser-like way on achieving these objectives, and on meeting the future demands of the state.  To do so, we are continuing to enhance all of our educational programs, including core liberal arts and sciences that will challenge our students and expand their horizons (for learning and for life); workforce-based programs that will prepare our students for careers with Connecticut’s businesses; and developing new programs that will stimulate economic growth for all of our citizens.

At the same time, we are actively reviewing financial-aid incentives to support low-income students; offering dual-credit programs to high school students in a number of career pathways so students can finish associate degrees sooner; and offering workforce programs in partnership with business and industry to help meet their needs going forward. 

Will CSCU ask labor unions for additional concessions in 2016 to help address its budget difficulties?

In June of 2016, all of the collective bargaining unit contracts for the community colleges and the universities will expire.  In preparation, we have begun meeting with union leadership to discuss terms for the subsequent agreements.  The current contracts have been in place since 2011 and, while it is common knowledge that the state’s economy has been depressed throughout this period, the last two years have been especially difficult for CSCU, as we experienced unprecedented budget pressure.  As indicated above, we expect to see the same (if not greater) pressure during the next few years.  So it is a critical time for all of us—faculty, administrators and staff.

The one thing that all of us appear to agree upon, however, is that we must do everything in our power to mitigate the impact of these budget difficulties on our students, and on the overall student experience at our institutions.  Success in achieving our collective mission depends on our ability to do so.  This will not be easy, however, nor can we expect to do so with simple, one dimensional or unilateral sacrifice.  Success will only be achieved with mutual sacrifice, and by good faith collaborations throughout the negotiating process.

With this in mind, it would be imprudent to suggest what steps or actions might be necessary for us to take in the coming months.  We have a legislative session ahead of us (even though it is a short session), so we are not in a position today to speculate what might be necessary as the academic year wears on.    However, we have a limited number of options available to us and, to ensure that we do everything we can to mitigate the impacts of the current situation on our students, we will not do anything at this point to limit our options.

[See what others are saying on HBJ's Economic Forecast 2016 page]

Read more

Ojakian tries to rebuild CSCU system trust, finances

Klonoski leads higher ed through disruptive change