Tuition hike likely amidst budget cuts

The long awaited passage of the state's biennium budget came on July 17 as Gov. Ted Strickland signed the document into law. The final version of the budget involves $7.8 million in cuts to the academic enterprise and introduces a $1 million tax on UT's hospital.

Because of the cuts, a new university budget will be drafted and proposed to the UT Board of Trustees for approval.

The $50.5 billion budget features a $6.2 million reduction in the state share of instruction funding, a $4.5 million decrease in support for Ohio College Opportunity Grants and a decline of $816,315 in subsidies associated with restricted line items. These line items included the state Jobs Challenge, International Business, College Readiness, Urban University and Research Challenge programs.

The Health Science Campus will endure cuts of $221,731 to clinical teaching lines, $46,522 to family practice, $23,103 to primary care and $7,854 to geriatric medicine.

The state budget will allow for universities and community colleges to raise undergraduate tuition up to 3.5 percent this academic year, following three years of mandated frozen tuition. Previous House and State budgets didn't allow for a tuition increase this year, but would have allowed universities to increase it next academic year by as much as 3.5 percent.

Though they were barred from raising undergraduate tuition rates, UT administrators increased graduate tuition rates, housing rates, lab fees, student parking fees, meal plan fees and some upper-division program fees in the current UT budget.

Senior Vice President for Finance and Administration Scott Scarborough said this increased financial burden on students was met, in return, with increased UT funding for need-based financial aid.

The cuts to OCOG may hinder this effort, though. According to Vice President for External Affairs Larry Burns, some of the typically low-income students receiving the state grants will be getting $1,000 a semester, down from $2,500. Others who received $750 a semester, however, will then get more this year. An increase in federal Pell Grant money will help close this gap for some students, but not every student receives Pell Grants, Burns said.

Scarborough said approximately 3,000 students will be affected by these changes.

"The Financial Aid Office is going to work with each of those students," he said. "More than likely, [the lost funds] will convert from a grant to maybe an additional loan amount."

Scarborough said the cuts to grants won't affect any student's ability to attend the university, but the amount of debt each student carries will be affected.

UT will maintain its promise to the estimated 342 students qualifying to participate in the UT Guarantee program, he said. The $1,500 reduction in OCOG funding for those students not covered by other external or university scholarships will be picked up by UT in its impending budget, roughly to the tune of $100,000 a semester. **

The process of fixing the UT budget before the Aug. 24 meeting of the BOT Finance Committee will proceed in much the same way the last budgeting process did, which eliminated $16 million in annual UT spending, Scarborough said.

"There will be conversations with the provosts, deans and vice presidents trying to identify non-revenue producing programs, revenue producing programs that don't cover direct expenses and nonessential support services," Scarborough said.

The conversations start Wednesday and will continue through Aug. 5.

"Not everything that is going to be put on that list is going to be eliminated," he said. "But the thought is you have to start there to ask the question, ‘Is it essential; is it strategic, is it mission-critical?'"

In addition to elimination, programs may be simply reduced or restructured.

Aside from looking at programs, administrators will be approaching the various unions which received contractually negotiated salary raises and ask them to consider forfeiting them, Scarborough said. According to estimates from last semester, this would free up approximately $6 million annually. Administrators may also consider stopping the previously approved salary raises for those non-union personnel making under $40,000. Personnel making more than that didn't receive a raise.

If the budget shortfall is not satisfied after exploring these contingencies, administrators will judge whether to reduce the number of full-time equivalent employees or raise undergraduate tuition.

"All university positions are on the table [for termination] at this point," Scarborough said.

According to a UT News article published today entitled "CFO outlines budget amendment process," Scarborough said, "At UT, we will likely raise tuition this fall, but scholarship every dollar back to students. Beginning in the spring, however, we will not scholarship the tuition increase back to students." *

"Ultimately, the outcome that we would like to achieve is that nobody gets a salary increase for this fiscal year," he said. "If we were to do that ... we would just about take care of our whole problem. That combined with the likelihood of a 3.5 [percent] undergraduate tuition increase, those two issues alone would solve the problem."

Other cost-cutting measures discussed at the Finance and Strategy Committee included hiring more student employees, reducing paper and other resource usage, instituting a four — day work week and furloughs.

Efforts at revenue enhancement were also discussed, including growing UT's distance learning capabilities and increasing the number of continuing education courses, which offer adult students the ability to learn new skills.

When asked about using the currently budgeted $4.4 million excess in operating funds — which is treated as an institutional reserve — to cover half of the cuts, Scarborough said, "The assumption is that the board will want to maintain the same level of cash flow positive position that we had in the initial budget."