University budget grows after state cuts funding

Daniel Moore

Increases in enrollment, careful spending and strategic investments allowed Kent State’s operating budget to grow more than six percent from last fiscal year, despite a cut in state funding of more than $13.4 million.

Gregg Floyd, senior vice president for finance and administration, said he places the emphasis on record enrollment figures.

“You have a sizable amount of resources that got away at the state level,” Floyd said. “Fortunately, the numbers of students we’ve been able to bring to the campus has substantially helped fill that gap, and, had that not been the case, we would have looked at reductions of services and employment cutbacks.”

President Lester Lefton said the university was able to weather the cut in funding not only through increases in enrollment but also conservative spending.

“We were able to withstand (the cut in state funding) because of the careful fiscal management and restraint on the part of the deans and the division heads in the previous year and a half so, when this budget cut came, they wouldn’t be left short,” Lefton said.

Higher enrollment, more money

Of Kent State’s $574 million budget, more than $356 million is revenue from tuition and fees assessed to students, a $41.7 million, or 13.3 percent, increase from last year. Floyd said the larger-than-expected revenues from tuition and fees were driven by enrollment rather than tuition increases.

On the Kent campus, for example, of the $27.9 million total increase in tuition and fees: increases in enrollment generated $17.4 million, the 3.5 percent tuition increase brought in $7.7 million, and student fees another $2.8 million.

“Those (tuition-driven) revenues are product, in part, of tuition increase but, to much larger part, this growth in enrollment we’ve had,” Floyd said.

Kent State’s regional campuses experienced similarly uneven revenues, collecting $11.8 million more from tuition and fees while losing only $2.7 million in state aid. Floyd said, once again, enrollment numbers were by far the greatest factor in allowing the regional campus budget to grow 8.6 percent.

“They’ve been growing like gangbusters,” Floyd said. “There’s a lot of emphasis that the state has placed on local education opportunities, and the regional campuses have tended to be a high priority within the Board of Regents. Typically, in a downtown economy, people tend to go back to school.”

Other university budgets:

University of Cincinnati

Total Budget: 1.053 billion (3.3% decrease)

Tuition and Fees: $372.2 million (5.8% increase)

State funding: $28.2 million (13.5% decrease)

Scholarships and Fellowships: $56.3 million (5.8% decrease)

Ohio University**

**Ohio University Associate Provost for Academic Budget and Planning John Day said he is currently still in the process of finalizing budget numbers

Total Budget: 685.6 million (5.1% increase)

Tuition and Fees: $334.0 million (12.0% increase)

State funding: $144.7 million (6.1% decrease)

Scholarships and Fellowships: $25.4 million (11.1% increase)

Kent State

Total Budget: $578.7 million (6.3% increase)

Tuition and Fees: $356.2 million (13.3% increase)

State funding: $123.6 million (9.8% decrease)

Scholarships and Fellowships: $28.9 (7.7% increase)

Bowling Green

Total Budget: $285.7 million (0.7% increase)

Tuition and Fees: $202 million (6.6% increase)

State funding: $70.0 million (13.6% decrease)

Scholarships and Fellowships: $27.3 million (1.3% increase)

Youngstown State

Total Budget: 158.7 million (0.1% decrease)

Tuition and Fees: $105.8 million (5.8% increase)

State funding: $39.8 million (15.2% decrease)

Scholarships and Fellowships: $4.7 million (6.7% increase)

Prioritizing investments

Floyd said the university needed every bit of the surplus revenue from tuition and fees to continue to satisfy students and to improve campus.

Historically, a separate capital bill from the state supports some of the needed facility renovations. With the absence of a capital bill for the second consecutive fiscal year, Floyd said, President Lefton has taken the initiative to provide spending out of his office to replace some of those funds.

“The new way of looking at things, essentially, is that the president’s office is the primary funder of any of the projects that are going to occur across the campus on a major facility change or renovation,” Floyd said.

The president’s office funds grew 27.7 percent from last year to $10.4 million, which President Lefton said reflects his recent funding of improvement projects like Bowman and Satterfield halls’ renovations and the library’s Fab Fourth, the University Library’s redesigned fourth floor.

“The president’s office, you could say, is the entire university,” Lefton said. “There have been no changes in the structure or function of the president’s office.”

Floyd said an independent consultant two years ago estimated the university has $354 million in deferred maintenance, the price Kent State would have to pay only to bring the buildings back to their original, constructed state. The cost of improving them into state-of-the-art, 21st century facilities, he said, is exponentially larger.

“It’s millions and millions more,” he said. “We haven’t gotten the exact amount because, frankly, we’re so far away from having what we need. These are not minor things we look at. These are huge.”

Floyd said Lefton has the task of prioritizing most of the university’s capital resources. The priorities the president normally favors, he said, are “strategic investments.”

“Those priorities tend to be around the investments in terms of the future, so we have a strong and sustainable enrollment, and the second is to address and fix the things that have been neglected for a long time,” Floyd said. “Clearly, the investment side is something you have to put on the top burner.”

Such strategies have included funding for the TV marketing campaign, additional student recruiters and more scholarships and fundraising, he said, all of which have proven to be worthy investments.

“Enrollment that we have enjoyed has been essentially successful because of the investments that’ve been made in order to grow that enrollment,” Floyd said.

The regional campuses’ need for greater revenue from tuition and fees can also be explained, said Denise Zelko, the associate vice president for budget and financial analysis.

“There are more post-secondary students going to the regional campuses, and we have to provide them tuition and books, but we don’t receive full reimbursement for that,” Zelko said.

Dual credit programs like the Post Secondary Enrollment Option Program (PSEOP) and Seniors to Sophomores are partially funded mandates, she said. The 27.2 percent increase in scholarships and fellowships expenditures on regional campuses, she said, reflects Kent State’s requirement to foot the bill for the programs.

Cuts throughout Ohio

Not all public universities in Ohio grew their budget. The University of Cincinnati’s $1.1 billion budget was a 3.3 percent decrease from last year after losing 13.5 percent in state funding.

“FY 2012 was a difficult year for budgeting,” said Jan Diegmueller, executive director of Budget Planning at UC. “However, with strategic planning, budget cuts and increased efficiencies, UC has succeeded in implementing a balanced budget that maintains the quality of our academic and research mission.”

Similar to Kent State, Diegmueller said UC’s main focus of spending will continue to be the academic investments supporting “UC 2019: Accelerating Our Growth,” a strategic plan put forth by UC President Gregory Williams. The plan grades the university each year on its strides for better retention, research enterprise, diversity and community outreach, according to the UC website.

Contact Daniel Moore at [email protected]