Inflation rise mimics the national trend

Jackie Valley

Kent State’s budget reflects an inflation rate increase that follows the national trend, said David Creamer, senior vice president for administration.

According to the Commonfund Institute, the Higher Education Price Index rose 3.4 percent in the 2007 fiscal year, marking a decline from the 5 percent increase the previous year in the wake of Hurricane Katrina. In the 2005 fiscal year, the HEPI increased 3.6 percent.

Creamer said although it has not been formally calculated this year, Kent State’s inflation increase has been relatively close to the national rate.

John Griswold, executive director of the Commonfund Institute, said HEPI – based on the market basket used by colleges and universities – is relatively stable and usually stays within a point or a point-and-a-half of the Consumer Price Index.

According to the Commonfund Institute, the CPI increased 2.6 percent for the 2007 fiscal year.

“It usually doesn’t bounce around quite as much,” he said, citing the oil industry affected by Hurricane Katrina as the main source of the sharper rise in 2006.

HEPI is based on eight cost factors, including faculty salaries, administration salaries, clerical, service employees, fringe benefits, supplies and materials, utilities and miscellaneous services. Supplies and materials increased 6.8 percent, the highest among the cost factors.

John Flasco, director of procurement, said he thinks paper and gasoline prices caused the high supplies and materials increase.

Flasco said from January 2006 to June 2007, the price of printing and writing paper increased 27 percent.

In addition, Flasco said gasoline affects chemical supply costs because the chemical components often originate from gasoline.

For the overall inflation rate, Creamer said the major cost factors facing Kent State are faculty compensation, energy and technology.

Creamer said the university is constantly trying to balance employee compensation with student tuition.

“We have to retain the best faculty,” he said. “Our salary increases have been relatively modest in the last few years.”

In the technology-driven society, Creamer said another major cost pressure is maintaining and operating current technology.

“It used to be what you used to experience in a classroom was very static,” he said. “We see cost pressures today that we didn’t see before.”

So far, Creamer said, Kent State has been able to limit the amount of added fees to offset the rising material and technology costs.

“Other universities have much larger fees,” he said. “We’ve chosen to try to limit the amount of course fees, and we’ve never created a technology fee.”

Even so, Creamer said the university continues to discuss a technology fee, weighing the fee advantages and its impact on tuition affordability.

Creamer said the university plans several years in advance to accommodate the increased inflation rates.

“We try not to wait for the cost to change us,” he said. “We try to anticipate it and prepare for it.”

Contact administration reporter Jackie Valley at [email protected].