The University of Connecticut and the Board of Regents are poised to finalize their budgets in the coming weeks. Both systems say they can balance their budget thanks, in part, to additional money included in the $51-billion budget recently signed by Gov. Ned Lamont.
That reprieve only seems temporary, though, with higher education officials warning that deficits loom in fiscal year 2025. That seems to be setting up another budget fight when lawmakers return in February.
The legislature and Lamont “really put them on notice that they should not expect that they’re going to get additional funding once the ARPA (American Rescue Plan Act funding runs out,” said Rep. Greg Haddad, D-Mansfield, co-chairman of the legislature’s Higher Education and Employment Advancement Committee.
If the schools ask for more money next year, they’ll likely be faced with tough questions about what they’re doing to cut costs.
“We want to make sure the money is going to the students,” said Rep. Irene Haines, R-East Haddam, a ranking member on the higher education committee.
The budget allocates a total of $556.8 million for UConn and the UConn Health Center for operating costs, according to the Office of Policy and Management. Connecticut State Colleges and Universities Chief Financial Officer Ben Barnes told the Board of Regents Friday that the system is getting $632.5 million.
Sizeable chunks of those allocations come from ARPA funding and money carried forward from the current year’s surplus, though.
So while both systems see small increases in their baseline grants from the state in fiscal year 2025, total funding is scheduled to fall. As currently written, the budget gives UConn $468.4 million in the second year and the CSCU system $516.5 million.
“The reality is that, as the budget is structured, we will still be left with a significant shortfall in (fiscal year) 2025,” CSCU President Terrence Chung said in a message to students and faculty after the legislature approved the budget.
Similarly, UConn President Radenka Maric said in a message that the budget “will require financial improvement plans to generate new revenues and reduce expenses.” Spokespeople for both schools declined to comment further beyond the presidents’ messages.
The Board of Regents and UConn’s Board of Trustees are both scheduled to meet again on June 28. Haddad said he expects any budget gaps for the upcoming fiscal year will be “somewhat manageable.”
He’s more worried about how things look in the second year, noting UConn and the CSCU system have been using ARPA funds and other one-time money to pay for operating expenses.
“We need to figure out a way to create room under the cap to continue to make, if not all, then part of that funding,” he said.
Haddad said the state has to be willing to invest more in higher education to help prevent tuition increases that make even the regional state universities unaffordable for many in-state students.
Others, though, have argued the two systems have to do more to bring their costs down.
“You cannot keep doing things the same old way because you’ve always done it that way,” Lamont said during a June 6 press conference on the budget.
A spokesman for Lamont declined to comment further, as did a spokesman for OPM.
The CSCU system has seen enrollment drop by roughly 30 percent, according to OPM. The budget includes funding for an independent third-party to make recommendations on cost savings.
Haines, meanwhile, noted the budget also added information the schools have to give to the legislature on what they’re doing to save money. The schools don’t have to reach any benchmarks, but she said legislators could consider the information when deciding whether to provide more money.
“The first round of funding is there because they need it, but we also want accountability to come back to us and report to say ‘this is what this did,’” she said.
While Haddad is focused on funding, he agrees the two systems should also try to find efficiencies. The budget includes a committee to revisit a 10-year plan for the state’s universities and colleges.
Haines, meanwhile, acknowledged simple drops in enrollment don’t necessarily lead to similar room to slash the budget. She said some costs, like electricity, don’t get lower for each student who leaves.
The state is also trying to help, including absorbing UConn’s retirement costs into the Comptroller’s budget along with costs for other state employees. UConn had said that sometimes deters potential research funders who don’t want their grants to pay for fringe benefits.
Lamont, meanwhile, said he wants to make sure the colleges and universities are producing the types of graduates employers in Connecticut are looking for.
“We’ve got to continue to make the reforms we need to make sure our higher ed works in this day and age,” he said.
He noted roughly 100,000 jobs remain unfilled across the state, but pointed to funding in the budget that utilizes the community colleges for job training.