June 13, 2018

UConn tuition hike warning brings rebuke from top Republican

The top Republican in the state Senate is challenging a warning from University of Connecticut officials that further tuition hikes may be needed as soon as the 2019-20 fiscal year to offset declining state funding.

Senate Republican leader Len Fasano of North Haven said Wednesday that "the extravagance and overspending we have seen at UConn" is the driving force behind rising tuition and fees.

"For years, UConn's spending on questionable priorities with little oversight has been out of control," he said, blaming what he called unaffordable contracts, exorbitant raises and unchecked spending. "The problems they face today were self-created by a university that has failed to live within its means and has shown questionable judgment, prioritizing administrative bloat over the needs of their students."

Fasano's statements came two days after the UConn Board of Trustees' Financial Affairs Committee received an outline of the administration's budget proposal for the 2018-19 fiscal year — as well as projections of potential shortfalls reaching 2.2 percent in 2020 and 4.6 percent in 2021. Those percentages translate into almost $29 million in 2020 and $63 million the year after that.

Those gaps, university officials said, raise the possibility UConn might need to impose tuition and fee hikes behind those ordered in a four-year plan running from 2016-17 through 2019-20.

"We wanted to draw attention to the potential for significant deficits in the future," Scott A. Jordan, the university's chief financial officer, said Wednesday.

The budget framework outlined Monday includes proposals to spend $1.37 billion in 2018-19 for the main campus in Storrs and the branch campuses, and just under $1.05 billion on the UConn Health Center in Farmington.

State block grants and additional payments to cover a portion of fringe benefit costs will provide 25 percent of the revenue needed to support the main UConn budget, and 23 percent of the health center budget in the upcoming fiscal year.

Tuition and fees are the single-largest source for the main budget, providing 40 percent of the revenue. At the health center, which includes John Dempsey Hospital as well as medical and dental schools, patient revenue does the heavy lifting, supporting 51 percent of the budget.

State support for UConn operations has eroded steadily for nearly three decades. Though legislatures and governors over that period have increased financing for capital projects, the general policy also has been for the flagship university to replace lost state aid with tuition and fee revenues as the main campus and its branches add students.

Over the last nine years, state support for the main campus and UConn branches has grown just 3.6 percent, or less than 4/10ths of 1 percent annually.

The state is grappling with its own fiscal woes as pension and other retirement benefit costs surge rapidly after more than seven decades of inadequate funding.

One side effect of this trend, though, is that UConn students and their parents effectively are absorbing some of state government's legacy of debt.

For example, in 2011, state support covered 67 percent of UConn's fringe benefit costs. By 2021, university officials project, the state will cover just 33 percent.

At the health center, UConn already anticipates covering 71 percent of fringe costs in the 2018-19 fiscal year with resources other than its state aid.

Further complicating matters is the university's participation in the state employee unions' concessions deal struck in 2017 — a pact that affected nearly all bargaining units except for the state police.

UConn, like the rest of state government, is barred from large-scale layoffs through the 2020-21 fiscal year. And while workers took a pay freeze last fiscal year, they are eligible for $2,000 lump-sum raises in 2018-19 and 5.5 percent hikes in each of the two fiscal years after that.

But Fasano said UConn shares the blame for that concessions deal, which he and many other Republican legislators argue did not secure sufficient savings in exchange for extending pension and other retirement benefit programs through 2027.

"Where was UConn's voice when SEBAC was voted on?" Fasano asked. While Gov. Dannel P. Malloy negotiated concessions with most unions within the State Employees Bargaining Agent Coalition, UConn negotiated on behalf of the state with the unions representing its employees.

Fasano also said this is part of a larger trend of poor budgetary decisions at UConn. Other issues he cited include:

  • A new four-year contract for graduate and research assistants
  • A contract provision that guarantees departing UConn President Susan Herbst a tenured position teaching political science at a rate of pay equal to the highest-paid faculty member outside of the health center. Fasano says that would amount to at least $300,000.
  • "Significant pay increases" were awarded to top administrative and athletic department staff in 2013 and 2014 despite state budget cuts.
  • UConn negotiated a "tone deaf" contract that would have guaranteed non-teaching professionals annual raises of up to 4.5 percent. The university and the UConn Professional Employees Association later withdrew the deal amid bipartisan legislative opposition.
  • And a recent state audit found the health center failed to properly monitor multi-million-dollar contracts, paid excessive compensatory time, rehired retirees in conflict with an executive order and increased pay for staff who approved a consulting contract for the interim health center CEO Andrew Agwunobi.

Thomas E. Krueger, chairman of the UConn Board of Trustees, declined to weigh in on Fasano's charges, but said the university has been diligent in recent years at curtailing discretionary spending. "UConn has been very successful at looking for and finding efficiencies in operating costs and continues its intense focus in this area," he said.

UConn spokeswoman Stephanie Reitz added that "Although UConn has implemented tens of millions of dollars in cost-cutting and efficiencies, the SEBAC agreement's 'no layoff' provision prevents the university from managing the size of its workforce, which is our largest cost. It's not a meaningful solution to suggest that comparatively modest spending reductions around the margins – focusing on hot-button but peripheral issues – could solve the very significant, long-term structural problems we face."

Reitz said "the university would very much like to work with Senator Fasano and his colleagues to continue the forward momentum and success of the university in these difficult budgetary times."

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