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February 5, 2020

CT’s public universities report $457.3M operating loss in fiscal 2019

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Connecticut’s four public universities saw their collective financial picture worsen in 2019, as a spike in fringe benefit expenses swamped upticks in state appropriations and tuition.

A recently released fiscal year 2019 report for the universities -- Central Connecticut State University, Eastern Connecticut State University, Southern Connecticut State University and Western Connecticut State University -- says they reported a $457.3 million operating loss, a significant portion of which ($419.2 million) was offset by state funding and investment income.

Overall, the four college’s net position, a calculation of revenues, assets and financial liabilities, grew deeper into the red to negative $421.7 million, compared with negative $383.6 million in fiscal 2018. 

The fringe colleges’ expenses climbed 16 percent in 2019, from $241.2 million to $279.9 million.

That nearly $39 million spike overtook a $25.9 million increase in state general fund appropriations and modest growth in operating revenue, including tuition and fees, of $4.5 million, or 1 percent.

CSCU’s Board of Regents is scheduled to discuss the report during a meeting on Thursday.

In an “economic outlook” portion of the report, it refers to Connecticut entering “a second decade of slow economic expansion,” which has led to a “mixed and uncertain” outlook for the universities.

Enrollment is falling due to a decline in high school graduates in the state and “intense competition” in the higher-ed sector, the report said.

The four universities have seen four consecutive years of declines in combined undergraduate and graduate headcount.

“Unfortunately, state support for the CSU system has not been able to make up for struggling tuition revenues due to the state’s fiscal position and pressing need to address unfunded pension liabilities,” it reads.

Meanwhile, the colleges and universities system recently reported a larger-than-expected enrollment decline last fall, mirroring a national trend as the higher-education industry faces steep competition and a shrinking customer base.

In October, CSCU reported its overall headcount -- which includes part-time students-- at its four state universities, 12 community colleges and online Charter Oak State College shrank 3.8 percent in fall, 2019. The number of full-time equivalent students fell by 3.7 percent.

The discussion also comes amid CSCU President Mark Ojakian’s Students First consolidation plan that aims to save the state college system tens of millions of dollars annually by merging all 12 community colleges into one state college. That plan has faced opposition, but Ojakian has pointed to the system’s financial difficulties and declining enrollments.

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