How CT’s regional colleges want to mitigate $140M budget shortfall

In preparation for a steep $140 million shortfall next fiscal year, leadership from the Connecticut State Colleges & Universities system presented a deficit mitigation plan to the Board of Regents Wednesday that would cut personnel costs by more than $35 million without layoffs.

For months, stakeholders have been sent into a spiral about whether the state’s 12 community colleges, four regional state universities and online Charter Oak College will be able to operate without additional state funding as millions of dollars of pandemic relief funds expire. 

The plan relies on a mix of spending cuts and new revenues to cover three-quarters of the projected shortfall in the next budget year, which begins in July. But it also asks Gov. Ned Lamont and the General Assembly to cover the $47.6 million left to balance the budget that begins in July 2024. Leadership from the CSCU system said its “balanced path forward” focuses on “streamlining system offices,” and “supporting ‘right-sized’ operations.”

But officials didn’t say Wednesday how many jobs might be eliminated.

“We’ve made significant progress in trying to close projected budget deficits for this current fiscal year and for fiscal year 2025, and we’re not quite there yet. There may be more that we need to do,” said Chancellor Terrence Cheng. “These steps in mitigation plans do not include layoffs of full-time bargain employees, campus closures or an overdependence on reserves.”

“I hope this process will demonstrate to the state government – the governor’s office, [the Office of Policy and Management] and the state legislature – that [the CSCU system] is taking this process seriously and we’re trying to use taxpayer money responsibly,” said Richard Porth, who serves on the board. “But the [decisions the state made] for FY25, don’t relate to reality as to what’s necessary to serve our students and to work through the future prosperity of the state of Connecticut.”

Personnel reductions would save more than $27 million this fiscal year, and $35.4 million in 2024-25. The plan also calls for cuts to security, and travel costs and other efficiencies expected to save $10 million this year and $13.4 million next year.

The four regional universities, CT State Community College, and Charter Oak College presented their own mitigation plans, with nearly all relying on some combination of: eliminating vacant and temporary positions, reducing executive positions, hiring freezes, program reductions and cuts to student services.

Central Connecticut State University in New Britain, with finances that are the healthiest among all schools within the CSCU system, did not propose any personnel cutbacks.

But the overall mitigation plan’s significant reliance on trimming staffing sparked strong objections from union members and students.

“Governor Lamont and his budget secretary Jeff Beckham have decided that it’s more important to maintain our state’s inequality than to educate students from Connecticut’s middle and working classes,” said John O’Connor, the secretary of CSU-AAUP, the union representing regional state university employees, at a news conference prior to the board meeting. “The budget mitigation plan … is larger class sizes. It has fewer faculty. It has canceled sections. It has higher tuition. Each of these cuts on their own will make it harder for students to get into college and stay there until they graduate.”

“The consolidation of programs might not sound like a big deal. If my program moves to Eastern or Western – I’ll just go there with it, but for my friends who take the bus to school, we can’t take a bus from New Haven to Danbury,” said Rakim Grant, a political science senior at Southern Connecticut State University. “So when they talk about consolidating programs, what they’re really talking about is cutting hundreds of us off and cutting us off from our education and from hope for a better future. [The plans] will be presented as small tweaks to the system, but understand they will have a monumental impact on me and thousands of us in the CSCU system. When they rightsize, they’ll be rightsizing us out. When they consolidate, they’ll be consolidating us out. When they raise the price, they will be pricing us out.”

The mitigation plan also is counting on higher-than-anticipated enrollment to bolster tuition or other fees at several schools. Other parts of the plan rely on increased cafeteria sales, charging higher rates for room rentals and surplus equipment sales. Projections call for overall revenues to jump almost $17 million this fiscal year and $30 million in 2024-25.

The Board of Regents’ system also would tap its reserves, applying $12.1 million this fiscal year and $20.4 million in the next budget to help balance the books.

What can the higher ed institutions expect?

Lloyd Blanchard, the CSCU system’s CFO, said declines in tuition and fee revenues, enrollment, state appropriations revenue, effects from the pandemic and additional fringe costs contributed to the major budget deficit. 

But even with all of the steps proposed in the mitigation plan, “it’s not enough,” Blanchard said. “That’s how large the deficit is.”

CT State Community College will likely feel the biggest hit.

“This has been an extremely painful process,” said CT State President John Maduko, adding that the community college system has “eliminated $83.6 million of our $124.9 million biennial deficit, fully extinguishing our FY24 deficit of $33.6 million and reducing our FY25 deficit from $91.3 million to $21.3 million.”

The community college system saved $11 million in “personnel and fringe savings by eliminating vacant positions, holding positions vacant, delaying the refill of vacant positions,” and “making permanent change to the management structure,” according to a presentation from Maduko and CFO Kerry Kelley. The community college system eliminated eight executive positions including five regional presidents or vice presidents and three associate vice presidents and continues to eliminate temporary educational assistants and part-time lecturers.

CT State officials said that 27% of their mitigation strategies will directly impact students, especially looking at reduction of staffing, hours of operation, student labor and closing fitness centers. About 40% of the strategies impact faculty and staff.

“I just want to make sure that as we ask, request, and are talking about diversity that we understand that though it’s possible to cut to the extent you described here, I don’t think it’s advisable, or even ethical, to make cuts that low,” said Colena Sesanker, a professor at Gateway and board member, after the presentation.

Out of the four universities, Western Connecticut State University is expected to have the most funds to make up with $12.1 million this fiscal year and $15.3 million next year. The university’s president said they plan to improve operation and facility costs, in addition to reevaluate their program offerings.

Southern is expected to find a solution to a $4.3 million gap this year, followed by $12.1 million next year. The school is hoping to reach 3.5% enrollment growth which would equal about $10 million of revenue. Leadership also said they plan to extend their hiring freeze for “a current estimated savings of at least $500,000, further reduce adjunct [professors], estimated $1.2 million in savings,” and save around $1.4 million in unfilled vacant positions and retirements.

At Eastern, officials say they’ve been financially “conservative, for years,” through staff reductions in certain management staff, expansions of online graduate programs and the start of a new nursing program. The university expects to have a $2.1 million surplus this year, follow by “breaking even,” in the 2025 fiscal year.

Central Connecticut State University is the “healthiest financially,” Blanchard said.

At Central, officials said the “foundation” of their financial position has been years of work, including about 60 reviews of “areas of operation and student support services and programs,” a reduced budget by $13.1 million in 2021, hiring freezes and emphasized focuses on enrollment, retention and housing. Last academic year, the university’s reserves sat at $99.1 million and it saw a 2.6% enrollment increase.

Charter Oak said it didn’t experience similar challenges as other schools in the system during the pandemic. Since it’s online only, the college has seen steady enrollment from returning students and with its library of 430 classes, hopes to scale up by 9% in upcoming years.

‘Piling cuts after cuts’

The co-chairs of the legislature’s Higher Education and Employment Advancement Committee both praised Cheng and the board for working to avoid layoffs, particularly of faculty.

But Sen. Derek Slap, D-West Hartford, and Rep. Gregg Haddad, D-Mansfield, both said legislators will be very curious to know how many jobs — especially among faculty — would need to be eliminated via attrition to fulfill the mitigation plan’s goal of achieving $35.4 million in annual personnel cost savings by next fiscal year.

“I continue to be concerned that students really are the ones who are going to bear the negative consequences of these reductions,” Haddad said, adding the system already has lost thousands of adjunct professors in recent years. “They [students] are the ones that will see the diminishment of the services.”

And Slap said any downsizing mustn’t weaken programs that businesses have identified as crucial to reverse labor shortages, such as nursing, teaching and mental health clinicians.

As a state we are in dire need of them,” Slap said. “We need to be asking, … do we want higher education as an economic engine to keep students in state?”

Slap and Haddad also noted that the mitigation plan wouldn’t ensure long-term economic stability, even if lawmakers grant the extra $47.6 million next fiscal year that the Board of Regents seeks.

That’s because after the 2024-25 fiscal year, about $76 million in federal pandemic grants and other temporary funds assigned to the system expires. In other words, even if legislators agree next spring to cuts in state colleges and universities, will there need to be a second round one year after that?

“We could really regret it if we keep hacking away at this,” Slap said. “We’re all very concerned about affordability and not pricing students out of the ability to get an education.”

“It’s cuts piling after cuts,” Haddad said, adding that students already “are increasingly footing the bill.”

Seth Freeman, a professor at Capitol Community College and president of the Congress of Connecticut Community Colleges — commonly known as the 4Cs, also said the system administration needs to release projections soon on how many positions might be eliminated under this plan.

“The system office cannot pretend to have accounted for the impacts to our students if they aren’t able to answer this simple question,” Freeman said. “They should be honest about the number of unfilled vacancies.”