When it comes to the budget proposals for education funding, are places like UConn and the rest of our state's colleges and universities really facing cuts?
Well, they say yes and rallied at the state capitol to try to prove it, but the Office of Policy Management Secretary Jeffrey Beckham disagrees. He explains why.
Mike Hydeck: So first up, are they facing shortfalls or not?
Jeffrey Beckham: Well, they say they are. It's apparent from the communications we've had within the last six or eight months that they do have some structural budget issues that they need to deal with. They are asking for all of the funding that we've given them the last couple of years, which as everyone knows, was supplemented greatly by federal funds, COVID era pandemic funding under the ARPA act. And it was well understood that that was one-time funding that should have been used for one-time expenses. They went without students for a while, as you know, so they were doing without some of the revenue that they have from having students on campus. So this was meant for that limited purpose during the pandemic emergency, but now that we're beyond that, it's time to move back to a more sustainable level of funding. And that's what the governor's budget provided for.
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Mike Hydeck: And when these releases came out, and after the protests at the Capitol, lawmakers started hinting and talking about maybe there's a workaround here relating to funding higher education, whether it's the revenue intercept or another option. What's your response to that?
Jeffrey Beckham: Well, the governor supports our fiscal guardrails. He's been very clear about that. And important fiscal guardrails include our spending cap. We're not allowed to spend more than a certain amount of money. It's based on last year's expenditures grown by inflation. And we mean to stay within those caps. So the governor is not interested in any budget gimmicks like that to circumvent the guardrails. Those guardrails have served us well the last several years, gotten us to a very strong financial position, and we don't want to go backwards.
Mike Hydeck: So right after the president of Connecticut's state colleges and universities had a news conference at the state capitol, you had a swift response. One of the things you said in your response, in addition to the charts of how much we've spent in education over the last several years, you also said now the state is going to start paying for something called unfunded legacy costs, something that the schools used to pay for. What's an example of one of those costs?
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Jeffrey Beckham: Well, when they refer to the legacy cost, they're referring to the unfunded pension liability that is attributable to employees at the colleges and universities and at UConn. They have cited that as a reason for many years now that they need ever increasing operating support subsidies from the state. We're offering to take that off their books, take it onto the general fund, pay for all of those unfunded liabilities of the pension costs for their retirees. And that will relieve them of that obligation. We believe that'll make them much more attractive too, at least the University of Connecticut, will be much more attractive in terms of attracting research grants, because they won't have to show those fringe benefit costs against what they would be using the research grants for.
Mike Hydeck: So when we talk globally or nationwide about how we fund education in America, it seems if the economy is enduring a rough patch, somehow tuition and fees continue to rise several percentage points. And then to offset that, students get things like aid or they get money for good grades called merit points. It feels like a giant shell game. Will we ever learn truly what it costs for my son or daughter's undergraduate degree in real money terms?
Jeffrey Beckham: Well, that's a great question. I guess I would direct that to the University of Connecticut and to the colleges and universities. They are independent, as you know. They run their own financial organization. The state is but one source of their revenue. They obviously have tuition, which you mentioned. They get quite a bit of money from the federal government on a regular basis, as well as grants from private foundations. So they have numerous sources of revenue. And they have numerous levers they can pull to control their costs, including their administrative overhead, their faculty to student ratio, things of that nature, before they reached the tuition increases that you mentioned.
Mike Hydeck: Now for years, including under the past president of the state's colleges and universities, there was a consolidation plan Mark Ojakian started to get going years ago. Did that help at all? When you look at the balance sheet, is that still underway? Where is that, do you know?
Jeffrey Beckham: That has largely, that one college for the community colleges, that's to bring them under one administration, that does help, that is a good start. But they have much more to do there. As you know, their enrollment has declined tremendously in the last decade or so. It's down about 30% at the community colleges. It's down about 20% at the regional universities. They've got a way to go to right size themselves for the changes that have happened in the higher education market.
Mike Hydeck: And they say that'll include hopefully, schooling students when it comes to manufacturing because of the huge need we have for jobs here in Connecticut, over 100,000 by some respects, right?
Jeffrey Beckham: We're absolutely committed to meeting the demand for people who want those higher education services and those training opportunities. And the governor is very committed to workforce development. It's one of the signature items of his agenda since he's been in office and we need to fully fund everything we need to do there to meet that demand and to get those jobs trained for and get those students where they need to be.
