State Slashes University’s Budget Again
The University of Central Oklahoma is facing an additional $260,000 budget cut for Fiscal Year 2018, resulting from the $44.7 million slash to state financial allocations that was included in the 2018 budget approved by Oklahoma Gov. Mary Fallin at the end of February.
The cut represents an additional 2 percent reduction to UCO’s budget on top of the 6.1 percent it already sustained at the beginning of FY 2018. While it remains to be determined where the cuts will be made from the university’s operating budget, the latest reduction will see the university enacting more permanent financial fixes, according to Vice President for Finance Patti Neuhold.
“It’s too early to offer any suggestions on what adjustments may be made,” Neuhold said. “We are at a point where we have to make longer-term adjustments rather than temporary adjustments in order to ensure financial strength in the future, and these types of adjustments will be made for the 2019 fiscal year budget.”
The $260,000 cut will be implemented proportionally amongst the university’s divisions and the specific areas to be cut will be decided by the leadership of each division.
The state budget requires the reductions to be made between now and June 30, and represents a more sudden and dramatic cut compared to the cuts made at the beginning of the year, according to UCO President Don Betz.
“We are obviously not pleased that we have another cut to our budget,” Betz said. “Coming so late in the year, in the last four months, you end up having to draw down almost three times the amount because you can only spread it over four months, as opposed to 12.”
Since 2008, the university has seen a 40 percent reduction in state appropriations. With approximately 22 percent of its funding currently derived from state funding, UCO already receives the lowest rate of taxpayer contribution per student among the state’s 13 public universities.
While a decrease in state appropriations typically requires an increased reliance on tuition, UCO’s declining enrollment rates for both domestic and international students have also contributed to the institution’s lack of funding.
Coming off of a record student population of 17,271 in 2013, fall semester enrollment has declined by 6.49 over the last five years, while spring semester enrollment has declined by 10.1 percent over the last five years.
The decline in enrollment has been most significant amongst international students, a population that has seen an enrollment decline of approximately 25 percent over the last five years.
“When that happens, you have to reframe the formula that you undertake to meet your fiscal responsibilities, so you have to build a smaller budget because you have fewer students,” Betz said. “You have to do some things differently and then you have to proceed to build a strategic enrollment plan that targets different populations of students.”
These potential populations could consist of domestic out-of-state students, as well as non-traditional students such as returning adults and transfers, who already make up a sizable portion of the university’s student population, according to Betz.
“What you’ll be seeing is that Enrollment Management is very hard at work creating a very flexible, adaptable plan for enrollment,” Betz said. “You know, you don’t get to turn these things around in three or four minutes, you have to work at it, but the plans are being very seriously developed.”
The state’s new budget requires that most state agencies cut between 1 and 2 percent of their remaining spending plans. The state’s higher education budget was an exception, receiving a cut of only 0.6 percent or $4.7 million.
Higher education has already sustained a staggering 16 percent cut in Fiscal Year 2017 and another 6 percent decrease in FY 2018. Each additional reduction continues to put ever increasing strain on the state’s colleges and universities, according to Angela Caddell, vice chancellor for Communications with the Oklahoma State Regents for Higher Education.
“While the state system has continued to cut costs in an effort to protect academic and student services as much as possible, we have reached a tipping point,” Caddell said. “Additional budget cuts will result in increasingly negative impacts.”
These impacts include significant reductions in funding for statewide programs, such as concurrent enrollment and tuition waivers. Cuts also threaten to hinder the processes for financial aid distribution and institutional accreditation, according to Caddell.
To combat these cuts, OSRHE voted in December to request a higher education budget of $909.1 million for Fiscal Year 2019. The funding request represents a 16.6 percent increase, compared to the allocation for FY 2018, but Caddell said it is still too early to comment on the outlook for FY 2019.
“Given Oklahoma higher education’s unique role in advancing our state’s degree completion agenda and meeting the state’s workforce development needs, we will continue to make the case throughout the current legislative session that higher education must be a top funding priority,” Caddell said.
While the state legislature had adopted a budget for FY 2018 last May, the budget fell through when the Oklahoma Supreme Court ruled its proposed cigarette tax unconstitutional in August.
Today I signed House Bill 1020XX, the budget bill for the 2018 fiscal year. Passage of the Step Up Oklahoma plan that failed earlier this month would have helped fill our budget hole for the current fiscal year & put Oklahoma on a more stable budget path https://t.co/YSHuXR9B3c
— Governor Mary Fallin (@GovMaryFallin) February 27, 2018
The tax was expected to bring in more than $200 million and the Supreme Court’s decision left a deficit that state lawmakers were unable to solve during a four month special session convened by Fallin last year.
“Developing a budget in this difficult fiscal and political climate is never easy,” Fallin said. “This budget keeps our government operating and, despite challenging circumstances, funds our core mission services.”
With the FY 2018 budget finally settled, lawmakers now have until the end of the legislative session in May to address a $167.8 million shortfall for FY 2019.
“Of greater concern to our campus community will be next year’s budget,” Neuhold said. “Rising costs of business services, supply and labor, as well as the continued decline in enrollment, are all factors exerting downward pressure on our budget, but we will make adjustments as necessary to minimize this impact on our classrooms.”