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Regents request $53M in state funds

The Board of Regents took its first step to determine the value of the U’s tuition hike for next year.

The Utah State Board of Regents on Tuesday approved its 2005-2006 budget request, which it will send to the State Legislature after approval from Gov. Olene Walker.

While state tax dollars and student tuition money both contribute to funding institutions of higher education, the students’ portion of the ratio is on the rise with U students paying 34 percent, up 16 percentage points from 20 years ago.

“Over time, students have begun to pick up a bigger share, not to say that shift shouldn’t occur, but it shouldn’t occur without anyone thinking about it,” Brinkman said.

Consideration of the requested state appropriations will be debated at the 2005 General Legislative Session beginning Jan. 17. The Legislature is expected to appropriate a higher education budget of at least $579.9 million prior to discussing the additional requests from the Regents.

“If we are dealing with a public school, there has to be good quality education and affordability,” said Paul Brinkman, U associate vice president for budget and planning. “We’ve got to be accessible for any qualified student. Locking someone out has not been the American way.”

However, students must carry some of the financial load implicit with running a university, the question is where to strike that balance.

Brinkman said that is a values question that is decided on a state-by-state basis, as there is no predetermined federal recipe.

“There’s not one way to go about balancing the responsibility shared between the state government and students’ tuition,” he said. “There are 50 ways.”

Students across the country are encountering the same phenomenon as roads, prisons and health-care costs continue to pull tax dollars from education.

“One theory to explain this is that tuition is rising faster than the tax base,” Brinkman said.

The Board of Regents keeps a running tally of potential tuition increases so they can present the final estimate in a Truth in Tuition meeting with college students and administrators.

This year’s tuition increases are largely dependent on whether and to what level salary increases for all state employees are accepted by the Legislature.

For a typical 12-hour U student, a 1 percent salary increase would yield a tuition hike of $29 for a resident or $90 for a non-resident. A 2 percent salary raise would require a $44 increase for the resident and a $136 jump for a non-resident, and a 3 percent increase in salary would mean resident students would face a $59 jump in tuition with non-residents paying an additional $189.

The requested salary increase falls under the category of ongoing funds, which, along with one-time and supplemental increases, makes up the Regents’ requested state money for the upcoming year.

Ongoing funds are viewed as the most important appropriation, but are also traditionally the most difficult funds to obtain from the Legislature, according to Brinkman.

Budget Priorities

(Ongoing Funds)

After considering a list of $173 million in desired ongoing funding for compensation, infrastructure, state strategic priorities and access, Regents managed to narrow their request to $35.4 million.

“We have many needs, however, we have worked hard to focus on a few of the most critical priorities, taking into account the financial constraints continued to be faced by the State,” said Regents Chairperson Nolan Karras.

Accepted ongoing funds will be given to higher learning institutions this year, and then given every year after as part of the base budget.

That money will be allocated to the Utah System of Higher Education to disperse among its nine schools.

Of those institutions, the U is “by far the single biggest beneficiary” of the funds, traditionally receiving about 37 percent of them, Brinkman said.

At that rate, the U stands to receive more than $210 million from the base budget alone.

The requested $35.4 million in budget priorities is a 6.1 percent increase from last year’s request.

At $19 million, infrastructure costs make up the biggest request within ongoing funds.

While the Legislature has historically funded infrastructure needs requested by the Regents-such as operations and maintenance and fuel and power costs- that trend has changed in recent years.

“The net effect is that funds targeted for institutional and research purposes have been reallocated to pay these bills, affecting virtually every institutional budget,” said Richard Kendell, commissioner of higher education. “Legislative appropriations for these infrastructure costs will help institutions respond to other priorities such as access for all students, program quality and new initiatives to drive Utah’s economy.”

Those costs include $2.6 million in funds needed for operating and maintaining new facilities in the coming year and $2.5 million requested by the Board of Regents last year, which the Legislature failed to address.

The $2.6 million for the coming year would benefit the U as $1.53 million would go toward a new building on campus.

Another category within ongoing funds is the Regents request for $7,030,000 in state strategic priorities.

Of the five strategic priorities listed on the budget, only the nursing initiative and engineering initiative, which attempt to promote more students to those respective fields, directly affect the U.

Need-based student aid would assist low-income students and new century scholarships would give aid to students who have obtained associate degrees during high school.

The fourth category within ongoing funding is access in the form of “institution funding correction.”

That ambiguous description refers to a three-tiered request.

Of the $5 million requested, half would go toward enrollment-which would benefit the U-one-fourth would go toward salary equity and one-fourth toward fixing the tax/tuition ratio at three institutions including Utah Valley State College, where student tuition pays an excess of 50 percent of the college’s budget.

One-Time Increases

Legislators award one-time allocations more freely than ongoing funds because there is no long-term financial commitment involved.

Regents repeated certain requests, such as the engineering and nursing initiative, in this category as a backup in case legislators decide not to allocate ongoing funds to those areas.

Supplemental Increases

Funds in this category would be appropriated immediately for the current year upon Legislature approval in February or March.

Allocations in this category often come from excess taxes collected from the previous legislative year and are funded ahead of time.

Regents identified $12.9 million in supplemental needs for fuel and power costs.

“We take fuel and power any way they want to give it,” Brinkman said. “Operations and maintenance requests have a good chance in the Legislature, but I don’t know about fuel and power.”

He added that rather than depending on the Legislature to give the U necessary money to pay rising fuel and power expenses, the U will perform a conservation project to study each building, who is in there, when they are in there and whether a device could be installed to shut off certain things such as lights.

Though fuel and power costs cannot be eliminated, “We can hold down cost increases,” Brinkman said.

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Budget priorities, as determined by the Regents2005-2006 State Tax Funds Adjusted Base Budget: $579,866,100

USHE Budget Priorities $35,441,600Compensation: $3,750,000Compensation increases to be determined for Higher Education employees equal to whatever is funded for public employees and schoolteachers.$3.75 million for the retention of key faculty and staff infrastructure.Infrastructure: $19,661,600$5.1 million for operation and maintenance of new facilities (including $2.5 million in O&M not funded in 2004 and $2.6 million for this year).$14.3 million for fuel and power cost increases.$200,000 for state Internal Service Fund increases.State Strategic Priorities: $7,030,000$2 million for nursing initiative to train more nurses, matched by $1 million from the private sector (Phase 2 of 3).$1.5 million for the engineering and computer science initiative, matched by $1.5 million (Phase 4 of 5).$1.5 million for enhancement of technology-delivered courses.$1.5 million for need based student Financial Aid (replacing one-time money appropriated in 2004).$530,000 for New Century Scholarships to meet growing demandAccess: $5,000,000$5 million toward Institutional Funding Corrections, allocated to institutions on a formula that looks at three factors of state support: portion of state funding, unfunded enrollment growth and salary inequities. To fully correct these factors would cost $88.1 million.

One-Time Increases $4,815,000Core Support Enhancements$1 million for software licensing and upgrades$1 million for the Engineering Initiative$500,000 for the Nursing Initiative$500,000 for Libraries$265,000 for student financial aid base maintenance-federal match$500,000 for student financial aid base maintenance-UCOPE$450,000 for the T.H. Bell teacher incentive loan program$600,000 for ADA Accommodations

Supplemental Increases $12,852,8002004-2005 Fuel and Power: $12,599,2002004-2005 New Century Scholarships: $253,600

Request SummaryUSHE Priorities: $35,441,600One-time Increases: $4,815,000Supplemental Increases: $12,852,800

Total Tax Funds Request (Ongoing, One-time and Supplemental): 53,109,400

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