The Board of Regents voted Friday to go ahead with a budget request that is $61.5 million above what they were left with to run eight institutions after cuts this past year.
The trouble is, said Greg Stauffer, the state's associate commissioner for finance and facilities, as the economy sours, it's not only the state appropriations that go into a tailspin, but financial aid options for students, overall family and individual incomes and federal research dollars and private donations, leaving higher education institutions running on the bare minimum.
"The economic environment clearly has a significant impact on the situation we're in," Stauffer said. "But then again, higher education clearly is the way out of a negative economy."
Higher education can provide a great dividend in the long term, both to the state and to individuals who make it through graduation. Utah's support for its schools already is below the national average.
"Our institutions are complex financial organizations," said Paul Morris, assistant commissioner of budget and planning. He likened colleges and universities to miniature communities, responsible to provide education, but also housing, stores carrying supplies, activities for the community to participate in and food. "To pull all this off, we count on a lot of revenue sources," he said.
The biggest revenue source for Utah schools is the state, in the form of sales and income tax allocated from the Education Fund. But schools also rely on tuition and fees from students.
It all adds up to more than a billion dollars.
With more than 13,000 employees relying on that revenue to pay their own bills, "it takes a lot of support to run an institution," Morris said.
The ongoing cuts, which officials are estimating will continue at 17 percent, are a "hard reality" to face, Morris said. Increased enrollments set up the system for a perfect storm, one that if not handled correctly, could mean decreased efficiencies at Utah institutions.
"We hope at some point we get some funding to help with it all," Morris said.
Included in the operating budget request summary is what Commissioner of Higher Education William Sederburg is calling "mission-based funding," or "an incentive for institutions to fulfill their missions with quality," he said. The $30 million request is a new take on what some other states are doing to be accountable for what they say they intend to do. For some schools, it would mean turning out research, others degrees, and for others, further development of programming.
The details, Sederburg said, must still be worked out, but he asked regents for a "conceptual blessing," with a hope that a full agreement could be worked out in a couple of years.
Other items in the budget increase include mandatory utility rate increases, full funding for various scholarship and scholars programs offered by the Utah System of Higher Education, as well as money for the Engineering Initiative and various institutional priorities.
Regents also approved a list of their top-11 capital development priorities, which if accomplished, would cost $320 million. Rarely are all the building requests approved by the Legislature, but this year's projects, all highly prioritized by individual institution presidents, would generate nearly a million new square feet of building space, in the form of classrooms, labs, new infrastructure and remodeled student commons areas.