Tuition increases approved to help cover CSCU system’s growing budget

Enrolling in Connecticut’s public community colleges and regional state universities will be getting more expensive next year, and students are concerned.

“What’s it going to cost, Connecticut? More than we’re willing to pay,” chanted about 100 students Thursday at Capital Community College.  They expressed their dissatisfaction just after the Board of Regents for Higher Education voted to increase tuition and fees next school year by 4.8 to 5.3 percent.

Students and college leaders blame state government for the system’s budget problems and the tuition and fee increase — between $186 and $456 annually for full-time students.

“It started, of course, when the governor gave his budget address in February and announced that our system would be receiving a $20.5 million cut,” system President Gregory W. Gray told the board. “The 17 institutions doing outstanding work are now in jeopardy.”

Funding to support the sprawling network of schools has been on a roller coaster over the last several years. Facing an historic $3.7 billion budget shortfall in 2012, state lawmakers reduced funding to the system by 10 percent. But funding has since rebounded, and last year the state spent $522.7 million on the colleges — more than in any of the five previous years.

If Gov. Dannel P. Malloy‘s proposed cuts for the coming fiscal year are approved, state support for the schools’ block grant would still be higher than in every year but the current one. The problem is that the system’s budget is growing much faster than the amount of state support, so the percentage of its budget that the state covers is shrinking.

The college system has forecast its budget to grow by $63.7 million next year — a 5.4 percent increase — if officials don’t make any cuts.

Board member Lawrence J. DeNardis — a retired private college president and former Republican congressman — said before the vote he is frustrated that the board is focusing on how to spend more money through tuition hikes instead of talking about why operating costs are rising.

“We have not identified the problem,” said DeNardis. Unless we resize elements of our expenditures…we are going to get deeper and deeper and deeper in a structural imbalance.”

Students are planning to rally at the state Capitol on April 29, the day before the legislative budget-writting committee’s deadline to vote on a budget.

Cuts linger

The additional revenue from the tuition increases will only close about half of the $48.6 million structural deficit the $1.2 billion college system faces.

Officials plan to cut $22 million to close the remainder.

The board members said they are considering achieving $10 million of those cuts through staff attrition. Another $10 million may be achieved by laying people off, and officials have already begun issuing notices at some colleges.

“I want the community to know that the decision not to continue these employment agreements has nothing to do with performance, but is based on the college’s uncertain budget situation,” Three Rivers Community College President Mary Ellen Jukoski wrote to her staff last weekend.

At Southern Connecticut State University in New Haven, the decision has already been made not to offer several courses in the College of Arts and Sciences next semester.

Gray told the board Thursday he has written every union asking they instead consider furloughs in an effort to avoid layoffs.

“I would much rather go through furloughs,” he said.

As officials create a budget for the board to adopt in the coming months, Gray said he will try to avoid workforce reductions, but said, “that may be very difficult to do.”

The cuts and the tuition increases are upsetting to students.

“I must remind you that this increase is much too high for your average student to afford,” said Eugene Bell, a student member of the Board of Regents. “With the way we are headed as a system and a state, there will not be many students to teach in a system of excellence, because they will not able to afford education at all, never mind a system of excellence.” Bell is one of the board’s two student representatives who voted against the plan to increase tuition and fees.

Increasing cost to run the schools

The $63.7 million in increased costs is almost entirely driven by increased personnel costs, according to college budget officials. The system is obligated by contract to provide its unionized staff with a 5 percent pay raise next year.

Another cost driver is that hundreds of employees are switching from the state’s 401k-type retirement plan to the state’s pension system each year. The university must pay into the pension fund to cover current workers’ future benefits, but it also is paying more to catch up on contributions the state failed to make to the pension system in years past.

This year’s total pension contribution equals nearly 51 percent of participating workers’ salaries. The Alternate Retirement Plan — the 401k-type program — doesn’t have a troubled fiscal past. As a result, the state’s required contribution this year represents just 12 percent of workers’ salaries.

For example, for a university employee earning $50,000 annually, the system would pay a $6,000 annual contribution in the alternate plan, but $25,500 to the state pension program.

In an attempt to save money for the state, the State Employees Bargaining Agent Coalition negotiated in 2011 an option enabling its members to switch to a new tier of the state’s pension plan.

The lawyer for the state union, Dan Livingston, said during an interview Thursday that the colleges and universities should not have to contribute the 51 percent rate for their employees who switch to this new tier since that plan does not have the unfunded liabilities the other state pension plans have.

Livingston said the universities and colleges should not have to bolster the state’s other cash-starved pensions with their contributions. He estimates this new plan actually only costs universities and colleges 3.5 percent of participating workers salaries. (Read more about that here.)

“We are continuing to work with the administration to hopefully resolve this,” said Livingston. “We don’t think higher education should have to pay that” higher rate.

Erika Steiner, the budget chief for the college system, said that college leaders would welcome it if the state did not require they contribute so much.

“We would certainly want that to happen,” she said Thursday.

But there has been no action by the state on that issue. Benjamin Barnes, the governor’s budget director, said in a statement he is willing to have a conversation on how the state pays for higher education.

“The way we calculate fringe benefits for higher education is a historic artifact. In the past we have proposed changing how we budget for fringe benefits in higher education and we remain open to that discussion,” he said.

The governor two years ago recommended that higher education fringe rates — which are mostly paid for out of the state budget through the comptroller’s office — be moved into the college system’s block grant. College officials opposed that change. (Read why here.)

While this situation lingers, costs continue to rise for the colleges.

This year 288 employees switched to the pension system, which required the university system to spend nearly $9 million, officials report.