The University of Connecticut’s governing board Wednesday adopted a $1.53 billion spending plan that increases spending by 4% but puts off closing a gaping deficit of anywhere from $47 to $129 million caused by declining enrollment due to COVID-19.
UConn officials say that depending on how many fewer students don’t attend the state’s flagship public university this fall because of the pandemic, the budget hole could range from $47 million — if in-person classes partially resume as planned — up to $129 million if another wave of COVID-19 shuts down the campuses and classes must move entirely online.
Translation: between 3% to 8% of the UConn spending plan could have no revenue coming in to pay for it.
“We’re going to have to make difficult decisions” UConn President Thomas C. Katsouleas told his governing board.
The anticipated deficit figures take into account the university saving $1.8 million through furloughs and not providing scheduled pay raises to non-unionized staff. In future years, the university anticipates saving $10 million a year by ending four sports programs that 124 students currently participate in. Those sports are men’s cross country, tennis, swimming and diving and women’s rowing.
“There’s no doubt it’s a challenging time for the university. Before COVID-19, we were already faced with some budget challenges, but COVID-19 has caused us to face challenges no one could have ever imagined,” said Andy Bessette, chair of UConn’s Financial Affairs Committee.”
The deficit may grow even worse if state funding is cut. The budget UConn adopted for the fiscal year that begins next month assumes state funding will grow by at least $17.8 million — a 5% increase. That figure comes from the aid UConn was set to receive in the adopted state budget. But that was also before the pandemic shut down Connecticut, forced a huge amount of unanticipated spending and cut off a big chunk of the state’s anticipated revenue.
“It is far too early to know what will happen in the upcoming fiscal year during the global pandemic and we will continue to work with UConn to assist their continued and successful operations,” said Chris McClure, spokesman for Gov. Ned Lamont’s budget office, when asked whether the governor plans to use his executive authority to reduce state aid to the university.
UConn officials told the board that without any increased federal or state support to close the budget gaps, they must look to employment costs.
“When we think about what can we do to balance our budget, the only real leverage we have here is with our labor costs which make up most of the budget,” said Scott Jordan, UConn’s chief financial officer. “We will do everything we can to manage ourselves efficiently and to save money and to cut, where necessary; but we are waiting for state help and the state is waiting for federal help.”
A request to put off a scheduled 5.5% pay raise for professors and other unionized staff — a measure that is expected to cost the university $32 million — was rejected by union leaders. The average full-time faculty member at UConn earns $105,000 a year.
Michael Bailey, the executive director of the UConn chapter of the American Association of University Professors, said during an interview that his members have received no raises in six of the last 11 years and university officials need to find revenue or cuts elsewhere.
“Our message is explore other revenue and saving options first,” he said.
The university is able to control labor costs somewhat by not filling positions as people retire or by laying off staff not shielded by the no-layoff provision in the union contract. There are nearly 250 faculty not shielded by that provision and another union has nearly 700 workers who are not protected.
The university expects to have a better sense of how enrollment will impact its budget on July 1 when students have to commit to attending the university and put down a deposit. However, the full extent won’t be known until 10 days after the start of the school year in the fall when students’ bills are due.
The declines are largely expected to come from out-of-state students, who also pay more in tuition. While the number of international students attending UConn is expected to at least be cut in half, the number of in-state students is only expected to decrease by 5% at the most. The university said they are attempting to make up for the decline in international student enrollment by enrolling more students from other U.S. states.
For the purposes of better social distancing, the university intends to reduce the number of students living in on-campus housing by 20%, which could also deter some students from enrolling. UConn officials warned during the meeting that they may not be able to accommodate everyone who wants to live on campus.