Community colleges will largely drain their reserves with no state bailout or union givebacks in sight

Kathleen Megan :: CT Mirror

Richard Balducci, chairman of the Board of Regents finance committee.

The governing board for the state’s largest public college system voted Thursday to nearly drain the emergency reserves at the community colleges in response to the budget crisis brought on by the pandemic.

This unprecedented move to draw the state’s community college reserves from $31 million down to $16 million – which is enough to cover only 3% of the system’s annual operating costs – was brought on by a 15% drop in enrollment, which in turn caused a drop in tuition revenue.

The Board of Regents also voted to use reserves because, they said, they have not landed any commitment for assistance from Gov. Ned Lamont, the General Assembly, or college employee unions.

“These are unique, and I said before, extraordinary times – and it’s going to take a unique and extraordinary action by this board to help bail us out” said Richard Balducci, chairman of the Connecticut State Colleges & University’s finance committee, shortly before the vote. “We’re short a bunch of money, as easily as I can say it. We have a fiduciary responsibility to the students and the faculty and to the staff.”

College officials said they recently received notice from union officials that they are willing to discuss ways the system can save money, but college leaders stressed that the unions are under no obligation to provide any givebacks. The Lamont administration has directed a total of  $16.4 million in federal funding to CSCU, but has made no commitment to help close the outstanding budget gap.

Lamont’s spokesman, Max Reiss, was non-committal Tuesday about whether the state would be able to provide any additional help.

“The financial impact of the COVID-19 pandemic is real and significant. Gov. Lamont is taking seriously the economic fallout, presenting a deficit mitigation plan for state operations earlier this month. The administration will continue to engage with all state agencies and institutions regarding their financial situations as a result of this pandemic,” Reiss said. “The conversations are ongoing, and we’re also working with our Congressional delegation regarding the need for additional relief from the federal government.”

Asked last week about addressing the colleges’ financial mess, Gov. Ned Lamont said the state’s share of federal relief funding came with strict requirements about how it can be used, which limits how much it can give CSCU.

“It’s worth remembering that the money we got from the federal government – the CARES Act, the COVID relief money – is specific to COVID-related expenses. So it’s not like I can just hand out that federal money for broader purposes like backing up our universities. That said, we have one of the great university systems in the country, so I’m gonna do what I can to provide what support I can,” Lamont said.

Ben Barnes, the college system’s budget chief, said the Lamont administration has continued to work with him to figure out how the system can tap into more of the federal funds, and he is hopeful more funding will be forthcoming.

The CSCU system as a whole – which includes both the dozen community colleges and four regional state universities – had a total deficit initially pegged at $69 million: broken down, that a $52.4 million deficit at the universities and a $16.4 million deficit at the community colleges.

In addition to its decision to raid the community college reserves, the board also voted Thursday to make $8 million in additional cuts at the state universities. The state universities have a reserve of about $100 million, which equates to roughly 14% of their annual operating budget.

There was a prolonged discussion during Thursday’s board of regents meeting about the impact of $8 million in cuts on faculty, staff and students of the four state universities. The central office is leaving decisions about how to make the bulk of the cuts to individual university leaders.

“Budgets are moral documents,” said Colena Sesanker, assistant professor of philosophy at Gateway Community College and an ex-officio member of the board. “They are not just about money. They’re about people. I think this budget is a failure morally for my current students, my future students and the people of Connecticut.”

But several board members said none of the options before them now are good: cut expenses, raid the reserves, or raise tuition.

Cutting some expenses, CSCU President Mark Ojakian said, makes it easier for the legislature to give money in the future since it shows a system trying to be nimble.

“I think this strengthens our hand,” he said. “They want to see how we are mitigating the impacts ourselves.”