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State Funding is drying up for universities

Feb. 3, 2011

By James O'Malley

Lately, American economists have been predicting an end to the recession, but many state universities in Ohio, including Cleveland State University, are just beginning to feel the strain of the tumultuous economy.

The State Share of Instruction (SSI) subsidy and student instructional fees primarily fund CSU’s operating budget. The SSI makes up nearly 35 percent of the Operating Budget and is funded with 86 percent coming from state revenue sources and 14 percent from federal stimulus funds that end in fiscal year 2012. This, coupled with a looming state deficit exceeding $8 billion, is cause for concern for those working in education. In fact, many are predicting cuts in SSI near 22 percent, meaning that CSU could stand to lose about 7 percent of its overall funding for the operating budget.

“The estimate (for fiscal year 2012) is $57 million, compared to the approved fiscal year 2011 SSI allocation for CSU of $73 million,” said Timothy Long, the director of the Office of Budget and Financial Analysis at CSU. At the Office of Budget and Financial Analysis, Long and colleagues develop extensive budget proposals to be approved by CSU’s board of trustees for implementation. The implication of this loss in state funding is certainly on their minds as they work toward a plan for FY 2012. “This is a significant loss in revenue.”

The reason Ohio schools were unaffected by the state deficit last year is because of the state’s decision to defer a portion of fiscal year 2010 SSI funding into FY 2011. For CSU, the deferral was about $3.5 million. Meaning at $74.3 million, the SSI funding for FY 2011 was over $1 million more than in FY 2010.

The student instructional fee, known more commonly to students as tuition, makes up for about 60 percent of the Operating Budget. In recent years it has accounted for more of the overall Operating Budget due to higher tuition rates in all studies. In fact, despite the $1 million rise in SSI in FY 2011, it accounted for 3 percent less than in FY 2010 operating budget.

Though undergraduate tuition rates saw no rise from FY 2007-2009, they have seen annual increases near the state cap of 3.5 percent since FY 2010.
This 3.5 percent cap may see a rise when Governor Kasich presents his Executive Budget to the State Legislature on March 15.

“Once we evaluate the Governor's budget proposal, we'll be in a better position to plan the University's course with respect to a tuition increase. However, it is likely that an undergraduate tuition increase will be effective in the Fall 2011 Semester,” said Long. It should be noted however that there are currently no plans to raise tuition for undergraduates.

The current 3.5 percent cap refers only to the amount a school can raise tuition per credit hour for their instructional fees for undergraduates. It does not pertain to tuition rates for graduate or law students, which both saw large increases in recent years at CSU, nor does it apply to certain other fees included in undergraduate tuition.

Increases of $7.50 and $0.25 per credit hour for undergraduates in general and tech fees, respectively, were implemented in the Fall 2010 semester and account for a total increase in tuition of 5.05 percent, or $414 per academic year. The reason for the increase in the general fee is to pay for construction debt service for the Student Center.

If recent trends are any indication, to cover the costs of a depleted share of SSI, CSU may decide to once again raise tuition rates across the board. CSU has also not yet ruled out the possibility of layoffs. However, no formal budget proposal for 2012 has yet been submitted to the CSU Board of Trustees and until Kasich’s Executive Budget is submitted, educators across the state are waiting with bated breath.