With pandemic funds running out, CT higher education faces major cuts
Funds that kept Connecticut's higher education sector afloat during the COVID-19 pandemic are running out. How will that impact public colleges and universities, and their students, faculty and staff?
WSHU’s Ebong Udoma spoke with CT Mirror’s Keith M. Phaneuf to discuss his article written with Jessika Harkay, “CT higher education faces big cuts as pandemic funds disappear,” as part of the collaborative podcast Long Story Short.
WSHU: Hello, Keith. So you say Connecticut higher education is facing big cuts because the pandemic funding is running out. Wasn't this something that we should have anticipated?
KM: Absolutely. And it's a fair question. It's just a little more complicated than that. The worst of the pandemic is over in the sense of you know, our hospitals are not overflowing with patients. We have a vaccine now. But that doesn't mean the financial impacts of the pandemic are over for higher education. It also is important to remember that higher education was not necessarily on the most stable footing, even before the coronavirus arrived. So then when you take into account the fact that the public colleges and universities lost a lot of money when students left the campus, and many students have decided since then they just feel safer commuting, that had a big impact on them.
And a lot of the money that they received, not just in the form of federal pandemic grants that were passed along through the state to these public colleges and universities, but also a lot of the surplus money that we shared with higher education in the last few years has gone for ongoing expenses. And quite frankly, everybody knew it was going for ongoing expenses. It's not like the General Assembly and the governor's office wasn't told that this would be used to cover payroll and this would be used to cover benefits. It shouldn't come as any surprise to anyone that higher education was using this to meet their ongoing needs.
WSHU: Well, the governor says he's got to get the guardrails back in place, or else the surplus that we've been having over these years is shrinking. And pretty soon we will be back to a situation where we no longer have those huge surpluses, so we should get prepared for that. And he wants to put the guardrails back in place. What's wrong with doing that?
KM: I guess I am arguing both sides. There's nothing wrong with doing that, that's a very valid point. I want to make sure I use the right perspective here. State finances are still in the black. It's not that the state budget is running deficits. But the massive, almost ridiculous levels of surpluses we enjoyed in the last few years appear to be over. And I won't try to bore your listeners with tons of numbers.
But just to give you some idea, over the last 25 years before the recent boom, before 2018, we'd never had a surplus that was greater than 3.3% of the general fund. In 2022, we had a surplus equal to 21% of the general fund. I mean, we're talking in that case, $4.3 billion. And there is kind of nowhere to go but down from there. So the point I'm making here is that those huge surpluses are over, and it was from those huge surpluses that we drew a significant amount of the money we give to higher education.
So the governor is saying at this point, those big windfalls aren't there anymore. At this point if we are going to be channeling these big dollars into higher education, it's got to come from somewhere else. But I don't think anyone wants to rollback the tax cut that we just passed, I don't think anyone wants to take money from health care or K-12 education or transportation. So the question is, you know, where does the money come from?
WSHU: Does it come from the students paying more, is that what's going to happen? That tuition will go up and other expenses will go up for higher education in Connecticut?
KM: I think unfortunately, some of it is absolutely going to come from the students. The Board of Regents for Higher Education, which oversees the regional state universities and the community colleges has already raised tuition at the community colleges, and they have a deficit mitigation plan that will be coming out later this week that will probably look at ways to trim faculty. It may not be through layoffs, it may be through attrition. But as you trim faculty that'll have an effect on course offerings, the number of sections that you offer. The University of Connecticut's Board of Trustees is expected to vote in December on a plan they've already put out and they've begun sharing with students to raise room and board fees. So in answer to your question, yes, absolutely. The students will be paying more both in their bills and probably in terms of the course offerings that they get.
WSHU: But Jeffrey Beckham, the state's budget director, is arguing that they can actually trim their costs and not shift the burden to students. Is that something that's practical?
KM: I think there's some degree of practicality to it. I would also say in regard to Secretary Beckham’s statements, I think it can be more complicated than that enrollment has gone down. And not at the University of Connecticut, they had a dip during the pandemic, but they've already recovered that and they're above pre-pandemic levels. The community colleges probably have lost the most enrollment, followed by the regional state universities, and they have not fully recovered.
But keep in mind, we have a debt-free community college program where the state of Connecticut has been allocating money every year to try to help students graduate from community college debt-free. That system hinges a lot though, on the number of students you have, and the number of federal Pell Grants those students can secure, that also sort of goes into the pot of money that makes the debt-free system work. So in other words, as you lose students, you then weaken your finances, and you run the risk of it snowballing and losing more students. So rather than when you're losing students, sort of embracing it, accepting it and cutting your expenses. Other people argue no, if anything that's a sign the state needs to invest more to try to turn the numbers the other way, if that makes sense.
WSHU: Now we have a budget adjustment coming up next year. Is there any chance that we will have more state funding to the state university system?
KM: So of course, I can't say anything for certain, but I would say right now it's going to be an uphill climb because we do have, you've referred to our guardrails. One of our guardrails is a very stringent spending cap, there's very little room under the cap. In roughly a $26 billion preliminary budget for the coming fiscal year there's only $12 million of cap room and that's a fraction of a fraction of 1% of that budget. And as you pointed out, we have the opportunity to adjust that before it takes effect in July. It's smushed right up against the glass, there's no room to move. And unfortunately, higher ed is not the only constituency with significant need.
I'm sure there's going to be a lot of advocates seeking more funding for elder care, not just for nursing homes, there's going to be more people seeking money for social services, particularly the nonprofit's that deliver the bulk of social services in the state. I expect a really heavy push for more money for early childhood development. Those are all valuable public services, and they're all going to have loud voices. Unless the governor is inclined to be flexible on the spending cap, to date he has not given much ground in that area, it's going to be very difficult for higher education just to hold on to what it's supposed to get in the original budget for 2024-25. And that calls for a cut.
WSHU: So basically high ed has a fight on its hands to try and preserve it spending next year.
KM: But they have their own allies too. They have a group of supporters, so nothing is certain yet.