March 2, 2012. Proposed $300 million one-time cut for SUS, Door open on tuition increases
The chambers are very close on issues related to Higher Education and hopefully will wrap up much of this soon. It is unlikely PECO will be considered at this level, but will be bumped to the full budget committees for likely consideration this weekend. In order for the Session to end on time (March 9th), at least for the purposes of passing a budget, the Conference process must end before midnight on Tuesday. This allows for the mandated “cooling off” period for legislator review before the final floor debates.
A couple of conference highpoints, thus far:
1. Western Governor’s University funding has been removed from Senate Offer #1 (although it remained in House Offer #1). It remains to be seen whether House Offer #2 will seek to reinstate it.
2. The SUS funding reduction has been lowered from the originally proposed cut of $400M to a cut of $300M.
*NOTE* The Higher Education Budget remains a work in progress. I’ll send another update following the next Higher Education Budget Conference Cmte meeting (anticipated to occur at 6 p.m., . Thursday, March 01, 2012.
State University System (SUS)
“As universities brace for huge cut, they’re on their own with tuition”
The Senate and House completed Round 3 of higher education budget negotiations tonight, and have agreed on many of the most nettlesome issues. Heading into Round 4 during an 8:30 a.m. meeting today, here’s what the two chambers have agreed on so far:
* A $300 million one-time cut from the general revenue funds of the state’s 11 universities. Although neither chamber has specified how those cuts will be spread across the system, the expectation is that universities would use reserve funds to cover the loss. It’s unclear if that means the cuts will be commensurate in size to each reserve fund, meaning some schools will take more of a cut than others. Sen. J.D. Alexander sold the idea by depicting those reserves as uncommitted savings accounts. But representatives from universities say while money in reserves may not be committed to a specific line item, they are used for routine expenses such as summer school and ongoing research funding included in faculty hiring packages. The Senate has suggested $400 million in cuts. The House had suggested $200 million that would recur every year. The House agreed to one-time cuts, and the Senate agreed to a lower amount.
* No tuition increase approved by state lawmakers. The House had recommended an 8 percent tuition hike in its original budget. Now it has conferred with the Senate’s plan for no “base” tuition hike, which could be spent on anything university administrators want to spend it on.
* Locally grown tuition increases of up to 15 percent. Both chambers agreed to leave it to universities to raise tuition to plug any holes left after the $300 million is taken out of the university system this year. Those hikes would need to be approved by each university’s board of trustees, and then get subsequently approved by the Florida Board of Governors. Essentially, lawmakers are forcing the schools to take the political heat for tuition hikes. Another rub: the Legislature’s budget factors in that the speculative 15 percent tuition hike, which assumes universities will seek the full amount. The 15 percent increase is allowed under a program called “tuition differential.” The money from this type of tuition hike is spent in a much more restricted fashion. By state law, 70 percent of the revenue must be spent on undergraduate instruction, and 30 percent has to go to financial aid. None of it can be spent for other purposes, such as graduate courses or infrastructure. In addition, many students have their tuitions locked in at a certain rate for all four years. So of the estimated $159 million the universities could raise if they all raised tuition to the max, about $45 million would go uncollected because of these locked-in rates.
FL College System (FCS)
Please find the Side-By-Sides for the Conference Budget and Conforming Bill Offers. These contain information from both Wednesday morning’s House Offer #1 and Wednesday evening’s Senate Offer #1 on budget. The House made the first budget offer and the Senate’s offer is a response. This Senate made the first offer on Conforming Bill issues and we have included those (see link below). The Conference Cmte was scheduled to meet again at 8:30 a.m. this morning (Thursday), but was cancelled. We will see the House’s response to Senate Offer #1 for both budget and Conforming Bill issues. I’ve included a copy of Senate Offer #1 for all of the areas the Higher Education Budget Subcommittees deal with, so that you can review, as interest and time allow, what has happened so far to some of our colleagues in other delivery systems.
Bullets from the attached budget Side-By-Side:
1.The two offers are very close.
2. No base reductions to the CCPF.
3. Full funding of Operating Costs of New Facilities at $7.3 million. [Lines 9 and 10]
4. House and Senate agree to fund FRS Normal Costs and to reduce investment plan allocation rates; however, the amounts are slightly different. The Senate offer includes an additional reduction of $3.1 million to rebalance contribution rates for the optional retirement plans. [Lines 11, 12, and 13]
5. House and Senate both provide additional funds to specific colleges; however, the amounts and colleges differ. [Lines 17 through 27]
6. House and Senate agree to a 5 percent tuition increase.
7. House and Senate agree to transfer CCLA and Distance Learning Consortium funding to the Florida Virtual Campus line item. [Lines 16, 32, and 44]
Pat Dix, J.D.
FEA Public Policy Advocacy
Florida Education Association
213 S. Adams Street
Tallahassee, FL 32301-1720
850-224-2078 Phone
850-224-9294 Fax