Budget cuts mean ‘difficult couple of years’ ahead
For the four universities, estimates show savings of almost $5 million. For the community colleges, the level of savings is not yet certain, but it’s clear that the deficit will be smaller and community colleges will be asked to cut back less than $12.5 million.
It’s also clear that the universities, which had been expected to drawn down $7.5 million in reserves, will need much less with the $5 million savings in fringe benefits. A statement from the CSCU system said the savings in final fringe benefit rates are lower due to health benefit savings included in the recently-adopted state budget.
“It’s good news,” CSCU President Mark Ojakian said after the meeting. “It means we don’t have to cut quite as much, but we still have to cut. It’s going to be a very difficult couple of years, whenever you have to cut budgets especially when, first of all, you don’t have adequate reserves to begin with and secondly, this has been a cutting exercise year after year after year.”
“I like to characterize it as there’s not much meat on the bone.”
In order to deal with shrinking enrollment and cutbacks in state funding, the Regents are embarking on a plan to save money by merging all 12 colleges into a single statewide community college by 2023. The plan, which has not yet been approved by the system’s accrediting agency, is part of the CSCU’s Students First initiative, which aims to save money while also improving the student experience.
By 2021-22, the reserves will begin to gain strength, Ojakian said, with savings “that we attribute to our Students First initiative being realized.”
And by 2023-24, he said, projections indicate the system will be in a “very good position” financially.
“Assuming that we don’t get any more drastic budget cuts, assuming that enrollment stays stable or, we hope, increases, assuming that retention improves,” Ojakian said. “So there’s a lot of assumptions built in which we’re working very hard to makes sure we realize.”
In the meantime, the system will be establishing targets for reductions to personnel and other expenses at each campus and at the system office through the continuation of a hiring freeze and a plan to fill only critical positions.
“We’re going to have to take a look at attrition. We’re going to have to take a look at hiring … take a look at our other expenses,” Ojakian said. “I think we will be asking colleges and regions to take a look at some regional synergies they can develop and share services to save dollars … We’re going to be asking people to go back to vendors and say, can we renegotiate your contract for a better price?”
A statement from CSCU said the community colleges “will do everything possible to minimize the effect of any budget reductions, with a goal of no impact on students.”