Burning money
Utah State University’s buildings are filled with warmth and light, but the accounting books are in the red because of it.
Thanks to rising fuel and power costs, USU is currently about $4.5 million over budget and administrators project the balance may be over $7 million by the end of the next school year.
Typically these bills are funded by the state Legislature, but for the past several years it has not allocated increased funds to match rising costs, although USU’s power and fuel consumption has remained steady.
“When economy went south during fiscal year 99-00, the money in the public sector dried up,” said Ron Godfrey, vice president for business and finance. “There weren’t as many tax dollars because people weren’t making as much money.”
Godfrey said USU has been essentially borrowing money from itself for the last three to four years to cover the bills. This is done by dipping into endowments and savings, Godfrey said, but the well is bound to dry up eventually.
“We’re getting down to the bare bones,” he said. “What has happened with the economy the way it’s been the last three years [is], any excess funds that were in there have been used because the state budget keeps dropping.”
The Associated Students of USU recently agreed to give $600,000 of Tier II tuition to go toward the fuel and power bill as well as faculty compensation. Godfrey said he would rather see that money come from the Legislature.
“I think we have to get this money from the state,” Godfrey said. “If we take it from the students, then the state is going to say ‘well, you solved the problem, just keep taking it from the students.'”
Most public universities and colleges in Utah are facing the same problem of fuel and power deficits.
Two weeks ago the Higher Education Subcommittee unexpectedly passed a resolution that would require Utah universities to use their research funds, Tier II tuition and graduate tuition to cover the deficit as well as operational and enrollment growth costs.
“Now all of a sudden, we have to pay everything ourselves,” Godfrey said. “There was wide-spread panic.”
Godfrey said this was not a good solution since USU had no research dollars not already allocated and administrators had already made commitments to the student government on how Tier II funds would be spent. Also, Tier II tuition funds are traditionally controlled by individual universities.
“If you tie a leader’s hands, he’s lost the ability to lead,” Godfrey said.
University officials statewide were unhappy with the resolution, and on Feb. 16 administrators and students from USU and other universities appealed to the subcommittee. Commissioner of Higher Education Richard Kendell pleaded on behalf of the university presidents’ autonomy.
In a unanimous vote, the subcommittee decided to award presidents “full flexibility” in how the funds could be used.
In the meantime, the deficit is still there and power and fuel rates are still increasing, Godfrey said.
“It’s put us in a real bind,” Godfrey said. “We can’t shop for power, we’re landlocked in Logan City.”
Godfrey said USU will have to keep borrowing for another year.
“We will live to fight another day,” he said.
-heidithue@cc.usu.edu