Archive for Sunday, December 9, 2001

Current state budget structure leaves university short of funds in its quest for excellence

December 9, 2001


Kansas University administrators often tout their goal of being among the top 25 U.S. universities.

They also laud the university's low tuition rates, which have helped KU land "best buy" rankings from such publications as U.S. News & World Report and the "Fiske Guide to Colleges."

But KU can't have it both ways.

Administrators say the university has come to a crossroads. If it doesn't increase funding now, the value of a KU education will begin to slip.

So, faced with mounting funding requests and a stagnant state budget, administrators have started talks that could result in the largest tuition increase in university history.

"Really, what tuition is is an investment in your future," Chancellor Robert Hemenway said. "The question is how much return you get on your investment."

The Kansas Board of Regents has asked all state universities to consider their five-year funding plans and present them to the regents this spring.

On Nov. 28, Provost David Shulenburger began a series of meetings with students, faculty and staff to explain the budget situation. It's part of a campus dialogue he said would shape the proposal Hemenway will make to the Kansas Board of Regents in April.

A tuition increase could begin to be phased in next fall, with the full impact in place by 2006.

"We're early enough in the process we can get some feedback on this," said Janet Murguia, executive vice chancellor for university relations. "We can have proposals other than what we put out there."

'Poorly funded'

Becoming a top-25 university means KU will have to be funded as well as the competition, Shulenburger said. That's not happening under the current structure.

In the mid-1970s, the Kansas Board of Regents selected five universities as "peer institutions" for KU. Those universities the universities of Oregon, Iowa, Colorado, North Carolina and Oklahoma still are used for comparisons today.

Twenty-five years ago, when the peers were selected, KU funding was about 90 cents for every dollar the other institutions received. Over time, the KU rate has slipped to 80 cents.

In real dollars, that means KU needs $50 million more per year to be funded at the average level of its peer institutions.

"It would be nice if we had the funding from the state so we didn't have to consider this" tuition increase, Shulenburger said. "We're used to having very low tuition, and I'm afraid that's going to end. We've been known as being very cheap."

More tuition money would be used for services "above and beyond" what KU currently offers, Shulenburger said.

The list includes:

Increased pay for faculty, staff and student workers.

Expanded computer network capacity.

An online enrollment system.

Improving library services, including remote access to electronic resources.

Improving computers and laboratory equipment.

All are areas that could improve KU's quality of education and its place in national rankings, Hemenway said.

"There are a lot of things that would make KU a better university included on that list," he said of the wish list.

Sources of money

Public universities receive their funding from four sources state taxes, tuition, private gifts and research grants.

State funding per KU student dropped to $5,802 in 2000 from $6,469 in 1985. Meanwhile, the amount contributed by the Kansas University Endowment Association has more than doubled, to $72 million in 2000. Research funding has more than tripled to $193 million in 2000.

Increased funding from the state seems unlikely during the coming legislative session. Gov. Bill Graves has said the state is facing a budget deficit of as much as $300 million, and his budget director has recommended no increase in higher education funding.

That's a big factor leading KU officials as well as officials at Kansas State University and other regents universities to consider raising tuition.

Before the 2001 legislative session, a tuition increase wouldn't have benefited individual universities. But a new law gives "tuition ownership" to universities money raised by a university stays at the university, without reducing funds from the state as it would have in the past.

Low rates

Again, Shulenburger points to the competition when he says KU has room to increase tuition.

In 1978, KU's tuition and fees for resident students were slightly higher than the average of its peers selected by the Board of Regents. By 1999, its tuition and fees had fallen to 86.9 percent of its peers.

Undergraduate tuition at KU for a Kansas resident is $77.75 per credit hour. An average student who takes 15 credit hours per semester pays $2,884 per year in tuition and fees.

Out of the peer group, only the University of Oklahoma at $2,713 per year has lower tuition.

KU's in-state tuition ranks eighth of the 11 public universities in the Big 12 for resident tuition and fees. Only Kansas State, Oklahoma and Oklahoma State are less expensive.

And only the University of Arizona and the University of Florida are less expensive for residents among the 34 public schools in the Association of American Universities, an organization of institutions that put an emphasis on research.

"They all show the same picture," Shulenburger said of the comparisons. "We want people to see this through whatever lens they want."

The 'scenarios'

The question, Shulenburger said, becomes this: "Are we prepared to engage in some self-help, and how much are we willing to engage in self-help?"

He's outlined several "scenarios" he insists they're not proposals that would cut the deficit or match funding of KU's peers by fall 2006. Each scenario includes an additional 20 percent for financial aid that officials say would help KU remain competitive.

Matching the average budget of KU's peers would require $50 million more per year, plus $10 million for financial aid. That translates into $96 more per credit hour at KU. Resident students would pay $5,213 per year for tuition by 2006.

Matching operating expenses and staff salaries but not faculty salaries would take $76 more per credit hour, plus $8 million in financial aid. Annual tuition would cost $4,613.

Shulenburger said this option would apply if the Legislature follows through with its 1999 pledge to fund faculty salaries at peer levels.

Eliminating half the deficit from peer universities would require an additional $25 million, plus $5 million in financial aid. Resident tuition would increase $48 per credit hour to $3,773 per year.

The increases could be phased in between fall 2002 and fall 2006, or freshmen could pay higher amounts more quickly. Other options include charging more for upper-division courses or charging more for higher-cost schools such as engineering and business.

If tuition froze at other AAU universities, KU would rank in the top half of the 34 universities under all three of Shulenburger's tuition scenarios.

But tuition at other schools won't remain the same. Some big increases are in the works.

Iowa State University will increase its tuition by 19.4 percent next year. New students at Texas A&M; University would pay about 25 percent more, under a current proposal.

In addition to the increases that would put KU in line with its peers, Shulenburger expects KU to continue its average 5 percent tuition increase in coming years to keep up with the competition's increases.

"We have to make up the difference relative to peers," he said. "Because the peers are going up over time, there has to be the same maintenance increase" at KU.

Campus concern

Though Shulenburger asserts he's just beginning to gather feedback on a possible tuition increase, KU's process already has some critics.

Mohamed El-Hodiri, an economics professor and member of SenEx, the advisory committee on internal university issues, said the KU administration was assuming tuition is the only way to increase funding. An approach from a variety of funding sources, he said, would keep students from paying as much.

He said the university should put as much pressure on legislators as possible for more money.

"On a moral ground, it shouldn't be the students paying the whole cost," he said. "As a teacher, I want to know what students I'm going to lose if we raise tuition this much."

Tom Beisecker, president of University Council and associate professor of communication studies, said that while the tuition plan included five years, plans for increasing state funding are more short-sighted. He agreed that hopes seem dim for more money from the next Legislative session, which begins in January.

"I don't know that the 2005 or 2006 session is still going to be that difficult," he said. "My concern is we're not looking at a plan for anticipated state support over five years. I'd like to see those run simultaneously."

Forgetting students?

Beisecker said he's reserving judgment on the administration's process for handling public involvement for tuition increases.

"As long as these are not proposals and just illustrations, then the process has yet to begin," he said. "And that's the important thing. ... If the process becomes just a process of how to increase tuition without a process of how to increase funding from other sources, then I'm not going to be happy with it."

The administration's process has been the main concern of Justin Mills, KU's student body president. He said administrators should have included students in developing a plan for discussing the tuition increase.

Because Hemenway will first discuss the proposals with the Board of Regents at its January meeting and students soon will be leaving for winter break, Mills said he feared students would be left out of the conversation.

"He (Shulenburger) said it's a beginning, but a lot of people feel it's the ending," Mills said. "Once they get to that meeting, they could be locked into those proposals.

"In my opinion, it affects a lot of different people. If you're raising tuition, you're going to price some students out of an education."

Mills, however, blamed the Legislature for putting the administration in this position with low funding. He's planning to step up his lobbying efforts this session in Topeka.

"Is this a state-sponsored institution, or is it an actual state institution?" he asked.

Regents goals

Clay Blair, chairman of the Kansas Board of Regents, said the January meeting would simply be a first step in the decision-making process.

He said he didn't know if regents would approve the largest increases being discussed by KU; they hoped to listen to several proposals.

That applies to other regents universities, too. Kansas State is presenting similar information to its students, with an increase of $1,636 per year for an average resident student required to meet the average funding of its peers.

Though Shulenburger said he thought the net increases at KU and Kansas State would be similar, Blair said he would be surprised if the two universities' increases were put in place in the same manner.

"We have to think about the economic climate, the people who are paying the tuition," he said. "The one thing the regents are focused on first is the quality issue."

And that means KU will need to show how the money will be used to reach its goal of a top 25 university, he said.

"If the money was going basically to absorb operating expenses, I don't know that the board's interested in that," he said. "We want to make an ordinary university extraordinary. If the state isn't going to step up, we don't want to compromise."

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