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Archive for Wednesday, April 15, 2009

Budget temptation

The state should find a way to reserve at least a portion of its expected federal stimulus funds for university maintenance.

April 15, 2009

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Giving the Kansas Board of Regents more budget flexibility isn’t necessarily a bad idea, but it may tempt the board and the schools it oversees to spend too much of their federal stimulus money in unwise ways.

The state budget bill passed by the Kansas Legislature required the regents institutions to spend an expected $40 million in stimulus funds only on deferred maintenance projects. On Monday, Gov. Kathleen Sebelius used her line-item veto to remove that requirement. Both Sebelius and Regents Chair Donna Shank said the move would allow the regents to use the money both for deferred maintenance and to underwrite the plan to freeze in-state tuition at state universities for the 2009-2010 school year.

Let’s be clear. We are not in favor of raising tuition for the next academic year. Shank and Sebelius are correct in saying that now is not the time to impose that burden on Kansas students and their families.

However, allowing the regents this flexibility opens the possibility that too little of the stimulus money will be spent on maintenance projects and too much will be directed to ongoing expenses for which officials will have to find replacement funding after the stimulus money is gone.

One-time money, like the stimulus funding, is best spent on one-time expenses. The $40 million the regents are expected to receive represents a golden opportunity to address the growing list of deferred maintenance projects for which the state has been unable to find funding for many years. Spending that money on capital improvement projects will provide jobs and produce long-term energy and maintenance savings for state universities.

Diverting a portion of the stimulus money to temporarily cover ongoing expenses makes some sense if we assume that the economy and state revenues will have a steady recovery and produce money to pick up those expenses in future years. However, if too much of the money is used to fund operations and revenues don’t pick up, universities will be in an even bigger budget hole in years to come — and will have made hardly a dent in the maintenance needs.

The danger is that the increased budget flexibility supplied by the governor’s veto will make the regents and university officials less motivated to tighten their operational budgets. It’s just too easy to continue to put maintenance on hold and use the money to reduce the short-term pain of trimming other expenses.

Again, the tuition freeze is a good idea and provides a strong bargaining chip for the regents. Perhaps, when legislators return to Topeka later this month, they can establish some middle ground that would provide flexibility on university budgets but still require that a certain percentage of the stimulus money be used for maintenance projects.

Comments

davidsmom 5 years, 9 months ago

I think it should all go to deferred maintenance.

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