CSU Budget Update, April 14, 2016
Colleagues and Students:
Spring is in the air. Trees begin to bud, summer plans begin to come into focus, and baseball — our national pastime — is again being played. (I think those of you who have seen the 2 snow days in 1 semester as a heavenly symbol that this is the Cubs’ year may be over-thinking the issue … or is that just me?) The inevitable “April tension” can also be felt as the semester moves inexorably toward its conclusion, students prepare for finals and/or graduation, procrastination comes home to roost, and we realize how the last few months have flown by since we gathered to start the semester with the MLK March. And to those of us temporarily inhabiting the Administration Building, nothing says spring like the passage onto the Governor’s desk of the General Assembly’s “long bill” that sets the State (and much of our University’s) budget for the coming year. Ah, spring … .
That’s right. This is a campus budget update. For the dozen or so of you who are now still reading, thanks for sticking with it.
Provost Miranda and Vice President for University Operations Johnson have worked hard with many of you on this year’s budget, and those of you who haven’t engaged in the process can review the current budget at www.president.colostate.edu/budget/. We plan on presenting this budget to our Board of Governors as usual at its May meeting and, following the Board’s edits and authorization of a final version, the new budget will take effect July 1. In the end, I’d give next year’s budget (as it stands now) a bit of a mixed grade. The General Assembly and the Governor managed to find ways to restore the anticipated cuts to higher education and that, in turn, allowed us to decrease internal reallocation and add a bit to our salary and benefit investments for faculty and administrative professionals (state classified salaries are set by the State of Colorado — and I’ll talk more about them in a moment). Of course, we could have eliminated the internal reallocation altogether with the changes in state funding, but our sense from your collective feedback was that investing a fractional percent of existing budgets in our people aligned with broad campus interests. There were shifts in the budget process this year, bringing in greater faculty and employee input. We were able to add to our tenured faculty ranks while continuing to make progress on salary equity, carefully working with the results of the Provost’s Committee on Salary Gender Equity and with the leadership of our Non-Tenure Track Faculty colleagues to continue to make strides toward better pay for these important members of our academic community. We’ve engaged the Faculty Council, Administrative Professional Council, and Classified Personnel Council in important discussions about affordable housing and living wage floors for our lowest-paid employees, and we expect those to bring action in coming budget cycles. State appropriations have allowed us to complete the funding needed for the long-awaited Chemistry addition, and its construction is coordinated with the new Biology Building. Residence hall, apartment, transportation, and parking improvements continue, along with key building re-vitalization efforts and on-going progress in building on our role as one of the most sustainable universities in the nation. And with plans firming up around the completion of the phase II Animal Science addition and the re-vitalization/addition to the Warner College of Natural Resources Building, our efforts to build a campus that will serve generations of future Rams begins to shift toward maintenance and infrastructure (always popular topics) as well as building research capacity.
I’ll insert a comment here on construction: We’re all tired of it. Ten years ago when we met with faculty, chairs, Deans, and students, one of the highest campus priorities was the need to upgrade the physical infrastructure. We are well on our way to attaining that goal, but the effort needed and the impact ought to remind us all of the importance of continuous renewal of our campus rather than a disruptive cyclical approach. And a quick note on fiscal impact of construction: Only 2% of CSU’s general fund expenditures support construction debt service (things like Biology, Eddy, Engineering II, and classroom renovations and additions). And let’s state again for the record: The stadium has zero impact on tuition, fees, or our general fund — it is funded 100% through philanthropy, sponsorships and user fees (ticket sales), including the recent $20 million gift to name Sonny Lubick Field.
This draft budget includes some key investments in student safety and support, along with more than $6 million in additional support for student financial aid, but it also doesn’t fund a number of worthy requests that were brought forward this year. Perhaps most disappointing: It does not include a salary increase for our state classified staff, as determined by the state. In light of this, we will cover the anticipated health-care cost and parking increases for our state classified employees this year to lessen the impact of a year without a salary increase.
In this year’s budget, outside of investments in financial aid, salaries, and mandatory costs, two-thirds of the remaining resources will be deployed in the academic colleges. I think we all ought to feel good about how we’ve protected these academic pass-through revenue streams. On top of this financial foundation rests the excellence that our recent successes in philanthropy have provided. With four consecutive years of record fund raising and record numbers of donors, philanthropic support has out-paced state support in our last 4 years, tripled in the last five years, and with our current $1B “State Your Purpose” campaign ahead of schedule and budget, we can look forward to its completion in 2020 on CSU’s 150th birthday as a keystone in the archway to CSU’s next 150 years, endowing new chairs, moving facilities from functional to inspirational, and assuring access through scholarships that are so crucial to our access mission.
But, speaking of access, as a Land Grant University, the pride in all of this progress must be mixed with disappointment that much of what we have been able to do comes from our students via their tuition rather than as a public investment. For next fall, the Board will be voting on tuition increases for resident undergraduates of 5 percent ($207.50); undergraduate non-residents of 4% ($500.20); and 3 percent for graduate students ($140.20 for residents, $343.70 for non-residents). We also anticipate student fee increases of around 3 percent. And here we ought to spend a little time because (as you’ve all heard me say before) the central challenge to American public higher education in our lifetimes is its shift from what was once considered a public good to what is now widely seen as an individual consumer commodity. For the eight years I’ve had the privilege of serving as your president, we’ve followed the same path: Use every possible opportunity to tell the story of why public investment in higher education is so vital as a state and national priority, and then manage our institution so that it will be healthy and ready for the next generation of students who set foot on the Oval and the faculty who will dedicate their careers to this special place well into our future no matter what may come our way. I believe that our University has and remains ready to rise to meet that challenge, and you can see that reflected in exceeding our enrollment goals, improving retention and graduation rates, improving student and alumni satisfaction rates, maintaining our emphasis on discovery as a research university, engaging even more successfully across the borders of campus — creating important new partnerships as close as Denver and as distant as every continent where CSU researchers are at work — in short, striving to demonstrate excellence in everything we do.
This last element is important because, in the face of increasing tuition, it is a very legitimate argument to suggest that we should dial back expenditures to minimize tuition increases. Expenditure control is, of course, always important, and I think the data through our Financial Accountability Reports are very clear: CSU has been paying close attention to expenditures, particularly with administrative expenditure rates well below those of our peer universities. The 2015 Accountability Report is online at http://accountability.colostate.edu/, and there’s a short summary of our tuition approach available at http://source.colostate.edu/2015-tuition-dollars-go/. Perhaps cogent, at least to my mind, in this discussion is how we deal with what I see as a fundamentally flawed assumption: that being a Land Grant University is only about access. Access is critical to our role and mission, but there is nothing in the writing of Lincoln, Morrill, Turner, or others that would, to my ear, argue they envisioned a second-tier set of universities. In fact, the opposite is true: They expected that the children of the working class should have access to a world-class education. For 100 years, since the birth of the American community (junior) college system around the time of WWI, there have been less expensive options for education, but a Land Grant University has always had the responsibility to deliver affordable access to an excellent, even exceptional, education. By law, this role and mission includes research and outreach (now known by its modern name of engagement). And for 146 years, that’s what Colorado Agricultural College, Colorado A&M, and Colorado State University have delivered.
TWe can and should have confidence that we are still delivering on this mission. The majority of Colorado’s public universities show up in the “top 50” in terms of tuition increases from 2004-2014. But just as one data point does not make a data set, that statistic does not tell the entire story. In the last half of that decade — the period hardest hit by the great recession — state support per student dropped 49.3% and was recovered nearly dollar for dollar by tuition increases (57.7%) such that the University received $209/student/year more at the end of that period than it did in 2009 — a 4% increase over 5 years. Despite these fiscal pressures, our tuition rates remain below the mean of national peers. And in the face of these tuition increases, we have maintained our same percentage of low income and first generation students by launching the Commitment to Colorado program that eliminated the impact of tuition and fee increases for Pell-eligible students. In fact, we’ve increased overall institutional support for financial aid by 600% in the last decade. Last year, 44% of our students graduated free of student loan debt; those who do have loan debt carry debt loads that are below peer averages, and our graduates’ default rates have bucked the national trend and declined, now resting at 2.8%.More than 90% of our recent graduates say they would choose CSU again. Although different from the days when I attended college (when Fortran was the hot new programming language) and the public paid for the first 85% of our educational costs, I think we are managing through extremely challenging times maintaining a balance between affordable access and quality — exactly as our historic role and mission would indicate.
What does all of this mean for the future and our path forward? To me, it means that we need to continue to navigate as we have: a constant eye on cost containment, relentlessly advocating on behalf of public higher education, maintaining our tuition position within the state and national marketplace while building on our enrollment gains by demonstrating great student outcomes, and maintaining our affordable access mission by constantly reassessing our financial aid infrastructure and using our philanthropic success to assure we never lose track of excellence. This navigation obviously requires balance, and balance means weighing and prioritizing options. That can only be done successfully in a transparent environment in which all voices are welcome and our discussions, while passionate, model the civility and respect we see too seldom in the broader society of today. I know many of you join me in my pride for how our campus has handled difficult discussions around race, gender, and priorities over the past year, and this pride gives me confidence we’ll be able to successfully balance and navigate going forward together, assuring the next 150 years hold as much promise for CSU as her first.
Have a great end to the semester, a safe summer, a wonderful graduation (if applicable), and I’ll look forward to seeing most of you back here next fall as the academic cycle begins anew with Convocation for our entering class of 2020.
Dr. Tony Frank