University of Hawaii officials want state taxpayers to help the 10-campus system pay its electric bills and unfunded federal mandates like the gender-equity dictates of Title IX that they project will cost more than $70 million over the next two years.
UH President David Lassner, Board of Regents Chair Randy Moore, interim Manoa Chancellor Robert Bley-Vroman and other officials presented their biennium budget request — $74 million in additional funding on the operating side, $400 million in capital improvements — to the House Higher Education Committee during an all-day informational briefing Thursday at the Capitol.
Gov. David Ige’s executive budget request is due next week. The 2015 legislative session convenes Jan. 21 and lawmakers will be hashing out the overall state budget bill over the following few months.
Rep. Isaac Choy, who chairs the Higher Education Committee, and several other representatives grilled university officials over various aspects of their budget request, often seeking assurances that whatever money the state contributes to UH’s overall budget will be well spent.
Paying for rising electricity bills has become a problem throughout the university system despite efforts to use less energy. Almost $51 million of the $74 million two-year operating budget request is for utility costs.
At the Manoa campus, Bley-Vroman said Hawaiian Electric Company rates have increased 44 percent in recent years, jumping to 27 cents from 19 cents per kilowatt-hour. Manoa is asking for $34 million over the biennium for utilities.
Moore said the long-term solution is to reduce electricity consumption by retrofitting buildings and putting solar systems in place.
UH Hilo Chancellor Douglas Straney described the idea of building a photovoltaic farm to make the campus self-sufficient, saving an estimated $4 million a year. It’s just a concept, but the goal is to develop it into a concrete plan and request state money to build it.
The university’s new budgeting approach is shrewd. Instead of asking for state help to fund a laundry list of programs and school services, officials chose to itemize fixed costs that are tough to argue against, although Choy did question their assumption that electric rates would continue going up.
Lassner explained that the university will finalize its overall budget this spring when it knows just how much money the state is going to provide. Then it will decide how much tuition should increase — it’s currently set to go up 7 percent — and what other moves may be necessary.
“We can’t adopt a budget for next year because we don’t know yet what you’re going to do,” he said.
The longtime problem for higher education officials — both at UH and throughout the country — is the lack of a stable funding source from the state. In Hawaii, the portion of state money that comprises UH’s budget has declined over the years.
In 2009, state appropriations made up 35 percent of UH Manoa’s overall $760.3 million budget and tuition covered 19 percent. In 2013, state money was down to 25 percent and tuition was up to 28 percent of the $841.1 million overall budget. The rest of the money comes from private gifts, auxiliary services and extramural sources, according to a UH budget presentation in October.
“This is a national problem. States across the country have disinvested in higher education,” Lassner said.
UH can’t continue to fund the deficits for the cancer center or its athletics department, he said, and it doesn’t want to raise fees or tuition to make up the difference, so the university needs help.
The Athletics Department budget deficit is projected to be $3.5 million this year. UH Manoa’s budget request for athletics is to cover the gender equity costs of about $1.7 and conference-mandated travel subsidies of almost $2 million, Bley-Vroman said.
Outgoing Athletics Director Ben Jay said the Mountain West and Big West conferences forced UH to pay $1.3 million and $650,000, respectively, as part of the deal for UH to join. School officials accepted it because they were desperate to get out of the Western Athletic Conference.
Jay said UH is the only institution in the country that has to pay travel fees to members of its own conference.
Pressured by Rep. Matt LoPresti for an explanation of the “raw deal” it seems UH is getting, Bley-Vroman said the travel subsidies UH pays the conferences will be something officials focus on the next time they’re negotiated.
“Athletics is very important to us … but it really is about Hawaii,” Bley-Vroman said. “It’s a state and community function.”
The chancellor said UH student athletes generally have higher grade-point averages than the rest of the student body — a positive change from the past that he attributed to new recruitment practices.
Lassner said the administration has determined it’s no longer possible for UH Manoa to continue to fund the Athletics Department deficits.
“We’re looking for ideas and solutions collaboratively,” he said.
Lawmakers took swipes at the UH budget in general and its funding maze, which Rep. Sam Kong characterized as “convoluted.”
Rep. Calvin Say asked Lassner what his broader vision is to educate the Legislature — which experiences relatively high turnover, especially on the House side — on the university’s needs.
“We all believe in the university system as the fourth engine in our economy … but every two years we’re going to forget,” said Say, the House speaker emeritus.
Lassner said he’d welcome regular informational briefings at the Capitol.
Choy was particularly concerned that seemingly every time the university fires someone a legal dispute develops, but Lassner told him that changing the employment contracts won’t alleviate the problem.
LoPresti, too, was frustrated that top executives receive “golden parachutes” when they are terminated.
“It seems like we’re incentivizing failure,” he said.
Choy asked Moore to make it an issue for the Board of Regents to at least discuss.
Rep. Takashi Ohno took school officials to task for coming to the Legislature with direct requests for funding Title IX mandates since the university has already been paying for these for years.
The university’s total biennium request just for Title IX programs and the Violence Against Women Act, another unfunded federal mandate, is over $10.4 million.
Asked by Rep. Kaniela Ing for some type of commitment that Title IX programs would not be cut, Bley-Vroman said it would be “completely idiotic as well as immoral” to do so.
On the capital improvement project side, the university is asking for almost $400 million over the next two years.
Deferred maintenance has been a primary concern, but the request won’t come close to turning things around.
The budget seeks just over $41 million in 2016 and almost $47 million in 2017 to address a wide range of maintenance problems plaguing campuses at Manoa, Hilo and the community colleges.
Lassner said if the university if doesn’t get at least $60 million to $80 million of work done every year, the deferred maintenance backlog will grow.
The university has a six-year plan to address the problem systemwide, although it’s expected to take 10 years at Manoa, the flagship campus.
Choy was pointed with his questions and criticisms of the university throughout the day and his concerns with the UH Office of Capital Improvements was no exception. He said there seems to be no ownership of the projects and the “entire process needs to change.”
Officials told him that they are in a transformation process that they hope to complete in the next two years.
“We’re playing with real money here,” Choy said.