Spending Wisely: Colleges must do more with less
Universities must begin to use their cost data to make spending smarter, or they won't be able to deliver the same quality of education in today's increasingly unforgiving economic climate, according to a new report by the Delta Cost Project.
"Trends in College Spending" states that university expenditures historically have been opaque to the public, and even to some policymakers and cautions that this could lead to business troubles as the recession deepens.
"We can't allow the funding crisis to justify rollbacks in access or quality," the report says.
It's not hard to see why smart spending is necessary: Texas Comptroller Susan Combs announced on Monday that the state budget for 2010 to 2011 will be $9 billion less than last year. Though Texas has held steadier than other states during the recent economic meltdown, an estimated 111,000 jobs are likely to be lost this year as well.
Locally, the University of Texas at Brownsville and Texas Southmost College already walks a budgetary tightrope. Unlike private colleges with hefty endowments, UTB-TSC relies primarily on tuition income and state appropriations, rather than gifts, to foot its bills.
"At UTB we are very much aware that our students have a limitation on the number of dollars they are able to pay," said Rosemary Martinez, the vice president of business affairs at UTB-TSC. For this reason, the university keeps tuition close to the lowest level in the state.
UTB-TSC has historically had to ensure that every dollar is leveraged effectively.
According to David Oliveira, chairman of the TSC Board of Trustees, the partnership, between what were once two independent institutions, is one way the school has managed to get 7 cents from every nickel. Twin schools with two presidents, two sets of vice presidents, two registrars, etc. merged into a larger institution, consolidating resources.
"We certainly have learned to live without for a long time," Oliveira said, as he commented on the cloudy economic forecast. "But at the end of the day, there's so much we still need."
In 2004, the school asked and Brownsville taxpayers approved $68 million in bonds to fund a decade of campus projects. Oliveira says this isn't a tactic that UTB-TSC is likely to try for sometime.
"The last thing we'd want to do is impose any hardships on our constituents during this difficult time," he said.
There are a couple of bright spots on the school's financial horizon, according to Martinez.
For one, Pell Grants, which provide tuition for needy students, have been increasing in the past couple of years.
The majority of UTB-TSC students rely on help from these grants to pay for college.
What's more, President-elect Barack Obama has included a $15.6 billion boost to Pell Grants in his proposed economic stimulus package. This spending would increase the amount of money given to students by $500, from $4,850 to $5,350.
Additionally, the stimulus package includes $39 billion allocated to aid in replenishing money that has been cut from critical education programs.
Such funding could shoulder some of the anticipated burden universities like UTB-TSC are likely to face, as state appropriations face cutbacks. The boon to Pell Grants could also encourage more students to attend the university, improving the school's income from tuition.
Still, goals of scoring larger sums of money from state appropriations to fund new projects, like bringing a full-fledged medical school to the Rio Grande Valley, may be less realistic now that the state faces budgetary cut backs.
Rep. Rene Oliveira, D-Brownsville, said that while he hopes to fund many of the new projects UTB-TSC envisions, it is hard to comprehend the extent of the economic suffering ahead.
"Given these trying times, colleges and universities, like the rest of us, have to prioritize and learn to do more with less," he said.
