Looking around CSU’s campus, it does not look like the school is suffering from the downward economy.
Sculptures are popping up all around campus, a new building connecting the Chemistry and Anatomy/Zoology buildings was built, renovations at the Plant Sciences Building are near completion and the Lory Student Center will start a $4.5 million renovation this summer.
“It looks like we have money; we just revamped a lot of buildings on campus,” said Kevin Simkiss, a junior English major.
But even though the declining economy might not appear to be hurting CSU, state-funding cuts have shrunk the university’s budget, causing the school to make its own cuts in important areas.
Last year, Colorado reported a $380 million drop in revenues for the 2003 fiscal year, but current projections predict revenue will actually drop $550 million, according to the state’s Web site – www.colorado.gov.
According to documents obtained from the Office of Budget and Institutional Analysis at CSU, the state initially gave the university around $124 million for 2003, which was down $5.6 million from school expectations. But because state revenues slipped further, CSU was forced to cut an additional $8.5 million. State money going to CSU for 2003 is around $115 million, a 4 percent drop from the 2002 fiscal year.
The state’s revenue drop, and subsequent budget cuts, is due to the declining economy. America’s economy boomed in the 1990s due to growth in the technology and service sectors. But after growth in those sectors slowed down, spending and investments decreased. The decrease in spending cut into tax revenue, which is where the federal and state governments receive a portion of their money.
CSU’s tight budget
CSU’s smaller budget will impact almost everything on campus.
Keith Ickes, director of the Office of Budgets and Institutional Analysis at CSU, said 23 faculty positions will be eliminated after becoming vacant, and nine other people could be laid off. The 23 vacant positions could include teachers, while the nine layoffs are more likely to be support staff, Ickes said.
“When some faculty members leave, we won’t refill those positions,” Ickes said.
As for the layoffs, Ickes said, “no plans are finalized, but the current conditions do indicate we may be laying off some individuals at some point.”
Ickes said the layoffs would be a last resort.
“We do want to keep the layoffs to as small a number as possible,” he said.
Gerry Bomotti, vice president for administrative services, said the vacant faculty positions mean fewer upper division classes will be available for the 2003 semester.
Renovations, repairs and maintenance on CSU facilities will also be impacted by the smaller budget.
The new building connecting the Chemistry and Anatomy/Zoology buildings and renovations for the Plant Sciences Building came from previous budgets, so the current economic condition has no impact on those building’s completion.
But other planned renovations have been halted in response to the smaller budget. For the past eight to nine years, the state gave CSU around $18 million specifically for renovations, but in July, with the beginning of the 2003 fiscal year, CSU will only get $3 million.
Bomotti said the $3 million will be used primarily for basic maintenance and repairs, which doesn’t provide enough money to proceed with planned renovations on the Arts Center at the old Fort Collins High School, the Shepardson Building and the Forestry Building.
Bomotti said the Wagar Building best represents the current impact on renovations because the building is only partially done.
“When you go into the Wagar Building, you will notice the basement is all brand new and totally renovated,” Bomotti said, “but when you go upstairs it is hot and the rooms are old and out dated.”
Bomotti said the halt in renovations will slow down a 10-year plan to renovate most of CSU’s facilities and buildings.
“I’d say right now we have about two-thirds of what we wanted renovated,” Bomotti said. “In about three to four years, we probably would have been done. Now we are going to need more time.”
Other plans intended to improve student’s resources have also been halted. For example, plans to improve library resources, Internet connections and infrastructure throughout campus have been temporarily halted because CSU doesn’t have the money, Bomotti said
He said classroom renovations, new library resources and improved Internet infrastructures are “important because learning is improved when the quality of the classroom environment is improved.”
However, the cost for some campus improvements do not come out of CSU’s budget, so some renovations will proceed as planned.
The $4.5 million Lory Student Center renovation will be funded by bonds and paid back by the center’s profits, Ickes said.
The new sculptures come from a grant given by the state as part of the art-in-public places project, which comes from state tax dollars given by the state legislature. This money is not part of the CSU budget.
A new residence hall and renovations on existing halls are planned, but money for those are generated through the room and board fees students pay as a residents.
Working around the smaller budget
While money is a lot tighter these days, CSU has plans to work with the smaller budget.
After the state announced the initial budget cuts, and after more cuts were announced due to lower revenue projections, CSU administrators told each college dean to prepare the college’s budget for cuts at 2 percent, 4 percent and 6 percent.
“This allows the dean to figure out, ‘What would I do at each level of cuts?'” Ickes said. “‘At a 2 percent cut, I can do these things, but at 4 percent, I can’t.’ This allows them to make adjustments and be prepared.”
If the state continues to cut CSU’s budget, the university might put a cap on the amount of students allowed enrollment, Ickes said.
“At some point we might have to look at that question,” Ickes said. “As a land-grant institution, our goal is for maximum access. It would be tough for us to come to terms (with an enrollment cap) but if things don’t get better, that might be something we look at.”
The Governor’s Blue Panel on Higher Education is also trying to come up with solutions. One recent idea was to make in-state students who achieve more than 140 credits pay out-of-state tuition rates.
“It’s possible it could happen.” Ickes said. “But I think they will find it to be more trouble than it’s worth. They would have to build a database that would keep track of each student’s credits.”
Ickes said charging those students out-of-state tuition rates could free some money for Colorado colleges because the state would, in effect, stop subsidizing them. In-state students are partially subsidized because they, or their family, have paid taxes in the state.
The TABOR effect
TABOR, or the Taxpayers’ Bill of Rights, was an initiative passed by voters in 1992. TABOR limits the amount of money the state can raise and all state institutions, including CSU, must limit what money is generated from all sources, including tuition.
The limits set by TABOR are based on growth and inflation. Any money that exceeds the limit must be refunded to taxpayers unless a citizen initiative approves otherwise for a certain state funding need.
TABOR caps tuition increases and subsequent revenue that could be used to fund university priorities, like faculty and renovation needs.
Other state’s universities and colleges are facing tight budgets similar to CSU, but those schools can limit the impact of smaller budgets by raising tuition, something CSU cannot do under TABOR guidelines.
Ickes said TABOR is especially damaging during a down economy because it resets at a lower level.
Which means, “if the economy picks up quickly, all the extra revenue goes up and we cannot take advantage of that to repair the damage caused by poor economic times because the state would have to send out refunds,” Ickes said.
Bomotti said he expects the economy to improve soon.
“I think the question on everyone’s mind is when,” Bomotti said. “How quickly will the economy improve and has the state hit the bottom yet?”
Ron Phillips, chair of the economics department at CSU, said turning around the economy is just a matter of adjustment.
“We are in an era when where old fiscal policies don’t work,” Phillips said. “Lots of things have changed in the tech sector and Washington needs to recognize these things and change past policies to better fit the new economic times.”
Although adjustment may be needed, Phillips says Colorado is doing well compared to other states.
“Colorado is a whole lot better off than many other states. The working conditions are great here and Colorado is on the technology forefront,” Philips said. “The economy is not under anyone’s absolute control, so it is hard to know how to fix it. I don’t expect things to get worse; I do expect them to get better.”
The Denver Post reported that leading economists predict Colorado’s economy will improve this year through increased business spending, a recovery in tourism and a demand for resources that will add 22,300 new jobs.
But it will take time for CSU to feel any impact from an improved economy. So in the mean time, the university will have to cope with the smaller budget and hope the economy improves.
“We hope the downturn is short and that we will rebound soon,” Bomotti said. “Right now, we just have to acknowledge what we have to do.”