USNH Presents Budget Proposal for the 2008-09 Biennium at Governor's Budget Hearings

November 17, 2006 - Concord – Officials from the University System of New Hampshire presented a proposed budget for the FY08-09 biennium during the Governor's budget hearings today that holds tuition increases over the biennium to 4.5 percent each year and expands need-based financial aid substantially above that rate. The proposed budget, which was approved by the USNH Board of Trustees after detailed review and analysis, is based on a request for a 7.6 percent increase in general funds for each year of the biennium.

Under the proposed budget, the State is being asked to provide13.8 percent of the total revenue to meet the operating costs of the University System during the FY08-09 biennium and to support key priorities of the Board. Those include increasing need-based financial aid to New Hampshire citizens, expanding access to higher education in the state through collaborations with the community technical college system, and maintaining quality educational programs that prepare graduates for good employment, meaningful lives, and effective citizenship. In dollar terms, the increases for the two years of the biennium would be $7 million in FY08 and $7.5 million in FY09.

The significant drivers of the appropriation request are the need to:

maintain affordability of tuition,
provide adequate financial aid for all New Hampshire residents,
invest in proper operation and maintenance of USNH facilities,
address substantial increases in the costs of medical benefits, and
provide fair compensation to employees.

“USNH has demonstrated its capacity and willingness to engage in a wide spectrum of initiatives that provide substantial benefit," said Ed MacKay, vice chancellor and treasurer of USNH, in his testimony at the budget hearing. “We ask your support to continue that shared commitment to improving the lives of New Hampshire residents and promoting the long-term economic and social vitality of the State.”

While the University System is a partner with the State, it utilizes other revenue sources to support programs and services that make significant contributions to the New Hampshire economy. In addition to the approximately $410 million in Education & General revenue and expenses derived primarily from tuition and the State appropriation, USNH annually generates more than $160 million from auxiliary (fully self-supporting) operations such as residence halls, dining facilities, student activity and recreation centers and nearly $120 million more from sponsored programs (primarily grants from the federal government) and private gifts.

“This modest proposal comes as a result of a rigorous process that does not simply ask the State to fund all our needs,” MacKay said.

The USNH, like other large organizations, must address ongoing financial challenges to maintain its facilities, provide benefits to its employees, and factor in increasing energy costs, among others. The University System and the Board have pursued aggressive cost saving strategies to help mitigate the full impact of these increases. For example, the annual USNH cost of medical benefits has increased from $20 million to nearly $43 million in this decade (11.5% annual average) and USNH employee contributions to a typical HMO family plan have increased from roughly $200 to more than $2,500 annually over the same time period. Despite several cost savings strategies that have been put in place, USNH expects to face an estimated $5 million increase in health care costs alone in each year of the next biennium.

USNH Board Chair Andrew Lietz, Chancellor Stephen Reno, and the presidents from all four USNH institutions participated in the hearings with Vice Chancellor MacKay. Testimony from Chancellor Reno and Vice Chancellor MacKay is available for review.

About the University System of New Hampshire:

The mission of the University System of New Hampshire (USNH) is to serve the higher educational needs of the people of New Hampshire. Through its institutions (University of New Hampshire, Plymouth State University, Keene State College, and Granite State College), USNH presently serves almost 30,000 students in classrooms and online, and has a strong community presence in every county in the state.

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