University System of NH Presents Budget Proposal to the House Finance Committee that Focuses on Affordable Access to a College Education

March 5, 2007 - Concord – Affordable access and the key role the University System of New Hampshire (USNH) plays in economic and workforce development were the major themes outlined by representatives from USNH as they presented their proposed budget for the FY08-09 biennium to the House Finance Committee today. The budget, if adopted, would hold tuition increases over the biennium to 4.5 percent each year and expand need-based financial aid substantially above that rate.

The proposed budget was approved by the USNH Board of Trustees in the fall after detailed review and analysis, and was presented to the Governor during his budget hearings last November. It is based on a request for a 7.6 percent increase in general funds for each year of the biennium that would hold tuition increases at the 4.5 percent level. The Governor’s proposed budget calls for a 4.1 percent increase in FY08 and a 4.2 percent increase in FY09, leaving a gap of $10.1 million between the two.

The University System serves more than 30,000 degree-seeking students, another 20,000 students in non-credit and continuing programs, annually, awards a substantial percentage of the degrees conferred each year in the state, and has a nearly $1 billion-dollar impact on the NH economy.

“The importance of an affordable college education cannot be overstated, especially in today’s rapidly changing global economy. If our citizens are to succeed in this economy, they will need the right set of specialized skills, general knowledge, and an entrepreneurial spirit,” said Vice Chair of the USNH Board Ed Dupont.

USNH Chancellor Stephen Reno added that “the proposed Operating Budget will allow the University System to continue our vital operations as well as expand some key initiatives that we believe are timely and align directly with New Hampshire’s needs and priorities.”

Chancellor Reno cited four key initiatives supported by the USNH Board of Trustees:

Continuation and expansion of the “Affordable College Effort” (ACE), which helps low-income New Hampshire residents to enroll at a USNH institution without having to take out a loan to cover the direct costs of their attendance.

Expansion of access through collaboration with the NH Community/Technical College System through 2+2 arrangements between USNH and selected CCSNH campuses and through on-line delivery, as well as improving access to high-demand programs such as nursing, education, and business across the state.

Increased outreach to K-12 through the continued expansion of Project Mentor, which has raised the aspirations of hundreds of young people by pairing college students with middle school students who are at risk of dropping out.

Maintaining programs of quality which prepare graduates for good employment, meaningful lives, and effective citizenship.

“ Quality – especially in this competitive marketplace – must include the faculty we appoint, the laboratories our students and researchers use, our IT infrastructure, and the support services we provide,” Chancellor Reno said. “As the cost of doing our business increases, all of our institutions regularly conduct cost/benefit analyses and make adjustments. UNH, PSU, and KSC deliver their programs on a cost/student basis that is significantly below their peers.”

The Appropriation for the current biennium is 13.4% of current total USNH operating revenues, and the USNH budget request asks the Stateto fund 13.9% of total revenue during the FY08-09 biennium. The Governor’s recommendation would provide 13.2%, or a gap of $10.1 million. In dollar terms, the increases for the two years of the biennium in the USNH budget request 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 and target more aid to the most needy students,
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.”

To help illuminate the challenges USNH faces in terms of its budgeting process, MacKay cited the fact that despite plan design changes and aggressive pursuit of cost savings, the USNH employer medical plan costs have more than doubled in this decade, and projected to increase by more than $5 million per year in the coming biennium. USNH employee contribution to a typical HMO family medical plan increased from roughly $200 to more than $2,500 annually over last five years. “Despite greater employee contributions, these employer medical plan increases alone are more than the Governor’s proposed annual Appropriation increases of $3.75 million and $4 million per year,” he added.

The University System is a partner with the State, and seeks 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, the USNH annually generates more than $160 million from auxiliary (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. In the aggregate, these activities of USNH provide a direct infusion of $445 million in the state’s economy, and nearly $900 million when the indirect impact is conservatively estimated.

USNH Board Vice Chair Edward Dupont, Chancellor Stephen Reno, Vice Chancellor Ed MacKay and top officials from all four USNH institutions participated in the hearings with. Testimony from Chancellor Reno and Vice Chancellor MacKay is available for review.

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