West

Alaska has confronted a monumentally difficult fiscal climate marked by persistent declines in oil revenue which historically represent the majority of the state’s unrestricted general funds. Since FY12, UGF revenues have dropped nearly 80 percent from $9.5 billion to just $2.0 billion in FY20. As a consequence, the University of Alaska experienced a $51 million (14 percent) reduction in its state operating appropriation between FY14-FY19. Last year, the Governor and the Board of Regents negotiated a 3-year (FY20-22) compact agreement to reduce UA’s budget by an additional $70 million (21 percent), for a cumulative $121 million (34 percent) reduction since FY14.

Even prior to the coronavirus pandemic, the state faced a $300 million revenue decline and $1.5 billion budget deficit coming into the FY21 budget cycle. The regular 90-day session (January – April) was cut short due to COVID-19 transmission concerns within the close quarters of the State Capitol. Prior to their early adjournment, the legislature finalized a FY21 budget that actually increased UA’s operating appropriation by $12.5 million (4.3 percent) above the level approved in the compact between the governor and the board. The governor removed that incremental funding by line-item veto. In his justification, the governor indicated that federal higher-education funding was anticipated via the CARES Act. UA anticipates it will ultimately receive approximately $12.2 million in total CARES funding. The FY22 state budget process won’t begin until December, but early indications are that the governor will request a $20 million UGF operating reduction for UA, consistent with the levels agreed to in the 3-year budget compact, and at present does not reflect any additional COVID related reduction.

The state’s severe fiscal situation has resulted in almost no state funding to the university for assistance with addressing UA’s $1.2 billion deferred maintenance and facilities renewal & repurposing backlog. Since FY16, the state has only appropriated $18 million in capital funds to UA and in the FY21 budget cycle, no capital funds were appropriated.

The state does not make annual appropriations specifically for university research or for other institutional purposes outside of the annual operating appropriation.

The university receives an annual appropriation to deliver career and technical training as a participant in the state’s Technical Vocational Education Program. The program is funded through unemployment insurance pay-roll deductions which fluctuate annually with the state’s economy. COVID related reductions in state employment and wages, combined with higher unemployment insurance payouts, will reduce UA’s program funding by 12.5 percent in FY21, and likely a larger amount in FY22.

The state separately funds two higher-education aid programs – a merit based scholarship and a need-based financial assistance program. In addition, the state annually funds the state’s participation in the WWAMI medical school. Annual funding for all three programs have remained consistent over the last several years at approximately$12 million, $6 million and $3.2 million respectively. COVID is not expected to impact support for these three budget items.

Updated 07/30/20

State revenues in Arizona for FY 2020 and FY 2021 are above forecast. The three public universities were reduced $35 million in aggregate in FY 2021. The Governor’s FY 2022 budget recommendation proposes $35 million for the three public universities for workforce development. The universities requested a total of $160 million for FY 2022 to fund new economy workforce development ($100 million), financial aid ($50 million), and statewide program sites ($10 million). The legislature has taken no actions on state budgets, to date.

Enrollment changes and limited on-campus students as well as increased pandemic costs resulted in significant resource shortfalls. Federal CARES Act funding provides some financial stability but will not fully cover shortfalls.

Updated 02/09/21

This response reflects the impact to the California State University system only, and is not meant to be inclusive of the University of California, the California Community Colleges or the California Student Aid Commission. However, all four are included in the $1.35 billion total ongoing budget reduction below.

Facing a $54.3 billion budget deficit for the 2020-21 fiscal year, the state of California made net- reductions to higher education general fund allocations of nearly $1.35 billion. The California State University budget is made up of three primary sources: state general fund allocations; tuition; and student fee revenue. The CSU general fund allocation was reduced by a net amount of $299 million in the final budget agreement for the 2020-21 fiscal year. Additionally, tuition revenue is expected to be lower than 2019-20 by at least $25 million due to changes in enrollment patterns across the system, unrelated to COVID-19. The loss of tuition and fee revenue due to COVID-19 is not yet known, but expectations are that non-resident and international student enrollment could be down by at least one-third, and resident enrollment patterns are not yet fully understood by campuses.

The final budget agreement indicates that these general fund reductions were a combination of increases planned in the governor’s January budget proposal and reductions required to balance the state budget as a result of COVID-19 impacts. If the federal government provides sufficient funds to states by October 15, 2020 – and if those funds are eligible to be allocated to universities, the CSU could receive one-time state general fund dollars up to $498.1 million which would amount to a net increase of $199 million for 2020-21. However, the $299 million reduction is considered a permanent base budget reduction, and any amount of the federal stimulus funding would be one-time in nature. Similar language impacts all the systems of higher education in California, and other state agencies as well. The state of California and the CSU are working under the assumption that the economic impact of COVID-19 will affect budgets for the next 3-4 years.

Updated 07/29/20

In the wake of the COVID-19 pandemic, the Colorado legislature addressed a state budget shortfall last spring of $3.5 billion, which represents a shortfall of around 25 percent. In the FY 2020-21 state budget, state funding for public higher education operating budgets was reduced $493 million, or 58 percent from FY 2019- 20. The reduction was preceded in May by Governor Jared Polis’ allocation of $450 million in CARES Act funding to public higher education institutions to facilitate compliance with COVID-19-related public health measures and provide economic support for the state through educating students. Further, the legislature needed to eliminate a large amount of higher education capital funding that had been in the original budget. The legislature was able to allocate a relatively modest amount of funding for higher education controlled maintenance and capital renewal projects, as well as create a financing program to fund a few higher education capital projects.

The Governor’s budget request for FY 2021-22 submitted to the legislature on November 2, 2020, restores state funding for public institutions’ operating budgets to its FY 2019-20 level, the funding level before the 58 percent reduction in FY 2020-21. The Governor’s request did not provide any state funding for higher education capital projects. The legislature has not made any decisions regarding higher education funding. Although recent state revenue forecasts have improved, the State of Colorado continues to face a structural deficit in its budget due to COVID-19’s impacts on the state economy and state programs and services. It remains to be seen how much funding the legislature will allocate to higher education when it makes its budget decisions during the 2021 legislative session.

Updated 02/09/21

The state Legislature did not adjust the general fund appropriations for the University of Hawaii system during this most recent legislative session. However, from a statewide perspective, FY 2020 ended with a 6.2 percent decline in general fund revenues as compared to FY 19, and FY 21 is currently predicted at a 6.5 percent decline. We are therefore expecting significant reductions in our appropriation levels in the near future.

The Governor's budget request was submitted to the Legislature in mid-December and included a 15 percent reduction to the general fund appropriation to all campuses in the University of Hawaii system, an amount equal to $78.4 million. Enrollment has declined by less than 1 percent as compared to the prior academic year.

Updated 02/09/21

In Idaho, there was a 1 percent general fund reduction for FY 20 announced by the Governor on March 27 which was COVID-19 related. This was in addition to a general 1 percent reduction announced in the fall of 2019 which was not COVID-related. There were a few exemptions.

For FY 21, a 2 percent reduction was planned based on revenue projections and built into budget requests in the Fall of 2019. After the pandemic broke out, the Governor announced in early May 2020 that institutions were required to hold back 5 percent further on a one-time basis. There were no exemptions.

Updated 07/15/20

The primary effect on the Montana University System (MUS) is the loss of revenue from declining enrollments as well as auxiliary services, athletics, and sales/services. All campuses in the MUS are open for face to face instruction including hybrid and online learning as well. The MUS experienced a 5 percent decline in enrollment in this past fall semester and anticipates a similar drop this spring semester. In total, revenue across all funds in the MUS is down $40 million for FY21.

State-level investments in higher education are currently steady, with no declines. Capital projects, research, and financial aid are largely unaffected.

Future funding for higher education in the current state legislature is holding at approximately a 3 percent increase in state appropriation. Funding for capital projects, research, and financial aid remains yet to be determined.

Updated 02/09/21

Summer 2020/FY 2020 and 2021

The state of Nevada budgets on a biennial basis with the current biennium running July 1, 2019 through June 30, 2021. Due to the impacts of the COVID-19 pandemic, the state was facing a $1.2 billion shortfall, approximately 14.65 percent of total general fund appropriations for the biennium. To address the shortfall in FY 2020, the state utilized the $400 million available in the Rainy Day Account and a combination of transfers and one-time budget reductions. In July 2020, the Legislature convened for a special session to make reductions to appropriations for FY 2021 totaling more than $539 million statewide. The FY 2021 higher education general fund budget reductions total $137 million, or 19.8 percent, of FY 2021 higher education appropriations. However, the Board of Regents approved a temporary student surcharge that will result in an estimated $10 million in additional revenue for FY 2021. System institutions also received approximately $30 million in CARES Act institutional relief funds.

Winter 2021/FY 2022 and 2023

The state of Nevada continues to project general fund revenues for July 1, 2021 through June 30, 2023 at a lower level than the original legislatively approved level for July 1, 2019 through June 2021, resulting in the need for continued temporary budget reductions for the upcoming biennium. State agencies and the System of Higher Education were requested to prepare 12 percent budget reductions. The Executive Budget presented to the Legislature in January 2021 includes the 12 percent budget reductions proposed by the System.

Updated 2/18/21

The New Mexico Legislature recently completed a special session to address the state’s budget crisis. Our public higher education institutions (HEIs) saw their FY21 General Fund Instruction and General (I&G) appropriations sanded by 4 percent as were all state agencies. Other lines in the budget bill for HEIs (Athletics, Research and Public Service Projects etc.) were sanded by 6 percent. A planned compensation increase was also repealed. Further, the FY21 HEI appropriations were reduced by about two-thirds of the institutional share of CARES Act funding they received.

Overall, this constituted just under $65 million in reduced state support for higher education for the fiscal year July 1, 2020 through June 30, 2021.

Updated 07/28/20

In the current biennium, the Legislature protected state funding for community college and public university operations and need-based financial aid. Funding for public service programs, including research, was cut 5 percent while a recent bond refunding will save the institutions approximately $17 million during FY 2021.

The pandemic is projected to create an estimated direct cost of over $100 million for institutions through spring not including an estimated $350 million in lost or foregone revenue largely due to auxiliary activities. Federal funding will likely address much of the direct costs but not the lost or foregone revenue.

The Governor’s Budget as published in December 2020 for the 2021-23 biennium, which includes FY 2022 and FY 2023, provides no increase to funding for community college and public university operations. Need-based financial aid would increase with inflation. It also included bond funding for $339 million in capital projects, largely for space renewal and improvements. The next economic and revenue forecast, which will shape Legislative budget discussions, will be released at the end of February.

Updated 02/09/21

To date as a System we estimate that we have spent $70 million on COVID-19 expenses ($10 million on services to students, $32 million on Operational Costs, and $25 million on auxiliaries). We estimate $90 million of lost revenue across the System ($30 million in auxiliaries alone).

These numbers do not include athletics as we have not yet captured the loss from canceling the Fall season which we currently estimate at another $62 million ($56 million of which is the University of Utah alone).

The University of Utah Hospital/Health Sciences estimates they have spent an additional $54 million in COVID-related expenses and experienced $165 million of lost patient revenue (not included above).

The System received $49.3 million from CARES to distribute directly to students and $49.3 million for institutional expenses. To date the System has distributed $25 million and has encumbered another $11 million to students from the CARES funds. To date the System has spent $15 million and has encumbered another $17 million for institutional expenses from the CARES funds

State FY 21 budgets were cut in June by 2.5%. Right now, there aren’t any additional cuts anticipated.

Updated 08/25/20

The legislative session ended in early March, just before quarantines were implemented and before the shock to state revenues was felt. While there were calls for a special session of the legislature in June, July, or August, no such session has been called. As such, the impact of COVID-19 hasn’t been felt yet, beyond some vetoes in the 2020 supplemental budget. However, the state budget office required agencies (though not the higher education institutions) to submit details of how they would cut 15 percent from their state-fund budget in FY 2021, and now reductions of 15 percent will be required of agencies in the official budget request process for the 2021-23 biennium. The legislative session begins in January.

Updated 07/21/20

In the State of Wyoming, COVID19 has impacted general fund revenues significantly. General fund revenues are primarily driven by three facets of income; ad valorem on mineral extraction, tourism, and sales and use taxes. Each has been impacted to varying degrees which has left expected revenues for the current two-year biennium forecast to be approximately 30 percent, or $900 million, short of current appropriations. As a first round of general fund appropriation reductions, Community Colleges are taking a ten percent state aid reduction, or approximately $22.8 million, and an additional ten percent is being planned. The first ten percent represents a six percent reduction of total college revenue, the second, when implemented, will represent a 12 percent overall reduction of total college revenue just in state aid. The other sources of funding for the colleges comes from property taxes and tuition and fees. Along with any type of depression in the economy, property values typically decrease, resulting in a decrease in property taxes, of which we anticipate will be approximately another five to six percent reduction in college revenue and according to all projections, enrollment is off by another ten to 15 percent for the fall semester, another direct impact on college revenue. State funded Major Maintenance appropriations are taking the same ten percent reduction, equal to $2.7 million, along with a planned second ten percent, for a total of $5.4 million, forcing many planned projects to the deferred maintenance list. Deferred maintenance costs more to remedy than routine maintenance, costing more than this reduction in the long run.

Updated 07/20/20