UH funds request gets cool reception

Lawmakers don’t appear eager to deliver the more than $16 million the University of Hawaii says it needs for operations next year.

At a budget briefing Tuesday before members of the state House and Senate money committees, lawmakers expressed frustration over the university’s annual requests for more public funds, saying the Legislature isn’t convinced that UH is running an efficient and sustainable operation.

One lawmaker blasted the university’s decision last summer to scale back tuition increases for the next two years — forgoing millions in tuition revenue — while another questioned more than 1,600 so-called unauthorized positions at UH, posts that aren’t funded with tax dollars.

At the budget briefing, which stretched on for 2-1/2 hours, UH President David Lassner presented a request for $16.2 million in budget add-ons, including support for the struggling UH Cancer Center and the cash-strapped athletic program. The funding would add to the $428 million in general funds already approved in the state’s two-year budget.

Gov. David Ige’s proposed supplemental budget, which legislators will use as a guide in drafting the state budget when the legislative session starts next week, included $9.8 million in add-ons for UH.

“There will be some pretty active discussions in terms of what are the priorities and what are the needs, and ultimately how are we going to be able to fund it and sustain it. Those are the critical questions that lawmakers and the public will have for our university,” Senate Ways and Means Chairwoman Jill Tokuda told the Honolulu Star-Advertiser.

“It is a big priority for everyone, that we support higher education, but we have to be able to make sure that the moneys are spent wisely and that we can sustain it going forward,” she said.

Scott Nishimoto, vice chairman of the House Finance Committee, was critical of the university’s decision last summer to lower tuition hikes at UH-Manoa to a 5 percent increase from a scheduled 7 percent increase. The Board of Regents also voted to lower tuition to 4 percent increases at UH-Hilo and UH-West Oahu, and 5 percent increases at the seven community colleges.

Altogether, Lassner said, the decision resulted in an estimated $12 million reduction in tuition revenue.

“What I’m concerned about is that you don’t institute the full increase that the regents had approved, yet you come to us for more money every year,” said Nishimoto (D, McCully-Moiliili-Kapahulu). “With autonomy comes responsibility, and at some point you have to take responsibility. I feel like you want us to fill the void for what you don’t have, but at the same time you’re cutting tuition increases.”

Lassner defended the decision, which was intended to keep tuition affordable. The increases, approved in 2011, were built into the final two years of a five-year tuition schedule that was to ultimately raise tuition by more than 30 percent. Annual tuition at the flagship Manoa campus is $10,344 for the 2015-16 academic year.

“There are multiple perspectives on who pays for public higher education in every state in this country,” Lassner said. “Public higher education is very unique in that it is both a public good and a private good. It is good for the student and their family, and that’s one of the reasons to charge tuition — they receive a positive benefit from it. And it’s good for the state in that it stimulates the economy.

“There is never 100 percent agreement about how the cost of higher public education should be shared between students and their family and the taxpayer. And that’s one of the reasons we’re here. I will say it was my belief and the vast majority of the regents’ belief that holding the increase to 5 percent … was responsible.”

The UH system, which had $1.53 billion in operating expenses last fiscal year, got roughly one-third of its budget from tuition and fees ($392.5 million), a third from the state ($413 million) and a third from other university-sourced revenues such as grants and contracts ($386 million), according to the university’s latest audited financial report.

Some lawmakers also took issue with a $5 million request for the financially troubled UH Cancer Center in Kakaako. At this time last year, UH officials were asking for resources and promising an updated business plan for the research center, which has been overspending revenues by $7.5 million to $9.5 million a year and draining its reserves to stay afloat.

UH last year hired a mainland consultant to develop a business plan, which is expected to be completed by the end of the month, Dr. Jerris Hedges, dean of the medical school and interim director for the center, told lawmakers.

“You’ve got about enough life (in reserves) to get you … you’ll be OK for fiscal 2016-17, but we know by fiscal ’18 you’re in the red,” said Tokuda (D, Kailua- Kaneohe). “If you’re going to ask the state to kick in additional funds, we have to know what Manoa, what UH is going to also be giving to contribute to the sustainability of the Cancer Center.

“It’s not to say we don’t believe in it. We have believed in this from Day One. But what we have been asking for from Day One is a sustainability plan, and we have yet to receive this … and so far, you’ve just been giving us excuses, as far as I can see,” she said. “So far, I’ve just watched you folks whittle down your reserves year after year after year.”