University of Hawaii asks Legislature for $33.5 million

The University of Hawaii told lawmakers Tuesday it needs $33.5 million to replenish tuition revenues that have been used to cover salary restorations and increases in a six-year faculty contract.

In return, the university promises to dedicate about half of the money to debt service on revenue bonds to start tackling the university’s massive repair backlog.

Deferred maintenance needs a total of $487 million across the 10-campus system, with the bulk of the work needed on the flagship Manoa campus. Officials point to a combination of reasons for the neglected repairs, including downturns in the economy, inability to secure funds from the state, and capital improvement resources being diverted to new construction projects.

UH proposes eliminating the backlog over six years, and repaying the bond debt with tuition over the next 30 years. It needs approval from the Legislature and governor to float the bonds.

"Our approach this year is to say, ‘Let’s try something different. Let’s come in and ask to see if the Legislature and the (Abercrombie) administration will support us taking responsibility for this backlog,’" interim UH President David Lassner told the state House Finance and Senate Ways and Means committees Tuesday.

UH is asking the state to cover two costs tied to its contract with the University of Hawaii Professional Assembly, ratified in 2010: $14 million for multiyear salary restorations and $19.5 million for 3 percent raises this year and next year. Lawmakers previously told UH to use tuition for the increases.

Lassner said UH would use the $14 million to issue $212 million in revenue bonds in the first year of its plan. That would wipe out the repair backlogs at all of the campuses, except for UH-Manoa. The university would continue issuing bonds in subsequent years for Manoa.

Some lawmakers questioned UH’s ability to take on such a large project, concerns that have been fueled by complaints that Manoa staff are already swamped with routine repairs and construction.

Lassner said UH is reorganizing its facilities branch to handle the influx of work and working on a comprehensive review of current procedures.

Gov. Neil Abercrombie’s proposed budget, which lawmakers will use as a starting point, includes $198 million in revenue bonds next year for UH’s plan. It also includes the $33.5 million UH requested in general funds for the faculty increases.

One lawmaker homed in on tens of millions of dollars in tuition revenue that UH says it gives back to students in the form of scholarships.

As UH touted that over the past five years it has doubled to $40 million the amount of tuition scholarships doled out, Rep. Scott Nishimoto countered that the money could instead be used for the construction bonds.

"Part of my concern is that you’ve doubled the amount of tuition you guys are giving away, but you’re also coming to us for more money," said Nishimoto (D, Kapahulu-Moiliili), vice chairman of House Finance. "At what point do you cut that off or kind of taper that off?"

Lassner said UH chose to dedicate more tuition revenue to financial aid during a tuition hike several years back to ensure needy students could still afford tuition.

"Everything can be a trade-off, and reducing financial aid for needy students, or any number of things, certainly could produce revenue," he said.

Board of Regents Chairman John Holzman said the board is committed to providing an affordable education, and will review tuition increases set to kick in over the next two years.

He said the regents will do a "thorough scrub" of the five-year tuition schedule that took in effect in 2012-13 and will gradually raise annual tuition by a total of 35 percent.

"Our hope, and it is only a hope, is to whittle back the 7 percent tuition increases that are now scheduled to take place in each of the next two years," Holzman said.

Earlier in the week, about a dozen members of Manoa’s student government gathered at the state Capitol in support of Abercrombie’s proposed budget.

Manoa senior Richard Mizusawa, president of the Associated Students of the University of Hawaii, said repairing buildings is top of mind for students.

"Sometimes there’s mold in buildings that haven’t been addressed for years, and if they have, it’s not where it’s long-term care," he said. "The whole atmosphere — just the look of the campus and the physical appearance — has a really big impact on whether or not students are more supportive or not of the university."