The University of Hawaii has come up with a draft operating budget that assumes zero tuition increases over the next two fiscal years, but officials say the decision to adjust tuition up or down won’t happen until May, after the Legislature finalizes the state’s budget.
Any tuition hike, at this point, would not be for operations, but to repay revenue bonds that would be used to start tackling the university’s growing repair backlog and make facilities improvements.
"As the campuses were developing their operating budgets, they needed to make an assumption of no tuition increase, and indeed we have done that on the operating budget side," UH President David Lassner said Thursday at the monthly Board of Regents meeting.
To help make up for the flat tuition directive, the draft budget, which is still a work in progress, seeks $24 million in state funding next fiscal year to help cover about one-third of the utility costs across the 10-campus system.
It seeks an additional $6 million from the state to ensure compliance with federal mandates under Title IX, which bars discrimination based on sex in programs receiving federal funding, and the Violence Against Women Act.
Lassner said the additional state support would let UH invest tuition revenue in strategic initiatives.
"Essentially we’re requesting operating funds for energy and a few other programs so that we can reinvest tuition in student-success initiatives and other activities that support the strategic direction,"he said. "And if the Legislature is willing to fund capital improvements that we require, that will create an opportunity for no increase in tuition."
UH is in the third year of a five-year tuition schedule, approved in 2011, that will eventually raise tuition by more than 30 percent. But regents have said they are amenable to dialing back the annual 7 percent tuition hikes built into the final two years of the schedule.
The university last fiscal year collected $362 million in tuition and fees across its 10 campuses — up from $349 million the year before — representing nearly 42 percent of total operating revenues.
Regents Budget Chairwoman Jan Sullivan said her committee will propose the board change its policy to allow the regents to decrease tuition with shorter notice. The current policy requires a semester’s advance notice for changes.
That requirement would stand for any tuition increases.
Relying less on tuition revenue and depending on additional support from the state is likely to be a hard sell at the Legislature.
The state Council on Revenues, which sets the forecast used by lawmakers and the governor when drafting the budget, earlier this month downgraded its forecast for the 2015 fiscal year. As a result, the state is expected to have about $110 million less in tax revenue for the year.
House Finance Chairwoman Sylvia Luke did not immediately return a call seeking comment on UH’s proposal, and the Higher Education Committee chairmen in the House and Senate were unavailable for comment Thursday.
Given the uncertainty in past years, Lassner has suggested the regents wait until May to adopt an operating budget for the fiscal year that starts July 1.
This would represent a shift from the current practice of adopting UH’s budget request to the Legislature as the its operating budget.
"The nuance here is that we’re recommending at this point that we make a final decision after the legislative session, when we actually know how much money we’ll have appropriated for us," he said after the meeting. "When we try to make plans now for next July, we just don’t know, really. In May is when we would finalize what we plan to do in the next fiscal year."
He said that some programs are already counting on the 7 percent hikes, including UH-Hilo’s College of Pharmacy and Manoa’s John A. Burns School of Medicine.
It’s possible that reduced tuition rates might apply to some schools and not others.
"For some programs, the tuition level that was already approved for the next two years might continue, and for others, it might drop," Lassner said.
