Budget request by UH draws criticism

The chairman of the House Higher Education Committee blasted University of Hawaii officials at a budget briefing Tuesday for seeking funding for new projects and initiatives when the university’s repair and maintenance backlog has swelled to over a half-billion dollars.

Repair needs across the 10-campus system hit $503 million this year, up from $460 million three years ago, with most of the work needed on the aging flagship Manoa campus.

“Obviously, it’s going in the wrong direction,” said state Rep. Isaac Choy (D, Manoa-Punahou-Moiliili). “That goes to my assumption, or my theory, that we have an unsustainable product here.”

UH presented its budget request for the upcoming fiscal year, which asks for $16.2 million in additional state funding for operations, including $5 million for the financially struggling UH Cancer Center, $3 million for UH-Manoa’s athletics program and $3.5 million for a university initiative to boost research and innovation.

The supplemental requests would add to the $428 million in general funds lawmakers have appropriated for UH next year as part of the state’s biennial budget. On the capital improvements side, UH is asking for an additional $185 million in state-backed bonds.

“We have a deferred maintenance problem, and yet you folks are still wanting to do CIP projects,” Choy said. “What’s the thought process and prioritization when you request items? … Which is more important, deferred maintenance or that? Where’s the logic in this budget request?”

Jan Gouveia, system vice president for administration, said the university is working to be more strategic in its approach to repairs and maintenance.

“Deferred maintenance is definitely a black eye,” she said. “But the greater need is really to provide modern facilities that support learning in the, you know, the current century. So how do we have a more holistic approach that infuses the academic needs, program needs as well as the facility?”

Choy suggested the university could reduce its maintenance budget by reducing its footprint, or eliminating square footage occupied by “nonperforming” programs. “You cannot just keep building and adding and adding,” he said.

Kalbert Young, UH’s vice president for finance and the state’s former budget director, said UH’s repair needs are growing because it hasn’t received sufficient support from the state in past years.

“The reason that the deferred maintenance number has gone up over the last three years and that the average annual requirement for addressing deferred maintenance has gone up is because … the state and Legislature has only put up less than $60 million each of those years,” Young said, referring to the minimum needed to keep up with annual maintenance. “Inaction leads to increased liability.”

Choy replied, “That’s the reality of the needs of the state. We have other needs in the state, too. And so to me you guys are living in this world where you feel that we’re going to keep funding. … We have homeless needs, and we have prisons and dengue and everything else that we need to address.”

Choy and the university continue to disagree on how to tackle the backlog, which includes repairs that date back more than a decade.

UH in 2013 proposed using tuition-backed revenue bonds to eliminate the backlog over six years, but legislators bristled at the idea of saddling students with long-term debt. The university came back last year and asked the Legislature for state-backed bonds and was again rejected.

“I think the financing solution to address this half-a-billion-dollar problem is a combination of the three,” Young said, referring to revenue bonds, general obligation bonds and general funds. “There is no other funding option; it’s either public support or tuition revenue.”

Choy said a fourth option would be to “make a sustainable infrastructure, work towards that.”

“You’re saying fund, fund, fund,” he said. “I’m saying, ‘You know something? We don’t have the money.’”