The 10-campus University of Hawaii system is looking at some rocky financial years ahead due to the impacts of the coronavirus pandemic, university officials told lawmakers Thursday.
“We know that the fiscal impacts will not be temporary,” UH Board of Regents Chairman Ben Kudo told members of the state House Committee on Higher Education and Technology. “The fiscal impacts we predict will go on for years and will get worse in the next two or three years.”
Thursday’s online informational briefing was scheduled by the committee to hear about the university’s response to the COVID-19 pandemic and potential budget cuts.
Last month more than 200 executive and managerial employees took a salary reduction of at least 9.23% in preparation for a significant budget shortfall due to the pandemic.
What’s more, regents approved a flat budget calling for no spending requests over the next couple of years.
“We are not so optimistic that that is what we will live with, but we did want to get in front of the governor’s budget,” which is due out next week, UH President David Lassner told lawmakers.
UH enacted a freeze on expenditures, Lassner said, and is now working on a retirement incentive program for faculty and a furlough program in accordance with Gov. David Ige’s directive.
“We know that we will have to learn to make do with a smaller infusion of general funds than we have today,” he said.
With most of the millions of dollars in federal coronavirus relief funds now in the rearview mirror, Lassner said UH administrators are actively working on “right- sizing” the university in the face of expected budget cuts and declining enrollment and are looking for new sources of revenue to supplement diminishing state general funds and tuition revenue.
“We are committed to living within our resources this year so that we could preserve our reserves to get us through the more difficult years ahead,” he said.
Despite the doom and gloom, Lassner was upbeat and resolute, praising the university community for stepping up to meet the challenge in front of it.
Only 68 coronavirus cases have been connected to the 10 UH campuses since the beginning of the pandemic, he said.
“It’s a pretty remarkable record, and we’re very proud of it and it’s a credit, really, to the diligence of our students, faculty and staff.”
Enrollment is down overall, Lassner said, but not as much as other institutions around the country. While higher-education enrollment is down across the nation in the range of 3%, it is actually up over 3% at the Manoa and West Oahu campuses. And while enrollment at Hawaii’s community colleges is down 2.6%, nationally community colleges are off about 9%.
“So even though it’s down and we’re disappointed, we’re down a lot less than the national averages,” Lassner said, adding that UH conducted some extra student recruitment campaigns and extended application deadlines to help boost enrollment.
In addition, graduation rates continued to rise at most UH institutions in 2020 while dropout rates were better than expected despite the challenges of the pandemic, he said.
Kudo said COVID-19 isn’t the only weight on the shoulders of UH’s immediate future.
Like other institutions of higher learning, UH is facing an enrollment cliff in 2026, when the number of 18-year-olds is expected to drop by more than 30% and competition for island students will be more acute, he said.
“Keeping our enrollment numbers will be a challenge because other schools on the mainland will be cherry- picking our students to go to their schools to survive. Competition for students will be very difficult come 2026 and thereafter,” the trustee said.