Legislature cuts University of Hawaii-Manoa’s operating budget by nearly 14%

Legislators have chopped the general funds operating budget for the University of Hawaii at Manoa by 13.8% for the fiscal year that starts July 1, a major blow that could be hard to absorb.

In a legislative update posted this morning on the university’s website, Chief Financial Officer Kalbert Young reported on details from budget worksheets released at the close of the legislative session last week.

Across the 10-campus system statewide, the Legislature sliced general funds for the university by 8.8% overall for the coming 2021-22 fiscal year, as compared to the 2020-21 operating budget. The community colleges suffered the least, with a 2.8% cut.

The University of Hawaii at Hilo’s general fund budget was reduced by 5.5%, UH West Oahu by 4.7% and the system-wide budget by 5.7% for the next fiscal year.

“UH Manoa, by far, is the most severely impacted in the budget since it will have the largest amount of general funding reduction (-$35.6 million in FY22), as well as the largest percentage reduction than any other campus,” Young wrote.

The University of Hawaii system received $544.23 million in general fund appropriations in the current fiscal year. Under the new biennium budget approved by the Legislature, it is due to receive $496.36 million in the next fiscal year, followed by $501.91 million in fiscal year 2022-23.

Sen. Donovan Dela Cruz, chair of the Ways and Means Committee, said that reductions in spending were necessary statewide and were less than what the governor had originally proposed in December.

“I can understand the university’s perspective, but we have got to look at the overall state budget and all state departments and where the pressing needs are now during the pandemic,” Dela Cruz told the Star-Advertiser.

The state’s general funds operating budget for the coming fiscal year totals $7.425 billion, down from $8.027 billion in the current fiscal year, or a 7.5% reduction.

Dela Cruz noted that UH Manoa has access to special funds, revolving funds and some federal funds, in addition to state general funds.

“That’s why we tried to give some support to the community colleges because they don’t have access to the same funds that the four-year campuses do,” he said. “We are looking into a new economy and we have to do workforce training. That tends to be where the community colleges have a bigger focus.”

While UH Manoa’s general fund appropriations, at $210 million, are about 42% of the total UH general fund budget, the $35 million reduction to the flagship campus next year represents 75% of the total cut to UH, Young wrote.

The cutbacks dismayed UH Manoa Public Policy Center Director Colin Moore, who recently was elected to the executive committee of the Faculty Senate for a term starting this fall.

“I find these budget decisions perplexing and demoralizing,” Moore said in an interview. “This death by a thousand cuts approach to management really is not helpful. One of the best ways to grow and diversify Hawaii’s economy is through a strong research university. These cuts make it harder to support programs across the curriculum and to recruit new faculty.”

“There are other small states that would love to have a university that attracts the sort of grants and does the research that UH does,” Moore added. “There needs to be more collaboration here, clearly. I think we all want the same thing at the end of the day — a great research university in the central Pacific.”

The largest single project in the capital improvement budget approved by legislators for next year is something that the university had not sought and that came as a surprise: a $42.5 million Resource and Education Center in Wahiawa.

Young noted in his message that it “was not requested by the board and it is unclear what this project entails.”

In a legislative update to his constituents Monday, Dela Cruz announced that the Senate had pushed to include that center, which is in his district, in the final draft of the budget.

“This project will consist of constructing a new library, Department of Education offices and classrooms for the community colleges,” Dela Cruz wrote. “These key state and city services will help revitalize Wahiawa town.”

Overall, the UH Board of Regents had sought $288 million in capital improvement projects in the next fiscal year statewide and $232.5 million the following year. The Legislature appropriated $203.35 million for the first year and less than half of what was sought for the second year — $102.6 million in general obligation bonds.

The biennium budget, HB200 CD1, has been transmitted to the governor for consideration.

UH President David Lassner is out of town and is expected to address the budget situation next week, considering plans for next steps.

Young said the university is assessing how much of the latest Higher Education Emergency Relief Funds from the federal government could be used to help plug holes in the budget. Until now, 50% of such funds have had to go directly to students as emergency financial aid grants to help with living and other costs.