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$69 Million Deficit, Surprise Drop in Enrollment, Add to Labor Tensions at CSCU

The Connecticut State College and University system is facing a larger than expected $69 million deficit in fiscal year 2021 after a 15 percent decline in enrollment at its twelve community colleges added to a $52.5 million deficit at the four state university campuses.

The drop undercuts conventional wisdom that lower cost and public unease with dorm life during the pandemic would boost community college enrollment in the fall, and underscores deepening tensions with organized labor to close the gap.

“We are facing serious financial challenges. We are seeing reduced enrollment, reduced residence hall occupancy and at the same time the cost of running our institutions has increased all because of COVID,” said Mark Ojakian, president of the Connecticut State College and University System at a meeting of the Board of Regents on October 7. 

In the spring and summer, as budget discussions at the Board of Regents were underway, school officials were instead focused on the expected impact of reduced enrollment and occupancy at the four state universities: Eastern, Central, Southern and Western. 

“Our thinking was apparently quite off, but at the time we expected a zero percent decline,” Ben Barnes, the chief financial officer for the system, told the Board of Regents. 

“It’s reasonable to think of community colleges as we think of businesses. Residential programs pose a significantly higher risk,” said Rick Levin, former president of Yale University and co-chair of the education committee of the Reopen Connecticut Advisory Group, at the time.

The Board of Regents earlier projected an 8 percent decline in enrollment at the state colleges and universities, but no decline at the community colleges.

“Our thinking was apparently quite off, but at the time we expected a zero percent decline,” Ben Barnes, the chief financial officer for the system, told the Board of Regents. 

Instead the community colleges have suffered a 15 percent drop in enrollment resulting in a $16.4 million deficit to the system. 

“The decline was focused in part-time students and on our urban campuses and minority students,” Barnes said. “The areas we have been working to recruit in.” 

Still the largest drop in revenue for the system is due to an extremely low occupancy rate at the four state university campuses. It was predicted that dormitories would be at 76 percent capacity with COVID-19 restrictions. Instead just 53 percent of beds are occupied, resulting in a $52.5 million deficit, according to a report released by Barnes. 

Chronic mismanagement or labor intransigence?

“I believe more now than I did then [in 2008] that we need to engage in a shared sacrifice,” said Ojakian to the Board of Regents.

Barnes said that system has already reduced spending by cutting the number of offered class sections in keeping with lower enrollments and has slowed hiring planned as part of the “Students First” consolidation of the state’s community colleges. The latter saved the system $4.4 million this fiscal year. 

“They must participate,” said Jimenez. “Forty-six percent of our expenditures are on salaries. It is clear to me that everything else is a lot smaller. We can’t make meaningful change if we aren’t looking at salaries. Things like salary cuts, furloughs, those are non-controversial, common practice, must-dos.” 

Barnes and Ojakian said that they would also like to reduce the system’s salary costs, but the unions had so far refused to negotiate.

“They did not have a serious response to the challenges we are facing,” Ojakian told the Board of Regents. 

David Jimenez, a member of the Board of Regents Executive Committee called the union’s stance “indefensible.” 

“They must participate,” said Jimenez. “Forty-six percent of our expenditures are on salaries. It is clear to me that everything else is a lot smaller. We can’t make meaningful change if we aren’t looking at salaries. Things like salary cuts, furloughs, those are non-controversial, common practice, must-dos.” 

According to labor representatives, however, the current deficit is more than a matter of the current emergency, and is instead a long-running culmination of mismanagement and underfunding.

“It’s a systemic lack of support,” said Patty O’Neill, president of the Connecticut State Universities American Association of University Professors.

“It’s a systemic lack of support,” said Patty O’Neill, president of the Connecticut State Universities American Association of University Professors in an interview with CT Examiner on Monday. “In my response I suggested a number of long-term steps that could be taken and should have been taken beforehand.”

Among her recommendations, O’Neill suggested that the $35 million set aside for community college consolidation be used instead to offset the deficit. O’Neill recommended securing additional funding from outside the system, possibly from the state, to pay for an as-yet unfunded mandate to offer free tuition to all students beginning this fall at the state’s community colleges. The Connecticut State College and University system has carved out $3 million from its reserves to pay for the program. According to O’Neill, a decline in state funding as a percent of the system’s revenue also shares blame for the current deficit. In 2019, the system faced a $57 million deficit.

Okakian said that defunding consolidation was not an option.

“Abandoning the consolidation of the community colleges is not an option,” Ojakian said. “This is a board directive, a board initiative. We have scaled down our funding for that in our upcoming year, but eliminating completely, is not an option we are bringing to the table.” 

State or federal aid?

With negotiations between the union and administration at a standstill, the last resort to close the budget gap is additional aid from the state or federal government.

Last week the state’s Office of Policy and Management approved $10 million of emergency federal funding through the CARES Act to reimburse the Connecticut State College and University system for the fiscal year 2020 cost of refunding room and board to students after state schools were forced to close in the spring.

Whether additional state or federal funding will become available is uncertain. 

“We continue to engage with these institutions regarding their financial needs,” said Max Reiss, Communications Director for the Governor’s Office. “We have been in communication with them about the heavy strain the pandemic has placed on their bottom lines.”  

According to Ojakian, he has also been in discussions with the legislative Committee for Higher Education and is hoping to see a bill introduced during the 2021 session to provide more funding to the system this coming year. 

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