UMass chief calls debt ‘untenable’
Says debt service is crowding out funding for faculty and driving up tuition, fees
STATE HOUSE NEWS SERVICE
The growing cost of covering debt is crowding out the ability of the University of Massachusetts’s five campuses to invest in faculty, staff and other projects and is driving up tuition and fees for students, UMass president Robert Caret said Wednesday.
“It’s just untenable,” Caret said during a State House hearing attended by two of the 10 members of the House Committee on Bonding, Capital Expenditures and State Assets.
Rep. Antonio Cabral, a Democrat from New Bedford and chair of the committee, said he has concerns that the UMass system has become nearly as costly as private universities around the state.
“Certainly in my area, some kids are priced out. I really hate to see that,” he said.
Cabral, who was joined by Rep. James Cantwell of Marshfield, said he sympathizes with university officials’ concerns about borrowing costs, although he noted that whether the university shoulders its debt burden or the state takes on more of the load, “In essence, it’s all the Commonwealth.”
“I’m hearing you and I understand that adds tremendous pressure on your operating budget. That translates to fees, tuition,” Cabral said. “It’s an ongoing discussion with you and UMass as a whole in terms of how we strike a better balance.”
Caret took the helm of the UMass system this summer, succeeding Jack Wilson. He described a growing demand for access to UMass schools –17 percent enrollment growth over the last five years – and a long backlog of maintenance projects. Caret said university officials hope to reduce that backlog over the next five to 15 years, and he intends to push for access to capital funds authorized in state life sciences and higher education borrowing legislation enacted in 2008.
“Education really is the cornerstone of our democracy,” he said. “If you want that in Massachusetts, if you want Massachusetts to be one of the bellwether states, then you need educational institutions that help you do that.”
Caret noted that the UMass system has a $550 million research and development budget, and he called for legislation that would use state bond funds to leverage millions of dollars in private or federal matching investments. He noted that he expects to meet with Secretary of Administration and Finance Jay Gonzalez next week and recently met with other state budget officials to discuss the university’s priorities.
Stephen Lenhardt, deputy higher education commissioner, told the committee that state higher education institutions outside of the UMass system each carry less than $10 million in debt service.
“There is a fair amount of capacity there for some of the institutions to assume more debt,” he said.
Freeland also noted that state colleges and universities have, in recent years, spent about 5 percent of their operating budgets on capital and infrastructure needs to address long backlogs of deferred maintenance.
“It has been a pattern, but it is not a pattern we necessarily want to continue,” he said, adding, “We’re behind the curve. We shouldn’t kid ourselves about where we are as a state.”
Freeland said Massachusetts is part of a long-term national trend of state governments decreasing their support for their public colleges and universities.
“When I started at UMass Boston 40 years ago, the state provided 85 percent of the operating budget at that institution. Today it provides 40 percent of the operating budget,” he said. “Our state universities are getting only about 45 percent of their funding from the state budget. Scholarship dollars have not kept up with this cost shift.”
He said student costs at public institutions are split at about 80 percent in fees and 20 percent from tuition. Fees are retained by the universities while tuition revenues are sent to the state, Freeland said.“What has happened, the basic dynamic has been, as costs have shifted from the state appropriation to students, that has not been reflected in tuition increases, which have stayed pretty level,” he said. “It has been reflected in fees.”
Freeland noted that the department hopes to use some of the funds available in the higher education bond bill to address deferred maintenance projects. Leonhart added that he expected the full $891 million contained in the higher education bond bill for state colleges to be spent over the next four or five years – all on new construction. An additional $130 million that hasn’t been earmarked, he said, may be spent on a deferred maintenance program.