University officials say revenue options 'scary' with drop in state funding, greater need for financial aid

By: Tyler Will

Posted: 2/1/08

2/1/08 - State funding for the University of Rhode Island is dropping while the demand for financial aid is increasing. At the same time, the cost of keeping faculty and campus maintenance costs are also on the rise.

Vice President for Administration Robert Weygand presented these facts and other daunting financial figures before the Faculty Senate yesterday in the Kirk Center for Advanced Technology. President Robert L. Carothers said URI will become an institution independent of state funding in 2024 or sooner, and that the state government is only providing about half of what it should.

"It is time for some tough decisions and some creative thinking," Carothers said, referring to current options as "scary." But Carothers also stressed the need for immediate action.

"Continuing what we're doing now is scarier," he said. "Our challenge in this next year will be to grow our own revenue. That is a very significant challenge."

Carothers also said that faculty sacrifices may have to be made, in addition to possibly looking at a new health care program.

Weygand said state funding accounts for 26 percent of the university's revenue in the fiscal year 2008, while student tuition fees account for 62 percent of the university's revenue. The 2008 fiscal year began on July 1, 2007, and will end on June 30, 2008.

Weygand said URI lost $5.5 million in state funding since the last fiscal year, and more budget cuts are expected. The exact figure of the cut for the next fiscal year will be known later today, when R.I. Gov. Donald Carcieri will release the state's new budget figures. Carothers said the funding for URI could be a "horrific number."

"We are one of the poorest-funded states in the country," Weygand said. "There has been a total attitude change in the attitude in regards to public higher education."

Carothers said URI receives $75 million from the state. According to the 2008 R.I. state budget appropriations, Rhode Island College receives $45 million, and the Community College of Rhode Island receives $49 million from the state.

While state funding is expected to decrease, URI's student demand for financial aid is climbing. The amount of aid the university has given to students increased by $6 million since fiscal year 2007. Student financial aid accounts for 15.5 percent of the university's annual budget.

"That's tough to do," Weygand said. "It's much easier to do when you have large endowments. We've been able to [provide financial aid] very successfully."

In the late 1980s, Weygand said state funding was about even with revenue from tuition and fees. In 2008, however, he noted that tuition fees were about $100 million higher than state funding, which varied little since 1989 when compared with the tuition and fee spike.

That same year, URI state funds were higher than tuition fee revenue. In 1991, tuition fees and state funding were equal. But since 1992, state funding has been less than tuition and fee revenue.

Carothers said educating each student at URI costs an average of $19,000 per semester. In-state students are paying $8,000 in tuition and fees, and out-of-state students are paying $23,000 in tuition and fees.

Multiplied by the number of in-state paying students, Carothers said the cost of the discount is $134 million.

"If the state [funding] goes to $63 million, that will be an even bigger gap," Carothers said.

"The question that has to be raised now is what is the right price for Rhode Islanders to go to the university?" Carothers said.

In-state students pay less tuition because the state government pays URI to subsidize the tuition prices for its taxpayers. However, when state subsidiaries do not match the rising cost of education, the university faces a budget crisis.

In a November meeting with the South Kingstown Town Council, Carothers said, "If we could keep 10 percent of the kids who walk away ... all our financial problems would disappear."

When asked if he still thought this, Carothers said, "It would certainly be a big help."