Budget Bust

11/14/08-University of Rhode Island President Robert L. Carothers and R.I. Gov. Donald Carcieri spokesperson Amy Kempe acknowledged that Rhode Island's economy has an effect on government support of public higher education.Kempe said the state expects a $233.6 million revenue shortfall for the Fiscal Year 2009, and that the Carcieri administration have been working the last several weeks "on initiatives to address the budget situation."

"These are extremely difficult economic times and they will have to make dramatic changes," Kempe said of the Carcieri administration.

The administration will look to "reduce expenditures" and considering possible revenue-enhancing policies in the future, Kempe said.

Carothers said URI is at the approximate funding level that it was in 1989, and it costs the university $25,000 a year per student for tuition only. Out-of-state students pay that entire sum, but in-state students pay about $8,000. and this leads to a deficit, he said.

Even with state funding, Carothers said URI receives about $15,000 per each in-state student, an unsustainable figure from a business perspective.

"The sad part about all that is that if people were mad at us, we could change things . you never hear anyone say anything negative about the university, people just don't care," he said, referring to a lack of complaints from citizens about reduced state funding.

And because of that indifference, Carothers said there was opposition to his idea to put the state funding into a scholarship fund.

Kempe said since URI's funding is about the same level it was in 1989, the university's budget hasn't actually decreased. When asked about a $17.5 million cut to higher education in the spring, she pointed to the state's economic hardship.

"The state announced it has a $372 million budget deficit this year alone," Kempe said. "These are certainly very difficult times."

Carothers said the economic problems are reducing the state's support of public higher education, but in the 1970s people began seeing higher education as a private benefit, instead of a public good.

"It's drifted away from the notion of service to the community," Carothers said. "It's been more of a 'me' orientation."

He said the philosophical change started during the Ronald Reagan administration, with "trickle down" economics, where wealthy individuals were expected to spend money, creating jobs for their less-wealthy counterparts.

"Instead of focusing on lifting people up, the paradigm focused on people catching the crumbs," Carothers said. "We call that the 'me' generation. And then we saw in the [second] Bush administration, there was such a focus on making money . that everybody wanted to be a hedge-fund manager, everybody wanted to work on Wall Street."

And in the face of economic turmoil, Carothers said state governments feel able to exercise some discretion in higher education, and while many other state universities are also facing cuts, it's more pronounced in Rhode Island because of the loss of industry and blue-collar jobs.

But budget tightening isn't restricted to state universities.

According to the Boston Globe, Harvard University - the most affluent university in the United States - Dartmouth College and Boston and Brown universities are also considering hiring freezes or spending assessments of some kind.

And because small states have smaller budgets, Carothers pointed out that after social services and the practice of wealthy getting tax breaks, not enough of the budget is left for higher education.

"We just don't make as compelling a case on the humanities level," Carothers said.

With tuition rising and funding receding, Carothers said relief will not likely come in the short-term, and if it does come, it will require changes to how Rhode Island spends its money.

URI Economics Department Chairman Glen Ramsay said if the state falls short on expected revenue or expenditures are higher than expectations, budget cuts become necessary. However, government support would be resistant to state economic behavior if revenue and expenditures met these expectations, Ramsay said.

"This governor has been extremely reluctant to raise taxes, which means the only thing he can do is cut expenses," he said.

Higher Education Commissioner Jack Warner could not be reached by press time for comment.