Squeeze Play

By Richard Westlund March 1, 2011

It’s a classic squeeze play. While enrollment at Southwest Florida’s public colleges and universities is rising, funding is critically tight, even with sharply higher tuition rates. A significant reduction in the state’s higher education budget this spring will have serious repercussions for the region’s academic institutions, skilled workforce and business community.

So far, State College of Florida, Manatee-Sarasota (SCF), New College of Florida and University of South Florida Sarasota-Manatee (USF) have been able to weather the financial storm, according to their administrators. But their ability to keep up with enrollment demand—including building new facilities—may depend on how quickly Florida’s economy can bounce back from the so-called great recession.

“The state simply has not been able to fund the growth in our system, which occurs whenever there’s an economic downturn,” says Willis Holcombe, chancellor, Florida College System, whose 28 institutions, including SCF, grant two- and four-year academic degrees. “With our open-door enrollment policy, we have seen significant growth in our undergraduate student population.”

Student growth is also occurring, although at a slower pace, at the State University System of Florida, which includes New College, USF Sarasota-Manatee and Florida Gulf Coast University in Naples. Tuition costs and student fees are rising quickly, but construction of new dormitories, academic halls and student facilities has fallen behind.

“Capital outlay projects are vital to state universities,” says Chancellor Frank T. Brogan in Tallahassee. “Without them, we have ‘no room at the inn.’ Universities can’t just pull a switch and build new facilities. These projects are short-term and long-term economic engines that keep our public higher education system competitive.”


The state’s budget woes

This month, Gov. Rick Scott and the Florida Legislature will be grappling with a budget shortfall estimated at $3.5 billion. Their decisions about the fiscal year 2011-12 budget will have a major impact on Southwest Florida’s public colleges and universities.

Last year, federal stimulus dollars helped cushion some of the impact of the state’s economic downturn. But any help from Washington is unlikely this year, according to Kelly Layman, executive director of communications and development, State University System in Tallahassee. “Student demand is there, but that growth brings capacity issues. It’s a challenging balancing act,” says Layman.    

Now, Sarasota’s public institutions are making contingency plans in case there are significant budget cuts from the Legislature this year. SCF, already facing a $3.1 million payment to the federal government for improperly giving loans to ineligible students, is feeling the pressure.

“Once we know the amount of the budget cut, we will see if additional strategies are needed, such as making more cuts to local travel,” says Carol Probstfeld, vice president, business & administrative services, SCF, Manatee-Sarasota. “We will make every effort to minimize the impact on the student experience, although we could be looking at having fewer class sections or increasing class size.”

Arthur M. Guilford, regional chancellor, USF Sarasota-Manatee, has also been carefully reviewing budget options. “USF would reduce as many things as possible without cutting the academic programs,” he says. “We would reduce non-salary operating expenses and library book acquisitions. We would eliminate equipment purchases, and custodial services would likely be reduced as well.”

Like other area public institutions, New College has been adversely impacted by recurring budget cuts and the challenging economic environment, according to John Martin, vice president of finance and administration. “College-wide budget reduction planning efforts have thus far been able to protect the core academic program,” he says. “However, 75 percent of the college’s operating costs are related to salary and benefits, and future funding reductions would require significant salary reductions impacting all pay plans.”

The rising demand

Southwest Florida students—including many unemployed workers—are clamoring for college training programs to help them re-enter the job market, ideally at a higher salary. The most popular programs, according to administrators, include health professions, criminal justice, paramedics/EMTs, aviation maintenance and teaching.

Because these certificate and degree programs reflect the job needs of the region’s businesses, enrollment growth should be encouraged, according to Holcombe. “These programs can create careers for Florida residents, as opposed to just an hourly job,” he says. “Why would you ever put caps on admissions, when you need a trained workforce? That would hurt our state’s ability to recover economically.”

The same principle holds true for bachelor’s degree and graduate students. Noting that 28 percent of New College’s graduates in the past five years have gone into careers involving science, technology, engineering and math, Martin says, “New College will continue to do its part in producing top-notch graduates that can help the business community grow and prosper.”

Guilford estimates that USF Sarasota-Manatee contributes $70-75 million to the local economy on an annual basis. “We would be significantly restricted on what we would be able to offer the community with another round of cuts,” he says. “We would need to redirect our resources, reduce what we can achieve, and likely eliminate some of what we now provide to the community.”

The capacity crunch

Regardless of day-to-day operating expenses, Southwest Florida’s public institutions are facing serious long-term capacity issues. That’s because the state depends on its Public Education Capital Outlay (PECO) program to fund new buildings, garages and other infrastructure projects. PECO money comes from a tax on the sale of utility services, which has been shrinking, and not from the state’s general operating funds.

Under the state constitution, PECO funds are dedicated to public education capital projects, including the K-12 system, charter schools, Florida College System and State University System.

“We have seen a drop of 60 percent for all state universities,” says Brogan, referring to 2010 PECO funding authorized by the Legislature. “The capital dollars for FY 2011-12 probably will be in the $100 million range, which is one-sixth of the $600 million allocated to the state university system at a high about four years ago. Until Florida recovers economically, it is doubtful we can significantly grow to meet demand.”

But there is some reason for optimism down the road, Brogan adds. Noting Gov. Scott’s ambitious jobs plan, he says, “If the 700,000 jobs in seven years plan stays on track, then the revenue streams that contribute to PECO budget allocations and forecasts will increase. Then, the Legislature won’t be as hamstrung as they are this year.”

Meanwhile, SCF, USF and particularly New College will continue to face infrastructure challenges.

New College of Florida did not receive sufficient funding for administrative operations from the Legislature after it was separated from USF and won independent status in 2001, says Martin. The Florida Board of Governors’ 2011-12 Legislative Budget Request focusing on the New Florida Initiative includes $1.5 million to allow New College to complete the start-up of academic and administrative operations, Martin adds. “However, we understand that the odds of being appropriated new recurring funds in any amount in FY 2011-12 are not good.”

Is there a solution?

With the state’s budget woes likely to continue for at least another year, Sarasota’s business community may play an increasingly important role in ensuring the health of the region’s public colleges and universities.

“Our business leaders and community philanthropists are the best,” says SCF’s Probstfeld. “In addition to generous scholarships, our students and professors rely on them to fund some state-of-the-art classroom equipment and technology. There also are partnership opportunities in workforce development through our noncredit division.”

Guilford adds that there are many opportunities for local businesses to support USF Sarasota-Manatee. “Programs can be endowed, new programs can be funded, and local businesses can tell our legislators how devastating these cuts would be for the institution and the community.”

Holcombe points out that each Florida state college has an industry advisory committee to discuss local employment needs and the job market. “The most important thing the business community can do is to be sure our local programs provide what employers need,” he says. “We are partners in preparing the workforce

of tomorrow.”

Private Matters

Different pressures for our private universities.

The region’s private colleges and universities face a different set of financial pressures in today’s challenging economy than their public counterparts. To continue growing, they need to offer programs that appeal to students who can afford to pay higher tuition rates while keeping close tabs on the changing financial aid picture.

“Competition is increasing throughout higher education, particularly for the adult student,” says Linda Johnson, director of the Eckerd College Program for Experienced Learners (PEL), Sarasota Center.

Currently, one of the greatest challenges facing private universities is the U.S. Department of Education’s proposed gainful employ-ment rule, which would require for-profit insti-tutions to demonstrate that graduates’ annual loan payments will not exceed 8 percent of their starting salaries.

Scheduled to go into effect in July 2012, the controversial rule was enacted following complaints about aggressive sales tactics being used by some trade schools and other private institutions. The law was designed to be sure that students can make enough money in their jobs to pay back their student loans.

Private colleges are protesting. “Under the proposed rule, a program’s eligibility for financial assistance is determined under a series of arbitrary and poorly researched metrics,” says Sandra Wise, campus president of Argosy University, Sarasota. “It would limit educational and economic opportunities for millions of Americans.”

No matter what Washington decides, the region’s private colleges and universities expect to continue to increase their enrollment and add new programs. For instance, Argosy University is launching a new master of public administration (MPA) program.

“We will be working with governmental and nonprofit agencies to help administrators sharpen their professional skills,” Wise says. “In the past few years, we have seen significant growth in our undergraduate programs in business, criminal justice, liberal arts and psychology. At the graduate level, we continue to see growth in business, mental health counseling and forensic psychology.”

This spring Eckerd College will relocate its Sarasota PEL program from Ringling Boulevard to the Cooper Creek area near I-75 and University Parkway.

“In addition to our baccalaureate degree offerings, our new location will provide opportunities to offer lifelong learning programs, community seminars and leadership and business training programs for area businesses,” Johnson says. “We anticipate our enrollment will continue to grow.”

In recent years, enrollment has been rising by about 10 percent annually on Keiser University’s Sarasota campus. “We’re seeing strong demand for allied health careers, such as nursing,” says Belinda Keiser, vice chancellor of community relations and student advancement at Keiser University. “In 2011, we will be offering a sports medicine and fitness technology program.” Enrollment is also up in Keiser’s culinary and teaching programs as well.

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