State warns YSU of $7M aid cut

By Harold Gwin

The university had expected a $3.2 million drop in state aid, but it may be worse.

YOUNGSTOWN — The Ohio Board of Regents says Youngstown State University could lose $7.4 million in state aid the university was expecting this year, unless the state can resolve its budget crisis by Dec. 31.

The loss would amount to an additional $7.3 million for fiscal 2010-11.

The potential loss of $7.4 million in the middle of the budget year is something the university hadn’t anticipated when it put together the 2009-10 budget, said Thomas Maraffa, senior assistant to the president.

Eric Fingerhut, Ohio’s chancellor of higher education, said the state biennial budget is facing an $851 million shortfall due to a court ruling that eliminates revenue projected from the introduction of video-lottery terminals at Ohio racetracks.

Gov. Ted Strickland has proposed covering that shortfall by delaying the implementation of the final year of a five-year planned reduction in the Ohio personal-income tax. His plan has passed the House and is pending in the Senate, Fingerhut said.

If it doesn’t pass by Dec. 31, the solution Strickland proposes will be lost, and the governor has indicated he will begin making reductions in state support for education Jan. 1, Fingerhut said.

The bottom line is that every state college and university will lose 15.6 percent of its anticipated state aid in the current fiscal year and about 15 percent again in 2010-11, according to the board of regents.

It is hoped the state will resolve the budget issue and those cuts won’t be necessary, Maraffa said. If cuts are made, the university will engage in a planning process to deal with the drop in revenue, he said, adding that no plans are in place at this time.

In July, YSU’s board of trustees enacted a 3.5 percent tuition increase ($235 per year) for undergraduate students this fall in anticipation of what were expected to be state funding reductions of $1.2 million this year and $4.9 million in 2010-11.

The tuition change was expected to produce $2.7 million in additional revenue this year, with the bulk of that money placed in a contingency fund to help offset the larger drop that had been anticipated for next year.

A jump in enrollment combined with the tuition increase brought nearly $8 million in additional tuition and fee revenue to the university, according to a 2009-10 budget revision being considered by the trustees today.

That revision shows $3.2 million of that money’s being used to offset a drop in state appropriations this year that the university already knew was coming. The university had expected $50.2 million in state aid when it enacted the budget but soon learned that aid would be reduced to $46.9 million.

An additional $2 million of the new revenue will go into a contingency-reserve fund, and $1.8 million will be used to cover an enrollment-growth incentive to be paid to members of the Association of Classified Employees union. An additional $220,000 will be used to cover temporary faculty salaries for people hired as a result of the enrollment growth.

An additional $650,000 is being earmarked to cover increased fringe-benefit costs.

There has been no talk about tuition and/or fee increases at YSU for 2010-11 at this point. The state has directed that public colleges and universities limit any increase to 3.5 percent.

gwin@vindy.com