Financial cloud hangs over YSU’s future

By Harold Gwin

An additional 3.5 percent tuition increase is still a possibility.

YOUNGSTOWN — The state may have resolved an $850 million budget shortfall that could have cost Youngstown State University some $14 million in state aid over two years, but that doesn’t mean the university’s financial worries are over.

The state had warned earlier this month that the revenue shortfall would reduce its support to YSU by about $7.4 million this fiscal year and about the same amount in 2010-11, but the Legislature was able to work out a budget compromise that covered the potential red ink.

That worry is gone now, but earlier announced cuts in state aid are still coming.

The state already reduced its support to YSU by about $3.3 million in the current budget and has warned that a further reduction of $4.9 million can be expected for fiscal 2010-11.

That situation prompted the university’s board of trustees to raise undergraduate tuition last July by 3.5 percent ($235) for this year, generating about $2.6 million in additional revenue, with much of it being set aside to help cover the bigger drop in state funds next year.

Some board members have indicated a similar tuition increase may be needed next year.

Budget planning and development for 2010-11 have already begun.

Thomas Maraffa, senior assistant to YSU’s president, presented the trustees’ finance and facilities committee with some preliminary budget figures earlier this month, showing that a 3.5 percent tuition increase, coupled with zero enrollment growth, would help produce revenues of $157.8 million in 2010-11.

On the other side of the ledger, “very preliminary” expenditure estimates stand at $156.5 million, showing the university could end the year $1.3 million in the black, Maraffa said.

YSU finances were helped this year by a jump in enrollment of nearly 1,000 students, which netted close to $5.3 million in additional tuition revenue for 2009-10.

That, coupled with the tuition increase, produced additional revenues of nearly $8 million.

Of that $8 million, $3.2 million is being tapped to cover this year’s state shortfall. An additional $1.8 million is being paid to members of the Association of Classified Employees union as an enrollment- incentive bonus tied to the jump in the number of students this year.

In addition, $220,000 will go to pay temporary faculty salaries for people hired as a result of the enrollment growth; $650,000 is being earmarked to cover increased fringe-benefit costs; and $2 million will go into a contingency-reserve fund for next fiscal year.

gwin@vindy.com