The University of Akron will make up for a loss of $15 million in state aid this year by enrolling more students and charging them more.
UA’s Chief Financial Officer David Cummins told the board of trustees Wednesday that the 3.5 percent hike in undergraduate tuition OK’d in June and an expected increase of 3.5 percent in student credit hours will cover the 14.3 percent reduction in state support, one of the largest in recent UA history.
“We’ll watch our budget very closely,” he promised trustees. “We always do.”
Trustees approved a $391.4 million general fund budget that is about $15.5 million — or 4 percent — bigger than last year’s.
This year’s budget includes a $2 million increase in benefits — primarily group insurance and retirement — that will bring the total cost to $60 million. UA will spend $2.6 million more on scholarships, bringing the total expenditure to $39.3 million.
Payroll — the single largest chunk of UA’s expenditures — will grow 4.5 percent from $156.6 million to $163.6 million.
The university also will balance the 2011-12 budget with $8.4 million of the $20 million it saved last year, when expenditures were below budget and revenues above it.
In addition, it will make $6 million in permanent budget reductions in everything from utility rates to banking fees.
“We’ve pushed for some underspending and the campus community has been pretty responsive,” Cummins said.
He told trustees that the cost of higher education has “continually and dramatically” shifted from the state to students over the last dozen years.
In 2001, about 45 percent of UA income came from tuition and fees and 48 percent from the state. This year, students will pay 69 percent and the state 23 percent. The balance of revenue comes from investments, departmental sales and the like.
At the same time, UA’s general fund has grown from $208 million in 2001 to $391.4 million this year.
Part of the growth in the general fund is debt service, which has increased from $2.3 million in 2001 to $14 million this year.
That represents less than half of UA’s debt service for campus improvements, though. The university also runs nine auxiliary services that in some cases are self-funded and that also are paying $24.6 million in debt service a year. That brings total debt service universitywide to $38.6 million.
The state did not approve a capital budget for tax-supported universities in the coming biennium so UA does not expect state aid for construction through 2012-13.
Cummins said after the meeting that the university is in “decent shape.”
“But we need to keep that $8.4 million [in the one-time transfer of funds left over from the previous year] top of mind,” he said. “We need to think of ways to hone in our budget.”
Carol Biliczky can be reached at email@example.com or 330-996-3729.