97-06-06 Trustees: Budget & Other Business TRUSTEES DISCUSS BUDGETS AND FINANCE COLUMBUS -- The Ohio State University Board of Trustees on Friday (6/6) heard a report on the state budget and discussed the capital budget, funding needs and uses, and other items. Trustees get status report on state budget Trustees heard a report on the latest activity on the state budget, which included new money for higher education and another proposal on controversial tuition caps. Higher education got a boost from the Senate, which voted May 29 to add another $99 million to the state’s higher education budget, said William J. Shkurti, vice president for finance. An Ohio House and Senate conference committee will spend much of this month trying to hammer out a compromise bill on state spending. A final budget must be passed by June 30. Of the additional funds from the Senate, a proposed $70 million would go toward instructional subsidies at the state’s public universities and colleges. But each institution would receive a guaranteed subsidy increase of at least 3 percent during each year of the biennium, regardless of enrollment growth. The subsidy formula is based on enrollment figures. At Ohio State, the new dollars would provide an additional $4.8 million in fiscal year 1998. The University’s subsidy would be $297.3 million. In fiscal 1999, the Senate would provide Ohio State with $6.4 million more than the House, for a subsidy of $306.2 million. An $11.2 million subsidy increase would be very helpful, Shkurti said. “We appreciate the Senate’s action,” he said. “The University would like to be able to increase supplies and equipment budgets for the first time in seven years.” This would be in addition to focusing dollars on student needs, such as academic enrichment, academic and career counseling and computing technology, Shkurti said. But the new performance-based funding initiatives that formed an important foundation for the Board of Regent’s budget request did not fare as well in the Senate proposal, trustees were told. The performance initiatives had been advanced by the Higher Education Funding Commission, a coalition of higher education officials and government and business leaders. The Senate proposed a virtual elimination of controversial tuition caps, allowing for fee hikes of up to 8 percent for general use, and in excess of 8 percent if the additional increment is used for undergraduate financial aid. The House had proposed criteria -- which Ohio State met -- would allow certain institutions to be exempt from the 4 percent cap proposed in the executive budget. The conference committee will iron out a compromise on tuition caps, Shkurti said. The Senate proposed additional funding for agricultural line items -- Cooperative Extension Service and the Ohio Agricultural Research and Development Center -- of $2.6 million in the first year of the biennium and $3.7 million in the second. Vice provost explains need for state support In response to a question by trustees, Edward J. Ray, senior vice provost, explained what the university would be able to do with additional state support that it can’t do now. Ray enumerated six areas that are in need of additional funding: -- Academic enrichment. This is the mechanism the university uses to fund competitive proposals from colleges and departments for new or enhanced academic programs, Ray said. These include courses in emerging disciplines, courses that cross disciplines and honors courses. Since state support for instruction is based on statewide averages and historical patterns, it does not meet needs for new or emerging areas of knowledge, Ray said. “For example, honors courses are immensely popular with our best students, but cost on average twice as much per student as non-honors courses,” he said. “The university traditionally has funded academic enrichment by reallocations from existing budget lines,” Ray said. “While we will continue to do so, funding shortages have made this more and more difficult.” An additional $1 million from the state would match the university’s commitment to this program, which, in turn, would “allow us to increase honors offerings for Ohio’s bright young scholars and new offerings for all of our students without additional increases in tuition,” Ray said. -- Integrated computing technology. Ohio State is lagging behind its competitors in offering students up-to-date technology in classrooms, laboratories and residences, Ray said. An additional $1 million or $2 million in additional continuing funds from the state would allow the university to move forward in that area without adding any new or increasing computer fees for students. -- Improved student services. The university also is lagging behind its competitors in funding support for improved student services outside the classroom, Ray said. These services are such things as career and academic counseling. During the last two years, those needs have been funded from a set-aside of 1 percent of undergraduate tuition increases. “An additional $1 million in state support would allow us to continue or enhance those improvements without the need for corresponding tuition increases,” Ray said. -- Research. During the last 10 years, the university has increased the federal dollars brought into Ohio by more than 50 percent, but the competition for research dollars is growing increasingly intense, Ray said. The university needs an additional $1 million to $2 million a year to invest in renovated facilities, equipment and other elements of support packages for competitive research, he said. -- Student information system. Upgrading the university’s out-of-date student information system is critical to reducing the run-around for students, Ray said. “The problem is that such a massive overhaul will take an investment of at least $5 million to $10 million a year for a three- to five-year period,” Ray said. “The university funded an upgrade to the accounting and human resources system by taxing academic and support units, but these units can’t fund a second tax and still accomplish their missions.” -- Facilities. “Instead of building more facilities, the university needs to take better care of the facilities it has,” Ray said. But the university is backlogged on deferred maintenance and estimates $500,000 to $1 million a year for five years is needed to catch up, he said. An annual $7 million to $12 million from the state would meet these outstanding needs, Ray said. Trustees set to consider capital budget recommendations Trustees got a first look at fiscal year 1999-2000 capital budget recommendations. The board will vote on the proposal at its July meeting, and the recommendations must be submitted to the Ohio Board of Regents in August. Funding for basic renovations was the first priority, and was recommended at $15.6 million. The university uses those funds as the primary source to help pay for its deferred maintenance problems, an area that has been deemed a high funding priority by the trustees and other university officials. “Projects of this nature add no additional space, save operating dollars, often address health and safety concerns, and are our most critical unmet need,” said William J. Shkurti, vice president for finance. “Basic renovations enhance program excellence and research productivity in many departments and across many disciplines.” Recommendations were made for $87.9 million in projects, including phase one of a physical sciences building ($20 million), renovation of Hagerty Hall ($18.5 million), completion of the Heart and Lung Institute ($5.4 million), replacement of Sisson Hall ($17.6 million), and a building for the School of Architecture ($9 million). The Physical Sciences Research Building will house the Department of Physics in a $50 million facility on the site of the Welding Engineering Laboratory on West 19th Avenue. The renovation of Hagerty Hall is made possible by the move of the Fisher College of Business to new facilities, which opens the prime space facing the Oval. Recommendations are for the College of Humanities to use the facility to consolidate all its language instruction into an international gateway, Shkurti said. The $5.4 million for the Heart and Lung Institute, on the site of Upham Hall on West 12th Avenue, will allow that project to be completed on schedule. An additional $6.3 million will be paid by the College of Medicine for two additional floors for anticipated research growth. The replacement of Sisson Hall is necessary to improve the poor condition of space for the College of Veterinary Medicine and to meet accreditation requirements, Shkurti said. The new building for the School of Architecture was partially funded in the previous capital budget, but $8 million was transferred to speed up construction of the Heart and Lung Institute project when it became clear that the funds could not be spent during this biennium. The project, funded in part by a $10 million gift from alumnus Austin E. Knowlton, could be completed by 2000. It will be built on the site of Ives Hall and will free the site of Architecture’s current home at Brown Hall for other uses. Another $17.4 million was recommended for several other projects, including supplemental renovations, demolition of Vivian Hall, planning for renovation of Page Hall, the Botany and Zoology Building, Larkins Hall and Robinson Laboratory, and replacement of barns at Don Scott for the College of Food, Agricultural and Environmental Sciences. Since the state has not decided how much to allocate each institution, the dollar amounts for projects may change, but their priority rankings will not. Each project was ranked based on: -- Academic priority, including its relation to the university mission, program excellence, student demand, research productivity and opportunities for cross-disciplinary collaboration. -- Physical need, including the condition of existing space and unmet health and safety requirements. -- Financial feasibility, including the likelihood of state support, cost-sharing by the requesting unit and the net impact on operating costs. -- Physical feasibility, including other commitments, timing and staging issues and impact on other needs. The recommendations were made after a nine-month study by the Space Facilities Commission. Other business In other business, trustees: --Heard a report from David Williams, vice president for student affairs, on issues that will be addressed by the Office of Student Affairs in the coming academic year. Williams said an additional staff member has been hired to coordinate continued implementation of recommendations from the Committee on the Undergraduate Experience in order to continue to enhance the student experience at Ohio State. He said efforts were under way to make the student experience more personal, including improvements to student orientation and adding more activities to welcome students to Ohio State during the first week of fall quarter. -- Heard an annual report on multi-year commitments from the budget. The report included a review of funding sources. -- Began to discuss giving University Hospitals the flexibility to operate an accounts payable system that is separate from but integrated with the university’s system. -- Heard a quarterly report on the status of the current funds budget. -- Approved an interim budget to continue funding at the 1996-97 level from the July 1 beginning of the new fiscal year until trustees’ approve a current funds budget for 1997-98 at its July meeting. -- Approved a new name for the College of Human Ecology’s merged departments of Home Economics Education and Family Relations and Human Development. The new name is the Department of Human Development and Family Science. -- Approved renaming the Department of Classics as the Department of Greek and Latin. Administrators say the new name reflects the addition of Modern Greek language and literature programs to the department’s curriculum. # Contacts: William J. Shkurti, vice president for finance, (614) 292-9232 Edward J. Ray, senior vice provost, (614) 292-5881 David Williams, vice president for student affairs, (614) 292-9334. Written by David Bhaerman, University Communications, (614) 292-8422 [Submitted by: Von Vargas (vargas.12@osu.edu) Fri, 6 Jun 1997 15:59:24 -0400 (EDT)] All documents are the responsibility of their originator.