State could keep bigger share of tuition hike in 2010 budget; SUNY could see broader cuts

New York state’s fiscal situation and multibillion-dollar debt is leading it to lift long-standing restrictions on the freedoms of SUNY campuses to allow them to make up for budget cuts.

Gov. David Paterson plans to cut state aid to SUNY campuses by nearly $118 million next year, but he is seeking to offset this with reforms that would give individual institutions greater autonomy and new ways of drawing in revenue.

It is a compromise that James Van Voorst, vice president for administration, says is a trade of funding for “flexibility that’s going to help you work with less.”

Van Voorst said that SUNY already has higher flexibility than any other state agency, but compared to other schools, SUNY is “one of the most controlled.” He noted that this further opening up of restrictions on individual campus actions is an acknowledgment from the state government that SUNY has proved its ability to manage itself effectively.

“Trust is the essential element of this act,” Van Voorst said. “I think that our track record warrants that trust.”

The Public Higher Education Empowerment and Innovation Act, introduced by Paterson on Jan. 19, may do much to help campuses cope with the cuts in funding.

If passed, the legislation would lift restrictions on procedural requirements for campus expenditures and contracts. It would also grant SUNY campuses new independence to enter into partnerships with local businesses, utilize their assets to generate new sources of income and set tuition rates.

For Binghamton University, that means the campus could get started on projects sooner and use its own holdings to generate income — without waiting for approval from the state government.

One way this might specifically benefit BU would be in contracting for new equipment. It would eliminate an extensive approval process and allow BU to “better serve” the faculty and staff to get the equipment and supplies they deserve in a much more timely manner, Van Voorst said.

He said that vendors would also be much more willing to do business with the University because BU would be able to complete a deal or sign a contract much more quickly than before.

“That’s when they’re willing to say to you ‘I’ll give you 10 percent off,’” Van Voorst said, indicating that the new freedoms could even lead to savings for BU.

These new freedoms constitute a loosening of decades-old finance law.

Paterson’s proposal tightens the SUNY coffers through several means. In addition to a general decrease in state funding, Paterson has also proposed to halt the gradual sharing of the money from the 2008 tuition increase.

Under the initial provisions of the law, the state was to keep 90 percent the first year, with 10 percent going back to campuses. Every subsequent year, the state’s take would drop by 10 percent of the total.

This year, campuses were slated to receive 30 percent of the increase, but Paterson plans to suspend the progression. This means that the state may keep 80 percent of the 2008 tuition increase, with only 20 percent returning to campuses.

The budget cuts to SUNY are part of a larger effort to balance the state’s budget. Official state counts put state debt as of December 2008 at $46 billion, which does not include debt owned by state-sanctioned organizations like utilities and transportation agencies. That total is around $140 billion as of December 2008.

State University of New York Chancellor Nancy Zimpher called it “an announcement that rocked our world.”

Just four days later, the governor released his budget proposal, which could reduce state support to SUNY campuses by nearly $118 million.

In her prepared remarks for a joint legislative meeting on the 2010-11 executive budget, Zimpher estimated that “over the next 10 years, these reforms will help SUNY campuses create more than 2,200 faculty and 7,800 campus jobs and invest of $8.5 billion in capital construction, which will support 65,000 construction industry jobs.”