University of Hawaii students may see a smaller tuition increase than expected next year under a proposal being considered by the budget committee of the Board of Regents.

Instead of the 7.5 percent increase now planned over the next two years, students would see their tuition rise annually by only 2 percent in the latest plan to help cover the university’s huge deferred maintenance backlog.

But the proposal does include a big if: It requires the state Legislature to allocate enough funds to pick up rising utility costs and other operating expenses that were going to be paid for by the larger tuition increase.

"We think it’s a reasonable request," said UH President David Lassner. "Sticking with (the 2 percent increase) would require a full buy-in from the state."

Lassner cautioned that if state lawmakers don’t agree to cover all the utility costs, the university would need to fill the void partially or in whole, allowing the university to realize the revenue expected under the original tuition increase.

The board is expected to vote on the proposal in October as part of the university’s two-year budget plan.

In another budget development, UH administrators told the Board of Regents they want to spend $3 million to help cover deficits in intercollegiate athletics. That includes $1.3 million in travel subsidies that the university pays to schools to come to compete against Hawaii.

Lassner said that as the only public university in the state, UH has an obligation to the community.

"These are programs that the community loves, that they expect, especially in this state with no professional sports," he said. "They want to see us, their source of pride in the community."

UH athletic director Ben Jay last month asked the regents for help, saying the fiscal model the department is operating on "is broken," and that the department’s budget deficit could reach as high as $3 million. Jay added that athletics has run at a deficit for 11 of the past 13 years.

"As you’ve heard, UH-Manoa has tried to break even but it doesn’t seem possible," Lassner said Wednesday. "The data suggests that nobody else pulls it off, either, except a handful of wealthy high-profile programs in big TV markets that can generate much more revenue than we can."

Lassner said the university would also be going to the Legislature for help with funding the financially troubled UH John A. Burns Medical School and UH Cancer Center.

Lassner said UH has to do a better job of persuading state lawmakers to help with funding across the board — and especially with the university’s utility bill. Electricity rates have taken a huge chunk out of tuition revenue, he said, saying that the bill has reached $45 million on Oahu alone.

"As the rates have gone up, most of the state’s agencies have received adjustments from the Legislature but UH has not," he said.

Board of Regents Chairman Randy Moore said it would be only fair for the Legislature to give the university an adjustment. He urged Lassner to make his case at the Legislature.

"There are 76 perspectives (in the Legislature). What you’ve got is reasonable," he told Lassner. "We just need 26 in the House and 16 in the Senate."

The board since last year has been struggling over how much to raise student tuition to pay for the university’s repair backlog, which is nearing a half-billion dollars, the majority of which — $407 million — is on the aging Manoa campus.

UH’s controversial plan to divert tuition revenue toward the backlog proved controversial during the last legislative session, and lawmakers ultimately rejected the idea.

The current five-year tuition schedule raised Manoa’s tuition for the fall semester by about 7.5 percent, and will raise it by another 7.5 percent in each of the next two academic years. Some regents have expressed an interest in dialing back the increases in future years and said they were happy to hear the administration’s latest proposal.

Lassner said Wednesday that any tuition increase must be tied to a specific expenditure.

"We’re not increasing tuition because we need more money or because something else happened to us. It must be an actual budget requirement that must be agreed on," he said.

The university last fiscal year collected $362 million in tuition and fees across its 10 campuses — up from $349 million the year before — representing nearly 42 percent of total operating revenues.

The board late last year stopped new building projects with the aim of redirecting resources to the repair and maintenance backlog. But the freeze allows for exceptions such as major projects approved by the regents before the moratorium and modernization projects needed to support academic needs.

It also doesn’t apply to campuses that have no repair backlog, specifically, the new UH-West Oahu campus.

The board on Wednesday indicated it would change its policy requiring six months’ notice to change tuition fees, in case the university does find legislative help for tuition. The policy will be changed to exempt tuition decreases only.