The University of Hawaii’s flagship Manoa campus is facing a multimillion-dollar tuition shortfall for a fourth straight year as state support continues to decline while energy and personnel costs escalate.
Manoa officials are projecting a $31 million deficit for the fiscal year that ends June 30, despite efforts to curb spending.
Interim Manoa Chancellor Robert Bley-Vroman, who took the reins Sept. 1, said he is actively seeking ways to cut costs but cautioned that Manoa’s debt could keep growing as the campus re-evaluates its spending priorities.
"Our goal is to fly level for this year, and during this year try to reconnoiter and figure out where we’re going to go in the future," Bley-Vroman told the Honolulu Star-Advertiser on Tuesday. "The university as a whole needs to fly level. I think we can do it. I think it will be tough, and we may see our bank balance decline even more for a while, but we can do it."
He said deans and directors have been asked to restrict spending this year, which might involve halting new hires.
"I know that each individual dean is going to have (to) work on what is best for the dean’s college. There are going to have to be some ways of tightening belts. I think we’ll see different approaches," Bley-Vroman said. "We’ll probably see less new faculty hiring in the future — again, that will differ unit by unit, but I know that’s one thing we’re considering."
Bley-Vroman shared the university’s financial troubles with students and faculty Tuesday while hosting a public talk-story event.
The school brings in about $130 million in net tuition each year, after scholarships and tuition waviers are taken out.
The overspending began in 2012, when the campus incurred a $2.6 million deficit under then-Chancellor Virginia Hinshaw.
UH-Manoa had started that year with a $21 million surplus in tuition revenue but was instructed by UH system administration to spend down some of its reserves for fear that the state might view the surplus as too healthy, said Kathy Cutshaw, Manoa’s vice chancellor for administration, finance and operations. Tuition revenues were subsequently spent on faculty salary restorations, student laboratory space and information technology upgrades.
The shortfall swelled to $17 million and then $26 million in the following two years under then-Chancellor Tom Apple. Those shortfalls were covered by university reserves.
Utility costs ran over budget by a combined $13 million in those years. Among other added costs, the campus also paid out $6.4 million for 3 percent faculty salary increases that it had expected the state to cover, and suffered a $7 million cut from the Legislature, in fiscal 2014.
Manoa’s financial crisis was the chief reason UH President David Lassner gave when he fired Apple on July 30 with three years remaining on a contract.
Lassner said at the time that he was concerned about Apple’s ability to turn things around. He said that Apple’s attempt to save $10 million a year by imposing a hiring freeze and suspending salary increases for nonunion employees came after he had already informed Apple of his decision to terminate him.
Tuition revenue makes up roughly 30 percent of UH-Manoa’s operating income, up from 19 percent five years ago.
Bley-Vroman said revenues haven’t grown fast enough to make up for a sharp drop in state funding in that same time frame.
State funding previously made up 35 percent of Manoa’s operating budget but now accounts for 25 percent — a $61 million difference since 2009.
Some students and faculty suggested trimming expenses in areas like athletics and salaries for system administrators, but Bley-Vroman said the university’s money troubles require more structural solutions.
"There are big forces here, and they have to do with the society’s view of education and who’s going to pay for it. They have to do with energy costs. They have to do with what it means to be a fairly compensated faculty member," he said. "I think those are the issues that are really driving this."
He has assembled a committee — made up of vice chancellors, deans, faculty members and undergraduate and graduate student representatives — to review Manoa’s budget process. The group will begin meeting next week.
"We’ve put a budget committee into place that we hope we can rationalize the allocations system a little more," Bley-Vroman said.
Michelle Tigchelaar, president of Manoa’s Graduate Student Organization, said the group will have a representative on the review committee.
"We expect there’s going to be a little bit of a turf war, with everyone trying to protect their own budgets," she said. "We’re going to have to fight so that the budget gets allocated in a fair way to areas that best benefit the students. If we are paying for a larger part of the pie, we need to get a larger share of the spending."
