The University of Hawaii plans to ask lawmakers for an additional $54 million to help cover operations next fiscal year, with the bulk of the funds needed for faculty salary increases already on the books, school officials said Friday.
Part of the request also includes $250,000 to help lift Manoa’s athletics program out of the red.
The budget request would be on top of the approximately $385 million in general funds legislators approved for UH last session for the upcoming 2014-15 year. The Legislature, which enacts two-year budgets, will take up the so-called supplemental state budget in January.
UH is seeking $33.5 million for faculty pay increases tied to its six-year contract with the University of Hawaii Professional Assembly: $14 million for multiyear salary restorations and $19.5 million for 3 percent raises this year and next year.
Lawmakers have chosen not to fund the salary costs the past two years and have told UH to instead fund them with tuition.
"We are hoping that is something that is correctable," UH Chief Financial Officer Howard Todo said Friday at a Board of Regents finance committee meeting.
He added, "That is a large issue for all of our campuses because those are funds, that $14 million, we are paying already out of tuition."
If lawmakers agree to fund the UHPA salary costs, UH wants to put the freed-up funds toward a plan it says can eliminate the university’s massive repair and maintenance backlog.
"The administration is proposing we ask for $14 million we think UH should get because of the UHPA situation, but to cement that case, we’re wiling to commit it to something we know is a high priority," said UH interim President David Lassner.
State Sen. David Ige, chairman of the Senate Ways and Means Committee, previously told the Star-Advertiser that he’d be open to hearing UH’s pitch to eliminate the repair backlog.
Repair needs across the 10-campus system total $487 million, with 84 percent of that — $407 million — on the 107-year-old Manoa campus.
The plan calls for issuing revenue bonds to tackle the backlog over several years and repaying the debt with tuition revenue over 30 years.
UH estimates it can use the "freed up" $14 million to fund about $212 million in revenue bonds in the first year of the plan. The university would need approvals from both the Legislature and the governor to float the revenue bonds.
The $212 million could then be used to eliminate the existing deferred maintenance backlogs at UH-Hilo and the seven community college campuses, with about $135 million left over to start making repairs at Manoa. (UH-West Oahu’s new campus has no backlog.)
UH is looking at issuing more bonds over four, six or 10 years to cover the rest of Manoa’s repairs.
Some regents have concerns about the impact of devoting a large chunk of tuition revenues — about $28 million annually — to debt service over the life of the bonds.
"I think we’re all in agreement: We want to find a way to do this," said regent Jan Sullivan, chairwoman of the Budget and Finance Committee.
She recommended the committee advance the overall budget request to the full Board of Regents, which next meets Oct. 17.
But she imposed five conditions on the administration’s revenue bond plan, including "verifying (it) will be structured so as not to contribute to further increases in tuition" and providing various "projections over the life of the bond issue to analyze how the debt will be covered to avoid future impacts to the delivery of academic services."