Budget cuts would hit UH's 'heart of system'

By Beverly Creamer
Advertiser Education Writer

University of Hawai'i financial analysts are expected to tell the Legislature today that proposed budget cuts would devastate the system, resulting in a loss of classes, faculty, students and programs on every campus while costing the state millions of dollars in lost wages, sales and tax revenues and hundreds of jobs.

"It's already a system struggling to get on its feet after a decade of cuts," said Paul Costello, UH vice president for external affairs. "Cuts like this would go to the heart of the system. It would be like another hurricane, with an impact for decades to come."

Responding to a legislative request to project the effect of 3 and 5 percent budget cuts, internal UH documents show such cuts would reduce access to higher education for many lower-income students, postpone graduation for many in the system, and jeopardize accreditation of some of the most prestigious colleges, including medicine, architecture, law and engineering.

In making the projections, UH Chief Financial Officer J.R.W. "Wick" Sloane is expected to tell lawmakers today that cutbacks of 3 percent would mean the loss of 487 jobs statewide, and cutbacks of 5 percent would eliminate as many as 815 jobs.

Across the 10-campus system, a 3 percent cutback would mean a loss of at least 1,600 students, and a 5 percent cutback would mean a loss of 3,480 students. That translates to an economic hit to the state of $42.2 million at 3 percent and $71.3 million at 5 percent, UH backers say.

"I recently talked to the head of athletics at Hilo, who said, 'We're broke now. I don't know where to go or what to do,' " Costello said.

Hawai'i ranks last among the states in money for higher education, Sloane said.

State money for higher education has increased an average of 59 percent nationally, and 2.9 percent in Hawai'i.

In analyzing the effect on the Manoa campus, internal documents show that cuts of 3 percent would mean:

• Reduction in enrollment by 610 students and $2 million in tuition revenues because of the loss of lecturers, graduate assistants and temporary/untenured faculty who teach nearly a quarter of total semester hours.
• Cancellation of certain courses and classes (no numbers available).
• Temporary or untenured research faculty not retained.
• An approximate loss of $7 million in extramural grants.

Looking at the trickle-down effect, a 3 percent budget reduction would cost the state $23 million in business sales; $16.4 million in employee earnings; and $2.8 million in state tax collections.

A 5 percent cut would go deeper:

• Jeopardizing accreditation of key programs because they would no longer meet minimum faculty-student ratio requirements.
• Reducing enrollment by 1,016 students and $3.5 million in tuition revenues, with an estimated loss of $11.5 million in grants.
• Eliminating tenured faculty positions over several years.

The trickle-down effect on the state's economy would include a $38.4 million loss in business sales; a $28.2 million reduction in employee earnings; and a $4.7 million decrease in state and local taxes.

The smaller campuses and communities are likely to suffer more directly.

The West O'ahu campus, for instance, would have to lay off employees under either scenario, and also be at risk of losing accreditation by not being able to meet academic program requirements, according to the documents.

In Hilo, a 3 or 5 percent cutback would mean an increase in the Big Island's unemployment rate; an economic loss of $1.5 million in spending (3 percent scenario) or $2.6 million (5 percent); a hiring freeze; layoffs of administrative and clerical support staff; and the loss of 175 students and 115 classes (3 percent cut), or 300 students and 195 classes (5 percent).

The community colleges would be hit especially hard, as losing courses would affect access to college for many students, limiting upward mobility for those at lower socioeconomic levels.

• With a 3 percent cut, about 220 classes would be eliminated.
• With a 5 percent cut, around 590 classes would be eliminated.

The documents suggest that one way to offset general fund reductions would be to increase tuition at the community colleges.

"This is not a preferred alternative," the analysis said, noting that an increase would contradict the primary mission of the community colleges as open-door, low-tuition institutions committed to providing all residents with access to a quality post-secondary education.

Another alternative would be to reduce need-based tuition waivers and nonresident tuition differentials for Pacific Island students and those from Asia and Pacific Rim countries.

Those students would then need to find other forms of financial aid or lose the opportunity to go to school.

Or, the Legislature could pay direct state scholarships to financially needy students.

Reach Beverly Creamer at bcreamer@honoluluadvertiser.com or 525-8013.