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Update: UConn – An additional $1.5 billion in borrowing

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by Jon Pelto from Wait, What?/em>

By adding $1.5 billion in new state bonds on top of the remaining $235 million in UConn 2000/21st Century UConn state bonds, Governor Malloy is proposing an impressive plan to invest in “science, technology, engineering and math programs at the University of Connecticut.”

According to the Hartford Courant, “Malloy emphasized that the investment was needed to improve the state’s economy, which some see as stagnating. He predicted that over the next decade the project would attract $270 million in research grants and $527 million in business activity, as well as supporting more than 4,000 permanent jobs.”

“Quite frankly this investment should have been made 10 years ago,” Malloy said. “If it were made 20 years ago, our economy would be stronger today.”

Malloy’s plan would include $450 million for new science and engineering facilities and $770 million in infrastructure improvement, including a major expansion of UConn’s Stamford campus. The plan would also increase the number of undergraduates attending UConn from 17,000 to about 24,000.

While the University of Connecticut and Connecticut’s other public colleges and universities definitely need more operating support, the Governor proposal overlooks three key points.

First, over the past two years, this Governor has implemented the deepest cuts in state history to the University of Connecticut and the state’s other public institutions of higher education. UConn alone has been hit with over $50 million in cuts. It wasn’t that long ago that the state provided about 50 percent of the funds needed to run the University of Connecticut. As a result of the on-going reductions in support, the state’s share of funding for UConn has dropped below 30 percent. These cuts have translated into program reductions and much higher costs to students and parents. In essence, students are already being asked to pay more and get less.

Second, more recognition should be given to the fact that the state has already invested $2.3 billion in the University of Connecticut through the UConn 2000 and 21st Century bonding program. Those funds have allowed UConn to completely overhaul its facilities. Thanks to those funds, UConn has a new chemistry building, a new biology building, a new agricultural biotechnology building, a new marine science facility, two new engineering buildings, new and renovated facilities for math, physics and material sciences, a new pharmacy building and numerous other new specialized labs and classrooms.

While more facilities would certainly be optimal, what UConn desperately needs are funds to staff the new facilities and create the appropriate teaching, research and service programs that were supposed to go into those new facilities.

As most people recognize, borrowing should be used for buildings, not on-going programs.

However, in this case, while Malloy’s plan moves money around, significant amounts of the new bonding would be used to pay for new faculty members; 1,400 scholarships for top students; 50 doctoral fellowships; and 2,000 grants for students and faculty to launch projects.

Finally, Connecticut already faces significant debt and long-term liabilities that must be paid. In fact, these are liabilities that the state MUST pay off in the next couple of decades. Before adding more debt and liabilities to the state’s books, state officials must take far more aggressive action to increase funding to reduce the existing liabilities. The following chart summarizes Connecticut’s existing debt and liabilities.

Category Amount of State Debt or State Unfunded Liabilities
State Borrowing $20 billion
State Pension Fund $11 billion
Teacher Pension Fund $11 billion
Post Retirement State and Teacher Health Benefits $19 billion
GAAP $1.5 billion
TOTAL $62.5 BILLION

 

UConn definitely needs more funding. A more realistic approach to increasing operating funds would have been a better step forward.

You can read more about Malloy’s proposal via the following links: http://www.courant.com/news/breaking/hc-engineering-uconn-0201-20130131,0,4372437.story and http://ctmirror.org/story/18962/21-billion-plan-uconn and http://today.uconn.edu/blog/2013/01/uconn-state-officials-announce-launch-of-next-generation-connecticut-initiative/

Categories: General

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