Testimony

on the 2010-2011 Executive Budget 

Presented to 

Senator Carl Kruger, Chair

Senate Finance Committee

and

Assemblyman Herman D. Farrell, Jr., Chair

Assembly Ways and Means Committee  

By 

Phillip H. Smith, Ph.D.

President 

January 27, 2010

Chairman Kruger, Chairman Farrell, distinguished members of the Senate Finance and the Assembly Ways and Means Committees, thank you for providing United University Professions (UUP) this opportunity to comment on Governor Paterson’s 2010-2011 Executive Budget.

I am Phillip H. Smith, President of UUP, the largest higher education union in the nation. As NYSUT’s largest higher education local, we represent more than 35,000 academic and professional faculty at the State University’s state-operated campuses and at its public teaching hospitals and health science centers. We serve hundreds of thousands of students and patients in every region of the State.

This has been a difficult year for our State and for the State University. The severity of the State’s fiscal crisis can not be ignored. Unfortunately, the disproportionate impact of that crisis on SUNY’s academic programs and student services is equally severe.

SUNY has already lost a significant percentage of its State funding – a much higher percentage than any other State agency or, for that matter, any functional program area.

SUNY has given up a recurring annual reduction in State support of $410 million since 2008-2009.

Now, the Governor proposes to reduce State funding for SUNY’s state-operated campuses and University-wide programs by an additional $118 million.

If this proposal is not rejected, SUNY will have to absorb over $528 million in accumulated State funding reductions.

This represents over 25% of SUNY’s current annual operating budget. It also means that the cuts to SUNY will account for over 25% of the total State agency spending reductions imposed by the Governor during the past two years.

If the $118 million reduction proposed in the Executive Budget is enacted, SUNY will have $80 million less in State support next year than it had in 1990. This is an amazing, and very troubling, statistic since enrollment grew by more than 40,000 students over much of that timeframe.

In face of historic enrollment growth, it is not reasonable to expect SUNY to adjust to spending reductions of this magnitude – especially over such a short period of time. In fact, it has not. The campuses are still reeling from the original mid-year reductions in 2008-2009.

Throughout the University, full-time faculty continues to be depleted. From campus to campus, courses are being cancelled, class sizes are at levels never before experienced, students are forced to compete for required courses, and more and more students are not able to graduate on time.

Students and their families are now paying over ¾ of a billion dollars more in tuition this year than 10-15 years ago. Not one dollar of that enormous increase was available to stem the loss of full-time faculty.

Simply stated, if the ratio of full-time faculty to students this year was equal to the ratio that existed in the early 1990’s, SUNY would have over 2,300 more full-time instructors than is now the case.

Even if the ratio that existed as recently as 2005 had been maintained, over 1,000 more full-time faculty would be teaching our students today.

Access has become a systemwide issue and a statewide concern. If this situation continues, not only will the quality of education provided to our children further deteriorate, but we run the very real risk of disenfranchising applicants from low and moderate income families. Families such as these will not have an equitable opportunity to compete in an environment of restrained enrollment growth and recession.

The Governor’s proposals to grant SUNY the unilateral authority to raise tuition, including differential tuition, will only exacerbate this problem. As you know, SUNY is already turning away tens of thousands of qualified high school graduates. If further spending reductions are enacted, we can only expect that even larger numbers of potential students will be disappointed next year.

So, the questions remain. Why is SUNY so disproportionately impacted? Does SUNY not provide an essential public service? How do we explain to students and parents that access to our public institutions can no longer be assumed and that academic quality is not what it needs to be?

That is why we urge you to reject the Governor’s proposal to strip another $118 million from what remains of SUNY’s operating budget.

Unfortunately, the Executive Budget also continues the State’s practice of dismissing the need to adequately fund the University’s hospitals and health science centers.

The SUNY hospitals will be required to absorb the full $75 million impact of new mandatory costs and fringe benefits. Since 2007-2008, over $223 million in unfunded and unavoidable spending growth has been imposed on these institutions. This follows a decade of virtually no growth in State support.

We are still in the process of determining the full impact of the Governor’s proposed Medicaid spending reductions. However, it is clear that proposals such as increasing the State tax assessment on inpatient admissions, eliminating the 2010 trend factor and restructuring indigent care reimbursement will further compound the eroding financial situation of these institutions.

The Executive Budget also calls for an elimination of all State funding for the New York State Theatre Institute (NYSTI) and calls upon it to become self supporting. NYSTI provides a unique and invaluable cultural service to our children. We view its role as complimenting the more traditional educational services provided by our public schools. NYSTI will not be able to survive on just ticket sales. It has proven that it deserves State support and we urge you to reject the Governor’s proposal.

Finally, the Governor’s proposed Public Higher Education Empowerment and Innovation Act is not well thought out and, in many respects, deeply flawed.

We have serious reservations concerning proposals to provide SUNY the authority to unilaterally raise tuition without legislative approval, and to enter into contracts, leases, partnerships and joint ventures without either legislative involvement or the oversight of the Attorney General and State Comptroller.

We are also greatly concerned by the elimination of State appropriations for SUNY’s expenditure of tuition, student fees, and other revenues. If this proposal is enacted the accountability for SUNY spending decisions will be greatly diminished. The transparency for SUNY operations will be virtually eliminated.

All this proposal accomplishes is to provide SUNY’s public institutions with the unfettered and unrestricted freedom of its own Research Foundation – an organization that has been challenged for its secrecy many times in recent years.

The Governor’s proposed legislation, in granting SUNY the authority to raise tuition without legislative approval, places a cap on annual across-the-board increases at 2 ½ times the five year rolling average of the higher education price index (HEPI).

This means that SUNY could raise tuition, for example, by 10% next year. Importantly, the authority granting SUNY the flexibility to impose differential tuition is not subject to the HEPI cap or any other limitation.

In effect, this gives SUNY the opportunity to impose exorbitant annual tuition increases far exceeding the HEPI limitation. How can SUNY or the Governor consider this to be a rational or predictable tuition policy.

SUNY’s assertion that flexibility will produce 10,000 new campus jobs and over 64,000 construction jobs is completely unrealistic. In fact, SUNY would have to raise student tuition by $600 or 10% just to compensate for the budget cuts proposed in next year’s Executive Budget. To support 10,000 new jobs tuition would have to be doubled.

In summary, flexibility, at the extremes proposed by the Governor, makes no sense. There are no compelling reasons to warrant the risk of further constraints on access and affordability. We can find no evidence that proposals to avoid appropriations and appropriate governmental oversight are either productive for the University, or its students and faculty. Are they worth the risk of losing any reasonable form of accountability and transparency for SUNY spending and operations?

I will shortly provide the chairs of your respective higher education committees a point by point analysis of the Governor’s proposals. I urge you to work with us to ensure that we appropriately protect our public institutions.

You have been strong advocates for the University and for its students. As always, we will appreciate any help that you can provide in this extremely difficult environment.

Thank you for hearing our concerns.