U of S faces shortfall after 2.3% provincial budget hike

While Saskatchewan’s universities did better than most sectors in Finance Minister Eric Cline’s March 27 provincial budget, their 2.3-per-cent operating grant increase still leaves the U of S short of being able to pay for its ongoing programs.

As a result, decision-makers at the University will be scrambling for the next two weeks trying to find ways to balance the books for 2002-03.

Despite that, U of S President Peter MacKinnon and Vice-President Academic & Provost Michael Atkinson say the provincial government has done an admirable job of at least keeping universities a relatively high priority in the budget – giving them a 2.3-per-cent raise while most areas received no increase or budget cuts.  Only Health did better than universities, getting 5.8 per cent.

U of S Associate Vice-President of Financial Services Laura Kennedy says, “When the Operations Forecast was submitted to the government, we had asked for a 5.7-per-cent increase just to cover ongoing operations – things like salary settlements, library costs, utilities, and new-building operating costs,” Kennedy says.

She says the budget’s 2.3-per-cent increase “leaves a gap between what we need and what we’re getting.  Over the next couple of weeks we have to figure out how to address that shortfall.”

Atkinson agreed, saying 2.3 per cent “falls far short of the needs we have – and if that isn’t tough enough, we also have major projects we’re trying to initiate”, such as a costly new computerized student information system and a major fundraising campaign.

“If we don’t do these things, we’re going to be left behind other universities.  It puts us in a very difficult financial bind,” Atkinson says.

Officials say the U of S won’t rely on increased student tuition fees to fill the gap, but will look at a variety of possibilities, such as other sources of revenue and efficiencies that could be found in departments and units across campus.  The policy on tuitions is not to use them to make up budget shortfalls, but rather to get them to national norms, and some Colleges’ tuitions are now near those levels.  As a result, President MacKinnon has suggested any general tuition increases this year will be well below the 15-per-cent hikes of last year, although there could be fair-sized increases in certain professional Colleges.

The Finance Committee of the University’s Board of Governors will get a preliminary look at the administration’s budget plan April 23, and the formal budget will be finalized by the Board May 10 and announced later that day.

The President’s Executive Committee, the Dean’s Council, Administrative Council, and the Budget Committee of University Council will be involved in the deliberations.

Finance Minister Cline announced the whole Dept. of Learning – including universities, colleges, technical institutes, and K-12 schools – will get $1.2 billion for 2002-03.

Kennedy says the U of S expects it will receive a total grant of about $150 million from the province.  This reflects the 2.3-per-cent operating grant increase as well as funding for previous commitments including $594,000 for more students in Nursing, $500,000 for more students in Medicine, and $390,000 for the School of Physical Therapy (which was formerly paid from the Health budget).

In addition, the U of S expects to receive a significant portion of $3 million being granted under the new Saskatchewan Universities Funding Mechanism, which is adjusting the allocation of funding among the U of S, the University of Regina, and the three federated colleges.  2002-03 is the final year of phase-in of this new funding model which will provide for operating grants to Saskatchewan’s two universities and federated colleges based primarily on their teaching and research activities.

This year’s provincial budget also includes a new method of funding school and university capital construction projects.  It establishes an Education Infrastructure Financing Corporation, a new Crown corporation that will lend the money for capital construction to each educational institution.  That will represent a debt for the institution, and each year the government will provide capital grants to enable the university or school board to make its payments on that debt.

Kennedy says last year the U of S got $21.4 million for capital spending on projects like the new Kinesiology Bldg. and the addition and renovations to Thorvaldson.  She says it’s unclear exactly what amount it will get for capital projects this year, but if the proportional allocation from past years is used, the University expects it will be about $31 million.

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