Volume 12, Number 15 April 1, 2005

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Latest provincial budget meets funding expectations

Total operating funds near $280 million

Special grant buys one-year tuition freeze

By Lawrence McMahen

The U of S is happier with the Calvert government’s March 23rd budget than it has been with provincial budgets for many years.

The combination of the University’s realistic expectations this year and the move in Finance Minister Harry Van Mulligen’s budget to help students avoid a tuition increase means the U of S will receive from government what it forecast for increases in its basic operating grant and tuition revenue for 2005-06.

budget 2005-06

With higher-than-expected oil and gas revenues and transfer payments from the federal government, the province announced a balanced $7.15-billion budget, with increased spending on health and education – to $2.9 billion for health and $1.2 billion for the education sector. Van Mulligen announced there will be no tax increases, education property taxes will be reduced, there will be more capital funding for schools and universities, and the government will pay for a one-year tuition freeze at the two universities.

The budget includes a two-per-cent, or $4.7-million, increase in basic operating funds for the two universities and federated colleges, and the $6.7-million Saskatchewan Centennial University Tuition Grant, which will allow the institutions to hold off on planned tuition hikes.

Laura Kennedy, U of S Associate Vice-President (Financial Services), says this two-per-cent operating-grant hike means an additional $3.2 million for the University – to $160.3 million in 2005-06, up from $157.1 in 2004-05.

The special tuition grant to the U of S is expected to be $3.3 million, taking its total projected tuition-related revenue to about $87 million in the coming year. When other operating funding such as $11.22 from other governments for the Western College of Veterinary Medicine (WCVM) and investment and sales income are added, the basic U of S operating budget will total about $280 million, $12 million higher than last year’s $268 million.

Included in the projected revenue is a provincial grant of $3.8-million to help the College of Medicine address the staffing and program issues that currently have it on probation with national accreditation bodies. This is in addition to $3.5 million which was provided for this purpose in last year’s budget. The accreditation funding will also enhance health sciences services provided by the U of S Library.

The government is also adding $640,000 for an addition of student seats in Nursing.

In its Operations Forecast last fall, the University estimated it would receive a $3.3-million, or 2.1-per-cent, increase to its operating grant from the province for 2005-06, and that under its “national-norm” tuition policy it would likely hike undergraduate tuition fees by an average four per cent, adding an additional $3.02 million in revenue.

For capital construction, renewal and equipment funding, the provincial government is again granting the U of S permission to borrow up to $4.7 million.

Kennedy says use of the ‘borrowing room’ provision requires approval of the University’s Board of Governors, and the Board has in the past expressed its concern about the sustainability of this approach as a viable financial strategy for the long term. It is concerned about the risk of having to assume the obligation for future principal and interest repayments, and with the restrictions this policy may place on future capital grants.

In addition, in March the University received a special payment of $19.48 million for capital, sufficient to fund the cash capital grant for two years, 2005-06 and 2006-07.

The cash grant of $9.74 million plus the borrowing room of $4.7 million brings the total annual capital funds to $14.44 million, which is the level the University has been at for several years.

Kennedy notes the government also announced earlier it will provide $15 million towards the major addition planned at the WCVM – $7.5 million was paid in March and another $7.5 million is expected in 2006-07.

U of S President Peter MacKinnon issued a statement following the budget saying it’s “a welcome recognition of the need to invest in post-secondary education if Saskatchewan is to grow and prosper”.

He said he hopes the funding “is a vote of confidence in the direction of the U of S and our responsible fiscal management”.

MacKinnon added that the one-time tuition-related grant “will allow us to make a recommendation to our Board of Governors that no tuition increase be assessed for the vast majority of our students in the coming academic year”.

The president said the grant isn’t a long-term solution to access and affordability for students, and he’s glad the government also announced a Student Financial Assistance Review. He said one-third of the $100-million the University hopes to raise in its 2003-07 fundraising campaign will go to student scholarships and bursaries. But he added that while funding for students is important, another way to increase access to high-demand university programs is to provide the funding so the programs have the faculty and space to admit more students.

U of S Students’ Union President Gavin Gardiner said the Centennial Tuition Grant was a victory for students who have been rallying for a tuition freeze. But Gardiner said it’s not enough: “There is no long-term commitment, and we view this as the first step towards retooling post-secondary education funding in Saskatchewan.”

In late-2003, U of S Provost and Vice-President Academic Michael Atkinson announced the University faced a serious “structural deficit”, a gap between its revenue and expenses.

In its first-ever multi-year budget framework, issued last May, the U of S prepared a plan to grapple with that gap over a three-year period, to 2006-07, including a number of belt-tightening measures across campus.

Kennedy notes the multi-year projections were based on a series of budget measures and changing practices across campus that require achievement of one-time budget reductions of $7.1 million over the three years 2004-05 to 2006-07 and permanent reductions of $6.2 million by 2006-07. In addition, the projections assume salary settlements similar to the provincial pattern.

Working with the latest provincial budget figures, U of S integrated planning and financial officials will prepare the U of S budget to be presented to the Board of Governors for approval at its May 6 meeting.

For more information, contact communications.office@usask.ca

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