Tag: budgets

  • States Need to Pass Budgets

    States Need to Pass Budgets

    This isn’t unique to my state, but it’s my first time encountering it.

    Pennsylvania’s state government runs on a July-to-June fiscal year, which means that it was supposed to have passed a budget for this fiscal year by July 1.

    It hasn’t passed one yet, and passage doesn’t look imminent.

    This is becoming a problem.

    It’s already a problem for our county, which has announced cuts. And it’s increasingly a problem for the college.

    Based on previous years, we’ve expected the state allocation to cover a little over 40 percent of the operating budget. (The county’s figure is much lower.) So far this year, it has covered zero percent, for a difference of—let’s see, carry the three—millions.

    We have reserves, and they’ve come in handy. But they’re meant to even out cash flow over the course of a year, to cover emergencies and to help with large expenses. They were never intended to supplant the state’s role in the budget. Our CFO recently had to calculate the number of months we could go without the state allocation, which is a number you never want to matter.

    For those keeping score at home, reserves at a community college are very different from endowments at universities. Endowments are generated mostly from a combination of donations and investment returns, and they’re meant to “throw off” a certain amount per year to pay for other things. Those other things can be the operating budget, or scholarships, or facilities, as specified. (Endowment funds are a mix of restricted and unrestricted. Restricted funds can only be used for designated purposes; unrestricted funds are more flexible.)

    Reserves, by contrast, are generated from operational savings and are meant to provide a bit of buffer. They’re almost always invested very conservatively because they’re meant to be liquid. Endowments can take greater risks because they’re intended to have much longer time horizons. If endowments are like retirement accounts, reserves are closer to savings accounts.

    They’re crucial for cash flow because peak revenue times and peak spending times don’t always align. For a college on a traditional calendar, August shows high revenues and low spending, and October shows high spending and low revenues. That’s because students pay tuition in August to take classes in October.

    Reserves can create perverse incentives for legislators. A legislator looking to pay for some other line item closer to his heart may see a public college with relatively healthy reserves as a painless target for cutting. But once reserves are spent, they’re spent, and one of the dangers of public-sector math is that even a single year’s cut can become a new baseline. At that point, climbing out of the hole can become a Sisyphean nightmare.

    In practice, that means that public colleges have to perform a delicate balance with reserves. Save too much, and you become a tempting target. Save too little, and you may find yourself in a tight spot if something happens.

    Right now, something is happening—or not happening, to be exact—with a major impact. The frustrating part is that the something in question is unnecessary. This isn’t the aftermath of a natural disaster; it’s collateral damage from a political standoff. The fact that it leaves us much more vulnerable to, say, a natural disaster doesn’t seem to bother legislators.

    So, my request to the elected leaders of Pennsylvania, and to other states in similar spots: Pass a budget! Reserves weren’t meant for this.

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  • Colleges Expect to Reduce Student Support Budgets

    Colleges Expect to Reduce Student Support Budgets

    College and university staff often bemoan that they’re being asked to do more with less, and a recent survey underscores that sentiment. Thirty percent of institutions surveyed by Tyton Partners expect decreases of greater than 2 percent to their student support budgets over the next three academic years, while fewer than 25 percent expect an increase in budgets.

    Financial pressures are tied in part to declining enrollments, as well as to changes in federal structures that reduce access to aid, according to the report.

    Eighty percent of institutions expect budgets for support services in enrollment and admissions to shrink, and 50 percent anticipate cuts to student support services. Other student-facing offices expecting declines are academic program delivery and innovation (33 percent), career readiness (29 percent), and research development and funding (20 percent).

    Threats to international student enrollment and visa complications could also significantly harm institutional resources and student success efforts; nearly 50 percent of four-year institutions cited international enrollment as critical to sustaining support budgets.

    Executive orders and state legislation limiting efforts to support specific racial, ethnic and gender minorities have also reduced institutional investment in identity-based programs. Forty-four percent of public four-year colleges have seen programming for affinity groups decrease over the past 12 months, compared to 28 percent of two-year colleges and 25 percent of private four-year colleges.

    While financial threats may hamper institutions’ ability to increase or scale offerings, a majority of student respondents said they’re not using the resources available on campus at this time anyway.

    Students say they don’t take advantage of the support offices because they don’t see the relevancy (42 percent), because they doubt the service would be helpful, have not needed the service or want to do things on their own. Thirty percent said the services were offered at inconvenient hours, lacked walk-in appointments or had no flexibility in modality.

    Methodology

    Tyton Partners’ “Driving Toward a Degree” report includes responses from 468 administrators, 1,100 front-line support staff members, 1,038 four-year students and 403 community college students. The study was fielded in the spring. Those at public four-year colleges made up the greatest share of respondents, followed by private four-year institutions and two-year colleges.

    Affordability: When administrators were asked how they’d respond to federal financial aid cuts during a time of financial constraint, 41 percent of public four-year colleges said they plan to expand institutional aid to offset students’ lost funding, compared to 25 percent of two-year colleges and 30 percent of private four-year institutions. Four-year private colleges and universities also reported re-evaluating enrollment strategies based on aid dependency, raising concerns about access for low-income students who may not be able to pay the full price of tuition, according to the report.

    Students say financial aid and support are critical to their retention; previous studies point to cost being one of the top reasons why a student leaves higher education. Over half of students (59 percent) in Tyton’s report said financial aid counseling is very important to their decision to re-enroll, compared to 52 percent who indicated academic registration was very important and 49 percent who cited mental health counseling.

    Staffing constraints: Retaining support staff is another challenge that institutions reported; over 60 percent say they’re having a hard time filling vacancies or face hiring freezes in support departments.

    For many students, academic advising is a cornerstone of success in higher education, but many departments are under stress due to high caseloads (42 percent) and frequent turnover in staff (31 percent), according to the report. Despite these headwinds, 74 percent of public four-year institutions and 72 percent of large institutions (those with more than 10,000 undergraduates) plan to increase the caseloads of staff members to recoup lost revenue.

    “Gaps in staffing directly erode advising capacity and quality,” the report authors wrote. “Our survey shows that advisers managing caseloads of 300 or more students are not only less able to engage regularly with those they serve but also more likely to leave their roles. This dynamic fuels a cycle of turnover and declining support quality, undermining institutions’ ability to sustain consistent, high-impact advising.”

    Other popular strategies institutions may employ to combat staffing challenges include reassigning duties across departments, reducing or delaying services, or shifting services to peer advisers or part-time staff members.

    To combat large caseloads, some institutions are considering implementing structured group advising sessions and developing flexible capacity for peak times, the survey noted.

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  • Week in review: Major universities take steps to rein in budgets

    Week in review: Major universities take steps to rein in budgets

    We’re rounding up recent stories, from Temple University’s plan to address a $60 million deficit to the Senate’s proposal for a lower endowment tax increase.

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  • Provincial Budgets 2025-26 | HESA

    Provincial Budgets 2025-26 | HESA

    Ok everyone, all the provincial budgets are in and so it’s time for our annual look at what another round of irresponsible pan-partisan political leadership has wrought for our sector for the next twelve months.

    Figure 1 shows the province-by-province breakdown of this year’s budgets, showing the change in transfers to institutions in real dollars over 1 year and 5 years for each of the ten provinces. In most provinces, collecting this data is pretty easy—you just look at the Main Estimates. In Ontario it is more difficult because due to the Ministry of Finance’s crapulous incompetence, it is the one province in the country where Estimates do not appear on the day of the budget (it takes them several months to put out the detailed data; and while prior to 2018 the Ministry of Colleges and Universities was able to give out actual expenditure data on the day of the Budget, the Government no longer chooses to provide such information because shovel, manure, mushrooms, etc.). So in Ontario what you have to do is collect the previous year’s data, add the announced changes in expenditure, and then make some assumptions about the way funds are phased in (because the communications jackals who have taken over public budgeting in this province insist on phrasing spending as “$750 million over five years” to make numbers as big as possible, rather than explaining how the $750 million will be phased in on an annual basis). Which is all to say, these numbers are all pretty accurate except for Ontario, where there is a bit of a margin of error.

    Figure 1: 1-year and 5-year Changes to Budgeted Provincial Transfers to Institutions, Canada, 2025-26 Budget Year

    The one province that shows big change for 2025-26 is Prince Edward Island, which dropped a lot of money on UPEI this year in order to start a new medical school. Five other provinces (British Columbia, Alberta, Manitoba, Ontario, and Newfoundland and Labrador saw real increases (that is, increases greater than the rate of inflation) this year of between 1 and 4%. Four other provinces (Saskatchewan, Quebec, New Brunswick, and Nova Scotia) saw real declines of between 1% and 3%. Altogether, that combined nationally for real growth in provincial spending of about 0.9%.

    Over a five-year horizon, things are a bit different. The oil provinces—Alberta, Saskatchewan, and Newfoundland and Labrador—have all shown double digit declines in real expenditures (19%, 11%, and 18%, respectively), the “big two” (Quebec and Ontario) are down seven and six per cent respectively, while Nova Scotia and New Brunswick are down eight and two percent respectively. The only provinces that are up are Manitoba, where just before leaving office the Tories reversed a huge portion of their cuts of the previous eight years or so, British Columbia, which build a new med school at Simon Fraser and decided to give hefty wage increases to university and college staff (which did not, in the end, leave universities and college much better off—see Vancouver Island University for evidence), and the afore-mentioned PEI. Nationally, the drop in spending after inflation was 4%, and obviously would have been much higher without that anomalous BC result.

    So what does the overall picture look like nationally? Well, take a look at Figure 2. Basically, the picture is one of long-term stagnation.

    Figure 2: Total Budgeted Provincial Expenditures on Post-Secondary Education, 2006-07 to 2025-2025, in Billions of Constant 2025 dollars

    I suppose I should also update some charts I first made available earlier this year, looking at expenditures on post-secondary education as a percentage of total government expenditures, which I do below in Figure 3. Across the country, these percentages are down a long way over the past fifteen years, particularly in Alberta, which has gone from being by far the biggest spender in 2008 to being below the national average now.

    Figure 3: Budgeted Provincial Expenditures on Post-Secondary Education as a Percentage of Total Budgeted Provincial Expenditures, Canada and selected provinces, 2006-07 to 2025-26.

    Now, your brain might be whirring a bit trying to would out how Figures 2 and 3 can both be true. Overall spending is down only gently, but PSE expenditures as a percentage are crashing? It’s easy to explain, but not intuitive if you believe all the left-wing CBC nonsense about how governments are in austerity mode. This is nonsense: Canadian provincial governments are absolutely NOT in austerity mode. In most provinces, overall spending is wayyy up. It’s just that they are not choosing to spend any of that on postsecondary education. Since COVID, overall government expenditure is up 20% after inflation; since 2008-09, when post-secondary education peaked as a percentage of total expenditures, it’s up 59% after inflation.

    Figure 4: Real Change in Total Provincial Expenditures vs. Provincial Expenditures on Post-Secondary Education 2006-07 to 2025-26 (2006-07 = 100)

    Got it? Provinces are still spending. They just aren’t spending on postsecondary education.

    Anyways, just to finish things off, figure 5 shows changes in overall provincial spending on student assistance programs. It’s up a bit this year mainly because of Ontario. Unclear why there has been a rise, though I suspect it has something to do with the ongoing crappiness in the youth job market (something I will get back to in a blog next week) and the need for student aid to backfill.

    Figure 5: Total Budgeted Provincial Expenditures on Student Financial Assistance, Canada 2006-07 to 2025-26, in Billions of Constant 2025 Dollars

    So that’s your 2025-26 budget round up. Not as bad as some previous years but man, our sector is in a bit of a whole and just can’t get out of it. The message, as always, is: no one is coming to save us.

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  • Driving resilient, stable school budgets in times of uncertainty

    Driving resilient, stable school budgets in times of uncertainty

    A perfect storm of financial pressures, from declining enrollment to escalating economic uncertainty, are pushing K-12 school district budgets to their limits.

    To adapt, districts nationwide are embracing innovative strategies to shore up budget stability. From reducing facility operational costs to forging strong community partnerships, school district leaders can learn from these proven examples to safeguard their financial stability and maintain funding for critical student programs.

    Securing revenue, and finding new revenue streams

    The post-COVID recovery era has been especially challenging for the majority of school districts whose budgets are based on per-pupil enrollment or attendance. Fortunately, there are many examples of school districts that have successfully combatted budget shortfalls through community-driven student engagement, retention and attendance programs. And with shifting populations and school choice schemes on the rise, school districts are also growing more adept at differentiating themselves through strong communications programs and visible investments into modern facilities. These strategies impact budgets by attracting new residents and strengthening student retention. 

    More districts are also looking to partnerships with local utility companies like utility rebates, net-metering programs, and demand response incentives. These programs reward smart energy management (i.e. energy efficiency upgrades, on-site renewables, and strategic energy usage) by offering direct cash infusions and bill credits that can improve a school’s budget health.

    Richland County School District One in South Carolina, for example, was able to take advantage of a net-metering program with their local utility after installing nearly 9MW of rooftop solar across 15 campuses. These solar upgrades will save the district over $29 million in energy costs over the next 20 years, more than funding themselves while creating a new financial cash flow into the district’s budget. This project also enables new STEAM curriculum, engaging students in energy generation and conservation in hands-on learning labs.

    Eliminating cost volatility and avoiding unexpected expenses

    Most US school districts are grappling with a portfolio of facilities that are decades past their prime. Maintaining those aging facilities often becomes reactive rather than planned—leaving districts vulnerable to costly, disruptive emergencies. This cycle of crisis spending is unsustainable, driving up long-term costs. That’s one reason why, in their 2025 Infrastructure Report Card for America’s Schools, the ASCE calls to, “urge school districts to adopt life-cycle cost analysis principles in planning and design processes to evaluate the total cost of projects and achieve the lowest net present value cost, including life-cycle O&M, in addition to capital construction.”

    Outdated HVAC systems, leaky building envelopes and inefficient lighting also strain budgets by consuming massive amounts of energy. With energy price volatility on the rise, inefficient energy usage can present a threat to predictable budgeting, particularly for public schools already navigating tight financial constraints.

    School districts like Greene County Schools (GCS) in Tennessee are seeing big budget impacts from taking a proactive approach to facility and energy management. Facing a growing list of deferred maintenance projects, including more than 400 aging HVAC units, GCS turned to Schneider Electric to help design a comprehensive, long-term energy management strategy that allowed the district to reallocate savings toward deferred maintenance.

    Support top-line priorities by capturing O&M cost savings

    Operations and maintenance (O&M) represent the second-largest expenditure in most school districts, right after personnel. Unlike staffing, however, these costs can be reduced without sacrificing student outcomes. By investing in facility modernizations—like smart building controls, LED lighting, water conserving plumbing, and clean energy technologies—schools can dramatically lower their utility bills and maintenance costs. These savings, when captured strategically, can be diverted back into what matters most: academic programming, staffing, and student engagement. 

    Gilbert Public Schools (GPS) in Arizona discovered first-hand how energy improvements can be an excellent tool to achieve budget sustainability. GPS started by upgrading to high-efficiency LED lighting across the district’s gymnasiums, allowing them to turn a $257,000 initial investment into more than $1.2 million in lifecycle savings over the life of the project. Next, GPS made modernizations that reduced water usage and lowered maintenance costs, from which the district ultimately realized $12.9M in lifecycle savings.

    Finding budget stability in times of uncertainty

    Times are uncertain, but as these stories show, budget stability is still within reach. Through smart resource optimization and strong community partnerships, schools can safeguard funding for their top priorities.

    Visit Schneider Electric’s K-12 Education Hub for more inspiring success stories and insights into our budget stability solutions tailored for schools.

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