NCF budget results for the 2012-13 year "not nearly as bad as it might have been," says Michalson
Though prepared for the worst, New College President Gordon “Mike” Michalson sent a cautiously optimistic e-mail to staff and students after meeting with the Florida State Legislature to determine the budget for the 2012-13 academic year. The state gave an unexpected $1.3 million of recurring funds to the school, though New College still got its share of the $300 million budget cut imposed on the entire Florida State University System (SUS).
Since New College gained its independence as a state university, it has been working on a total monetary request of $5.4 million from the state as “start-up” money. This last appropriation of $1.3 million finally completes the long-awaited funds just as Michalson passes the reins off to new president Donal O’Shea next year.
“It sure is great to finally have the remainder of our start-up money in a very tight budget year,” Vice President of Finance and Administration John Martin said.
New College hit lucky sevens on the government slot machine again when it also received an unanticipated $1.8 million in Public Education Capital Outlay (PECO) funds. PECO funds are money allocations specifically given to maintain and renovate buildings, pay utilities and upkeep campus facilities.
“We were one of only six universities in the State University System to get any PECO money,” Martin said. “There was only about $31 million in the whole system and we got $1.8 [million].”
“I believe the distribution of funds was due to mounting concern that zeroing out the PECO budget for 2012-2013 would result in highly expensive long-term deferred maintenance,” Michalson said in his e-mail to the staff and students.
“[These are] very welcome dollars,” Martin said. “I will caution, though, that PECO can be line item vetoed by the governor. He may veto all of the $31 million projects … so we won’t count those dollars until the governor signs the appropriations bill and we know whether or not he vetoes it.”
At just over $1.5 million, New College’s contribution to the $300 million budget cuts on the Florida SUS was the smallest amount of money cut from the 14 universities. New College ranked fifth in the lowest percentages of cuts to the overall budget, however, at eight percent.
“They recognized that the institutions with smaller enrollments and smaller budgets couldn’t take an ‘across-the-board’ cut in the same way as the institutions with the larger enrollments and larger cash reserves,” Martin explained.
“[But] we’re still taking a loss,” Martin said. “It’s not like … we got a lot more money to spread around. We’re still [getting] about $500,000 less money next year than we have this year.”
Over the past five years New College has experienced over $5 million in cuts. It has been able to make up around $3 million by reducing energy consumption, not filling vacant positions and lowering the price of other operational costs. Next year, Martin expressed, the school may have to dip more deeply into its reserves to compensate the $2.5 million cut — a total comprised of the $2 million leftover from previous years as well as the fresh $500,000 cut for the coming year.
“We’ll still look for ways to conserve operations and reduce expenses but a lot of things we’ve done to save dollars are already in place,” Martin said. “You can only not fill a [faculty] position once.”
After a three percent cut in state employees’ health insurance, the employees’ union sued Florida legislature, declaring the cuts unconstitutional and won at a circuit court in Tallahassee this past week. The state is sure to appeal however, and it is very likely the case will be presented to the Supreme Court before a verdict is assured. In theory, if the ruling holds, the state would be obligated to compensate for the cut. Though it would benefit employees, Martin was doubtful about whether it would help with the school budget.
“Who knows what they’re going to do?” he asked. “They may say, ‘This is how we were helping balance our budget this year, so okay, we’ll give you back the $151,000 that would have gone to employees … [but] now we’re going to cut you $151,000 out of your base operating budget.’
“They control the purse strings and there are many ways [they can] make up the difference,” Martin summed grimly.
Much to the dismay of students, another reason New College may have gotten a sweeter deal than expected is that the legislature assumes New College will raise its in-state tuition by 15 percent, which, according to Martin, is likely to happen.
Martin attributed the generally-fortunate outcome of next year’s budget to a variety of factors. One key element was the effective lobbying support from New College’s hired consulting firm, Capital City Consulting.
“Our $1.3 million request has also been a long-standing high-priority of the Board of Governors in Tallahassee,” he said. “Some of our Board [of Trustees] members were also making calls to Tallahassee and kind of keeping in touch with the key decision makers up there. So you can see it was a broad-based effort to try and convince the legislative folks to do something on our behalf even though we got cut.
“Sometimes you’re successful and sometimes you fall short,” Martin said. “We just happened to be successful this year … and it came at just the right time.”