The University of Alaska is bracing for $16 million to $32 million cut to its state funding next year and is looking at another tuition hike to partially plug its anticipated budget gap.
UA President Jim Johnsen presented a preliminary budget outline at Thursday's Board of Regents meeting in Juneau that included the "assumption" of a 10 percent tuition increase for the 2017-18 school year, which would come on top of years of steady increases to the prices students must pay for classes.
If the 10 percent increase sticks as the university's budget process evolves over the next several months, Alaska residents at Anchorage's campus will pay about 134 percent more next school year for lower-division classes than resident students paid during the 2003-04 academic year. That's a jump from $90 per credit hour to $211, according to UA data on tuition rates.
UA's tuition rates vary among some campuses, departments, course levels and whether a student is an Alaska resident. Tuition rates increased across the board by 5 percent this academic year, while engineering and business students faced additional tuition hikes.
Johnsen said he will work with student government groups to discuss next year's tuition rates and will bring a draft 2017-18 budget for a regent vote to another meeting in November. That budget request will then go to the state Legislature, and the final spending plan will depend on how much money state lawmakers allocate to the university next year.
Nothing now suggests the state's fiscal situation will be any less grim next year, with the state facing a multibillion-dollar deficit.
In the meantime, UA, which historically has relied on the state for a big chunk of its funding, is not only talking about tuition increases but is also going through an analysis of its administrative processes and academic programs to reduce duplication and focus on the subjects that each campus does well within the sprawling system.
Recommendations of some big changes came Thursday, including moving from three schools of education and three deans at those schools to one school and one dean, plus potentially paring down its number of athletic teams.
"We should prepare for a cut of 5 to 10 percent — $16 to $32 million," Johnsen told the regents in Juneau Thursday. "This is on top of the cuts we've taken the last three years. These cuts have been painful."
A 10 percent tuition increase would generate about $10 million, according to Johnsen's budget presentation.
Johnsen said that despite repeated increases, Alaska's tuition and fees still remain low compared to other universities — about 19 percent less than the average tuition and fees charged among colleges and universities in Western states, according to the Western Interstate Commission for Higher Education.
WICHE looked at tuition across 15 states for the 2015-16 school year, including Washington, Wyoming, Oregon and Hawaii. The average tuition and fees paid by undergraduate resident students was $8,081 in 2015-16 school year, up 94 percent from 2004-2005. University of Alaska Anchorage resident students in lower-level courses had an 85 percent tuition increase during that time, while those in upper-division classes had a 97 percent increase.
By 2025, Johnsen said he hopes to have Alaska's tuition closer to the Western states' average, plus an increase to account for the "Alaska factor" — the extra cost of doing business in a remote state.
"Our costs are going to be higher," Johnsen said. "Half of our campuses are inaccessible by land. So it is reasonable that we apply a premium — an Alaska factor as you would."
Colby Freel, University of Alaska Fairbanks student body president, said in an interview Thursday that students are willing to pay for their education in Alaska and understand the university's financial position, as it deals with funding cuts and prepares for even more. He said he still had to talk to students about the 10 percent tuition increase discussed Thursday, but students had supported increases in the past — including the one this year.
"It's not completely out of the realm of student support," Freel said of the 10 percent increase.
Johnsen's budget presentation also included the assumption UA would receive $335 million from the Legislature next year — the amount it received this year before Gov. Bill Walker vetoed $10 million. The presentation did not take into account a 5 percent to 10 percent cut, which Johnsen said Walker told UA to prepare for.
Robbie Graham, UA spokesperson, said the budget request is based on what UA needs "to meet the state's workforce needs and grow the university through reinvesting in strategic programs."
"President Johnsen recognizes the state's current challenging fiscal climate, but believes the University plays a critical role in helping the state address its challenges including workforce development," Graham said in an email Thursday. "The draft budget reflects that perspective, and the Board of Regents will make a final decision in November."
Last year, UA asked the Legislature for nearly $378 million, about 40 percent of its early operating budget total. It received $325 million and cut more than 500 positions across the system — or about 13 percent, according to Johnsen's presentation.
The UAA Faculty Senate sent a survey out in August to gauge morale, said Faculty Alliance Chair Tara Smith. It received about 350 responses — 80 percent of the responding faculty said their morale had declined "somewhat or a lot," while 40 percent said they were looking for jobs outside of UA, Smith told regents Thursday.
It's unclear what the effect of the anticipated budget cut next year will have on jobs and academic programs — those subjects are likely to be discussed in the next several months. The regents will meet again in Fairbanks in November.