Challenges loom, but UB is on solid financial footing

UB’s financial status is solid, but challenges loom in the coming years, two university administrators noted during a presentation at Thursday’s Professional Staff Senate (PSS) meeting in the Center for Tomorrow.

“The state of the university is strong. We’re not projecting great gushers of revenue to come our way, but as a university we are in a strong condition,” Provost Charles F. Zukoski said.

Zukoski and Laura Hubbard, vice president for finance and administration, gave a similar presentation to the PSS that they had delivered earlier that day to deans, vice provosts and vice presidents, sharing information on the university’s financial capacity, budget goals and the budget process, while noting potential obstacles that will need to be addressed down the road.

Some of the challenges Hubbard outlined include:

• The elimination last year of the NYSUNY 2020 rational tuition plan, which allowed SUNY schools to raise tuition predictably. That helped raise much-needed funds that were used for programs benefiting students, while allowing students and their parents to better plan for educational costs.
• A lack of state funding for negotiated salary increases for employees. UB administrators are planning for additional negotiated salary increases and assuming that those won’t receive state funding. “The reason we’re assuming that is the governor’s budget last year signaled that for the remainder of the time he is in office, he doesn’t want the state budget to grow by more than 2 percent per year,” Hubbard said. “If you do the math and you look at things that are required for the state to fund, it really doesn’t leave the capacity to fund (negotiated salary increases).”
• Reduced state tax support, an assumption based on the state’s current financial projections. “Right now the personal income tax revenue is not coming in on pace with what they projected. That would have impacts both for the operating budget and the capital budget,” Hubbard said.
• The potential for UB’s expenses to exceed sources of funds during the 2018-19 academic year. That’s due to the reduced state tax support, tuition revenue that isn’t growing at a rapid pace and negotiated salary increases. “Those costs are growing at a higher pace than revenues,” Hubbard said. “It’s a couple years down the road, but we have to pay attention to it and plan.”

“As we think about all these factors, it says we have limited ability centrally to fund additional investments,” she said. “We need to be strategic about what we’re doing and, secondly, we need to think about how we use existing resources more effectively where we can.”

While the outlook may seem dire, UB is in a good position to overcome some of the financial obstacles that it may face, Zukoski noted.

“The university remains committed to our goals for excellence and strategies to achieve them, and we remain strong and stable financially, much more so than other state university systems,” he said. “We’re actually in good shape.”