The events of the prior and start of the new year have been anything but normal, as headlines remain dominated by a myriad of topics: COVID-19, the presidential election, the Black Lives Matter movement and the Jan. 6 Capitol siege, to name a few.
Despite the abnormality of the last 12 or so months, there is at least one constant here in the First State: the month of February being dominated by Joint Finance Committee (JFC) hearings in the Delaware General Assembly.
The JFC holds an immense power — the power of the purse — when it comes to local state politics, as the committee is responsible for the annual appropriation of funds across the various agencies, departments and other areas that rely on state fiscal support. The committee is responsible for hearing requests from a plethora of speakers throughout the month, as public entities battle to secure the money they need to operate for the upcoming fiscal year.
The state legislature enjoys a break in the legislative session for the entire month of February, when legislators’ primary focus is wading through the ocean of pleas for additional funding from a range of causes and determining how much money is truly needed in each instance.
While the JFC — and local and state politics in general — may seem like an obscure and unimportant topic in the lives of college students, it is anything but. The university is one of these hungry mouths that must make its case for funding year after year, and this remains unchanged in 2021.
University President Dennis Assanis, accompanied by Provost Robin Morgan and Executive Vice President and Chief Operating Officer John Long, made the case for the university’s funding request before the JFC on Feb. 4.
Assanis emphasized several different ways that the university has benefited the state of Delaware in his appeal for funding appropriations; touting the early college credit program, highlighting various university programs that support pre-K-12 education in Delaware public schools and citing the stable number of in-state applicants to the Newark campus.
Concurrent with other groups seeking appropriations from the JFC, the university representatives stressed the role of the global health pandemic as the catalyst for their increased funding request. According to Assanis, several factors stemming from the pandemic have “resulted in significant financial hits to the university,” including the refund of housing, dining, and other fees to students, stagnant tuition rates, and loss of revenue from residence halls, events and gifts.
Assanis noted that the frozen tuition rate is in lieu of the typical increase of 3.5% to cover rising operating costs, as well as mentioning drops in enrollment of first year students, which has decreased 10% overall and 3.5% for out-of-state students who pay higher tuition. The university invested over $6 million to improve online learning for students, as 90% of classes were delivered online amidst the pandemic.
These factors have forced the university into an extraordinary budget challenge, as their presentation to the JFC was underscored by their projected fiscal year 2021 budget deficit: a staggering $250 million-plus before mitigation measures. The university group expects the effects of this deficit to continue through 2025.
Assanis listed numerous measures that the university is taking to mitigate the deficit: offering faculty and staff voluntary retirement incentives and voluntary salary or hour reductions, the implementation of a hiring freeze, reductions in the university’s full- and part-time workforce and salary reductions for non-union staff.
The university laid off 125 staff members through the fall and winter as part of their mitigation strategy and “29 have been rehired as demand on campus in their areas increased this semester,” according to Andrea Boyle Tippett, the director of external relations for the university’s Office of Communications and Marketing.
These measures are accompanied by $30 million in federal COVID-19 relief funding and $32.5 million from Governor John Carney’s “Higher Education Relief Fund,” yet none of these steps compare to one measure the university has adopted: lifting $102 million from the endowment fund.
The $102 million is in addition to the $68 million in dividends from the endowment that the university withdraws annually “to support student scholarships, academic programs, research and other operations,” Assanis stated before the JFC.
This year, the university has requested $126.3 million to be allocated from the FY22 budget, a slight increase from the FY21 budget which appropriated $125M to the university.
The presentation broke the request of $126.3 million into three categories: $96.9 million for operations, $12.7 million for scholarships, and $16.8 million for “special lines.”
The granted increase — approximately $1.125 million — is going towards expanding scholarship funds available to in-state students. Assanis stated that for Delawareans, of the $39,000 tuition cost for undergraduates, “the state’s operating appropriation, including scholarships, covers about $18,000 of that cost.”
Assanis’ and the university’s request has been supported by Carney, who included the $126.3 million appropriation in his proposed budget to the state legislature. However, it now lies with the Delaware General Assembly, specifically the JFC, to determine whether the university will receive this massive appropriation as requested.