The Appropriations Committee of the General Assembly on Thursday approved a two-year budget for fiscal years ’08 and ’09 that is mostly positive, although significant challenges remain.
The budget approved for the Storrs-based programs is close to UConn’s current services requests, and provides approximately $20 million a year above current services in each of the two years to assist the Health Center.
“For Storrs, the proposal gives us a sound base, but unfortunately doesn’t provide help for our faculty expansion plan. Faculty hiring remains a focal point of our ongoing legislative efforts,” said Lorraine Aronson, vice president and chief financial officer.
“With regard to the Health Center, it’s gratifying that the committee acknowledged the enormous financial pressures that our academic program and our hospital are grappling with. I take this as an indicator of a growing appreciation of the Health Center as a unique state asset.”
The budget, which must be approved by the General Assembly before the end of the legislative session in June, provides $225.4 million for the Storrs-based budget in fiscal year ’08 and $227.7 million in fiscal ’09, compared with UConn’s requests for $226.1 million in ’08 and $228.2 million in ’09.
The Health Center requested $80 million for ’08, but the Appropriations Committee recommended $99.2 million for that year.
For ’09, the University requested $83.2 million for the Health Center, but the Appropriations Committee recommended a budget of $108 million.
The budget is far from final, however.
“This is another step in a long process that culminates at the end of the legislative session in June,” said Scott Brohinsky, director of university relations.
“A budget must be approved by the House and the Senate with the agreement of the governor before it is finalized.”
The appropriations budget for the Storrs-based programs restores funds for two programs that had been eliminated in the governor’s proposed budget.
The proposal includes $2 million a year for the Eminent Faculty Program and $1 million – half of the amount appropriated last year – for the Center for Entrepreneurship.
It also includes $300,000 in each year of the two-year budget for the Master’s Entry Into Nursing Program, and $200,000 in fiscal year ’08 for a basin level water planning study, an initiative of the Institute of Water Resources in the College of Agriculture and Natural Resources.
But the budget includes no funding for the Storrs-based faculty expansion plan.
The University had requested $4.6 million in fiscal year ’08, and an additional $4.5 million in ’09, so that ultimately over five years 175 faculty positions could be added to the Storrs-based programs.
The new positions would reduce reliance on adjuncts and help the University meet its goal of reducing the student-faculty ratio from 17: 1 to 15:1.
The Appropriations Committee also approved changes in the Governor’s recommended addition of $25 million to the state’s need-based financial aid program funded through the Department of Higher Education budget.
Gov. M. Jodi Rell’s recommendation split the $25 million evenly between private (the Connecticut Independent College Student grant) and public (the Connecticut Aid to Public College grant) programs.
The committee’s proposal would reduce the additional funding to $23.5 million, but shift more of the new funds to the Public College grant, for an annual increase of approximately $15 million.
If the current allocation methodology remains the same, that could mean an increase for UConn of about $5 million.
Also in the budget is a $100,000 line item in the Department of Higher Education’s budget to fund veterinary school slots at Cornell and Tufts universities for Connecticut residents.
At the Health Center, the Appropriations Committee maintained the Governor’s current services funding and added funding for the “academic gap” of $13.5 million in fiscal year ’08 and $21 million (a further $6.5 million) in ’09.
“These funds are absolutely critical to the financial stability of the schools of Medicine and Dental Medicine and our research operation, because our hospital is no longer able to provide support for the academic program,” said Aronson.
The Appropriations budget also provides $5 million in each of the two years to help address the disparity in fringe benefit costs between John Dempsey Hospital and other hospitals.
Because of unfunded state pension mandates, the difference between Dempsey Hospital’s fringe rate and the Connecticut Hospital Association member average is estimated at $10.5 million for the current year.
The proposed budget also includes an additional $100,000 to support existing Area Health Education Collaboratives, a longstanding component of the University’s public health efforts.
The budget also provides funding of $99.7 million for fiscal year ’08 and $104.8 million for fiscal year ’09 in the Department of Correction’s budget, for inmate health care provided by the Health Center.
This is approximately $500,000 a year above the Governor’s recommendation.
It is not yet clear whether the $3.4 million fiscal year ’07 deficiency appropriation added to this year’s appropriation for this program will ultimately be included in the funding base for fiscal years ’08 and ’09. If it is, said Aronson, the budget for the program will be tight, but manageable.
One very significant aspect of the Appropriations proposal involves changes in Medicaid reimbursement for all medical providers statewide.
The recommendation includes a 19 percent increase for hospital inpatient and outpatient rates in fiscal year ’08 and an additional 10 percent in fiscal year ’09; a 50 percent increase in physician rates; and a 40 percent increase in rates for clinics, dental, and vision service providers.
“As we continue our analysis of the proposal, we will get a better sense of the potential impact on our clinical revenue at the Health Center,” Aronson said.
The Appropriations Committee also included in the appropriation for the Office of Health Care Access $400,000 to cover the costs of a study approved by the Higher Education and Public Health committees as a means to better understand the complexities of UConn’s request for a replacement hospital.
These resources will enable OCHA to complete the study by the bill’s January 2008 deadline.
The budget also includes $4.2 million for all the public higher education units for each year of the biennium in the Department of Higher Education budget to use for the matching grants program.
These funds will match gifts to endowment (including multi-year gifts) made prior to the program changes that occurred in 2004.
At that time, legislators enacted an amendment to delay the release of any state match for new, private gifts to endowment until the state’s Rainy Day Fund reaches 10 percent of the General Fund budget.
The lack of certainty with regard to achieving the trigger has rendered the program virtually nonfunctional.
Still unresolved is the capital budget. Rell proposed that the legislature reduce funding for 21st Century UConn, the third phase of UConn 2000, in fiscal years ’08 through ’15, and aggregate those annual reductions to create an additional year (2016) of the program with a $90 million bond level.
The initial reductions proposed for fiscal years ’08 and ’09 are $5 million and $15 million, respectively.
The capital budget must be voted on by the Finance, Revenue, and Bonding Committee in the next several weeks.