2013 NY SUNY 2020 Testimony

2013 NY SUNY 2020 Testimony

State University of New York (SUNY): Official Testimony for December 12 Hearing

“New York’s Public University System’s Use of State Aid and Revenue Generated by Tuition Increases”

 

INTRODUCTION

Good morning and thank you for having us today. My name is Nancy Zimpher, and I am Chancellor of the State University of New York. I want to thank Chairperson Deborah Glick, Members of the Assembly, and legislative staff for allowing us this opportunity.

It is a privilege to come before you today on behalf of SUNY to comment on the NYSUNY 2020 Challenge Grant Program. I am pleased to be joined today by Presidents Harvey Stenger of Binghamton University and Candace Vancko of SUNY Delhi, both of who have had the opportunity to invest in their campuses thanks to the NYSUNY 2020 legislation, and who have graciously offered to provide a firsthand account of the impact of this historic legislation.

HISTORY

As you well know, prior to 2011, we were in a balancing act. When state support was reduced, tuition rates and revenue increased, over time shifting the primary responsibility of supporting SUNY onto students.

In the four years preceding the NY-SUNY 2020 legislation, SUNY’s State-operated campuses experienced reductions in funding of $322.0 million. Before NYSUNY 2020, SUNY was allowed to raise tuition only 13 times over 48 years. The smallest tuition increase was 7 percent ($310) in 2009/2010. The highest increase was 43 percent ($650) in 1991/1992. Seventeen times since 1963, a first-year student entered SUNY and during his or her college career never had to pay a tuition increase while others saw two or three increases.

“Tuition roulette,” as it was coined, made it impossible for students and families to properly plan for their educational future. This approach was not rational or logical, and time and again, SUNY advocated for change.

ANNUAL PLANNED TUITION INCREASES & MAINTENANCE OF EFFORT

This change came in the form of the NYSUNY 2020 Challenge Grant Act in late June 2011.

Facing additional reductions in state-support for the state-operated campuses, the Legislature worked in concert with the Governor to give SUNY’s campuses and students their parents a framework that allowed them to plan for the next five years. Not only was this a collaborative effort with our colleagues up the hill, but this innovative approach to tuition-setting was strongly endorsed and promoted by our statewide student government. They knew it was a fair, predictable, and responsible way to secure their university as one of the most affordable in the nation and ensure increased quality in the delivery of their education. Support for this tuition policy also included SUNY campus presidents, faculty governance bodies, business and economic development leaders, and editorial boards state-wide.

This legislation provided SUNY with a resident undergraduate tuition increase of up to $300 annually, as well as up to a 10 percent increase for non-resident tuition levels at the four university centers, and allowed SUNY’s Board of Trustees to follow their statutory responsibility and ensure a steady source of revenue to help fill the gap left by numerous reductions in state support.

NYSUNY 2020 also included a Maintenance of Effort (MOE) component. The MOE broke the long-standing inverse relationship between state support and tuition by ensuring that every dollar paid by a student could be invested in that student’s education and not go to replace lost state funding. The result was predictable levels of both tuition and state funding, allowing both families and campuses to plan better.

RESULTS

While our presidents will speak to more specific examples, I would like to share with you a few ways in which we have realized results from the NYSUNY 2020 legislation. Between when the bill passed and the end of Academic Year 2013/14, SUNY projects it will:

As a result of this legislation, our campuses have restored full-time faculty, invested in recruitment strategies, increased merit-based financial aid, bolstered funding for academic services, and improved their offerings in co-operative education, global education, big data, and sustainability, in addition to many other critical areas, including, of course, creating jobs through the Challenge Grant capital projects. Oswego was able to restore full-time faculty to the levels maintained before the cuts experienced during the recession, and Cortland has been able to achieve 100 percent renewable energy use on campus.

During this time, SUNY has continued to serve a significant portion of all New York State postsecondary students: over 35 percent for all sectors of higher education, and nearly 25 percent for just our four-year and higher campuses. Also, I am proud to say that, on a year-to-year basis, fall enrollment at our state-operated campuses is expected to increase slightly from 211,000 in Fall 2012 to 212,000 in 2013.

Finally, despite the increases provided within this legislation, our resident undergraduate tuition and fees have remained below or on par with neighboring and peer states.

TUITION CREDIT

I want to expand on one of the most direct ways SUNY is ensuring that college remains affordable for the most vulnerable New Yorkers. The SUNY tuition credit provides New York State’s neediest students with an additional source of support. This program, combined with the State’s generous Tuition Assistance Program (TAP), ensures that these students continue to have access to a post-secondary education and all the benefits that it includes.

The tuition credit provides all TAP award recipients with funding to cover a percentage of the gap between their TAP award and current resident undergraduate tuition levels. For those students who qualify for the maximum award of $5,000, the tuition credit covers the full amount of the gap between TAP and SUNY tuition. This credit is funded directly from the incremental revenue that SUNY realized from the annual tuition increases – and is estimated to cost a total of $70.2 million by the end of 2013/14.

This program is also a perfect example of how SUNY has approached challenges in recent years. For many years, costs that may have been similar to the tuition credit would have been the responsibility of the campus that incurred them, and that campus alone. However, in the spirit of “systemness” and to ensure that the tuition credit has a fair impact on our campuses, SUNY has instead leveraged our overall fiscal health to ensure the continued viability of all campuses. To that end, SUNY ensures that all campuses support the tuition credit equally by normalizing the overall cost across all campuses so that all campuses provide the same support. No campus pays more because of the financial need of the population they serve.

SUNY realizes the importance of the Tuition Credit, but we remain cognizant of the cost it incurs on our campuses, even when we ensure that all pay the same relative share. Since the enactment of NYSUNY 2020, we estimate that SUNY has committed nearly 30 percent of the estimated revenue generated by the annual resident undergraduate tuition increases, and we project an approximate $175 million investment in the program over the five year period. As we move forward during the NYSUNY 2020 legislation and beyond, we hope to discuss other options that may exist to address both the fiscal needs of eligible New Yorkers and allow further investment of revenues in support of the direct educational mission.

BEYOND 2020

This law, resulting from the hard work of the Legislature and Governor, has changed the way students pay for college in New York State for the better. Of course, SUNY has also worked to do its part to control costs, and I would like to briefly mention three examples:

Shared Services

The same year the NYSUNY 2020 legislation was passed, I made a commitment to launch a Shared Services initiative, which continues to achieve operational efficiencies and services excellence, allowing for the reinvestment of $100.0 million in administrative costs into academic and student services over three years. Nearing the end of its second year, SUNY’s Shared Services initiative represents one of few higher education systems attempting to do this on a university-wide scale. Already, SUNY has developed collaborative relationships, identified inefficiencies, and delivered strategic solutions to improve performance.

We have identified several areas, valued at $48 million, where administrative efficiencies and shared contracting will be implemented – with $26 million worth already implemented. Examples of this include the review of contractual agreements in order to identify and eliminate waste, such as an agreement that required SUNY to purchase 10,000 software licenses, of which only 200 were used at any given time each year. This contract has since been renegotiated to provide concurrent licensing, saving $3 million annually. With more potential savings like this on the horizon, we are confident we will meet our goals.

Fundraising

We have also been able to leverage the stability that NYSUNY 2020 has provided to SUNY through annual tuition increases and maintenance of effort as something that donors can understand and rely on, ensuring that their investment adds to our margin of excellence, rather than backfilling cuts in state support.

Fundraising at our campuses is up considerably during the years since this legislation has been in place, compared to their historical trajectory. Two years, of course, doesn’t make a trend, but we think this is a good indication of our future potential. Since 2010 fundraising on a system-wide basis has been well above average in two out of three years, including an all-time record-breaking $333 million in 2012.

Furthermore, the Challenge Grants have served to drive fundraising pledges related to these capital projects, and funds are now starting to come in. The Challenge Grant has improved our ability to drive co-investment toward a shared vision.

START-UP NY

SUNY has proven itself as a reliable and trustworthy partner for New York State, leveraging State investment in the NYSUNY 2020 Capital Projects, and in the preliminary work done in the new START-UP New York program.

Through START-UP, SUNY campuses now serve as a beacon of opportunity for new and expanding businesses to bring their innovation – and the dollars that come with it – to New York. Already, more than 1,100 companies have inquired about participating in the program, which allows new or expanding companies creating new net jobs to set up shop on or near our campuses, tax free, for 10 years.

Our students and faculty benefit from these new partnerships, as each and every one must support a campus’ academic mission. And so not only are we attracting new jobs and revenues to the state, we’re advancing research, providing our students with internship and mentoring opportunities, and leveraging our existing assets to bring ideas to market. The Governor has touted this program as the most exciting economic development initiative in the country, and our campuses get that. Already, they are engaged with potential partners and developing plans to strategically harness this opportunity in ways that will best support their goals for academic and student success.

CAMPUS POINT OF VIEW

And so now I want to turn to our presidents joining me today to share with you their experiences at the local level with the NYSUNY 2020 legislation and how its has helped them to meet their goals for academic and student success. First, we are joined by President Candance Vancko from SUNY Delhi, and then we will hear from President Harvey Stenger of Binghamton University.

>> President Candace S. Vancko - State University of New York at Delhi

>> President Harvey G. Stenger - State University of New York at Binghamton

CONCLUSION

As you have seen, this legislation has had a dramatic impact on SUNY’s state-operated campuses, and allowed SUNY to succeed in delivering quality postsecondary education and driving economic development – all of which improves the quality of life for New Yorkers.

SUNY continues to stand ready and able to be the state’s partner in driving economic revitalization, improving the quality of life for our citizens, educating more New Yorkers, and educating them better.

NYSUNY 2020 has served as a critical foundation for a far-reaching effort to keep New York competitive on the national and global stages – and we are proud to be able to say that, together with this legislature and the Governor, we are able to accomplish that while also benefitting our students and their families.

I look forward to our continued activities in these areas, as well as a robust discussion on the future of SUNY in regard to our funding throughout the upcoming budget season.

Thank you. We are happy to take your questions.

Government Relations