Understanding the impact of UHCL’s budget deficit

The University of Houston-Clear lake is experiencing a $4,283,796 budget deficit for the fiscal school year of 2016-2017. The reason for this deficit is based on UHCL not meeting predicted enrollment numbers. The main shortfall derives from a reduction in the number of graduate students projected to be enrolled. Graduate enrollment decreased in all four colleges.

The University has an operations budget of 124 million per year. Because of the overestimated number of graduate students, the University is short more than 4 million dollars. To offset this shortcoming, UHCL is going to dive into its reserve bank, kind of like a savings account, and will fund 40 percent of the deficit from this account while the other 60 percent will be covered by all of the university departments reducing their budgets.

“A decrease of this magnitude has a very significant impact on our budget for 2016-2017 due to the amount of tuition and fee dollars generated, particularly given the tuition differential between undergraduate and graduate tuition and resident versus non-resident tuition,” said President William Staples in an email sent to all faculty and staff Nov. 7. “For 2016-2017, our total tuition shortfall was $4,985,932. This amount will be reduced to $4,283,796 with a debt service shift. This $4,283,796 shortfall will be covered by university reserves (40 percent or $1,736,317) and by department reductions (60 percent or $2,547,479).”

The budget will be reduced by providing less money to faculty for travel and not filling vacant faculty or staff positions this year.

“There will be no layoffs or cuts in salary,” said Michelle Dotter, vice president for administration and finance.

As far as salary increases go, raises were given this year, but the finance team doesn’t have enough information yet to predict what will happen to September 2017 salary increases.

“We just don’t know enough information to be able to make that decision yet about next year,” Dotter said. “We really need to see what happens with spring and summer enrollment and then there are a few things we are working on to increase the enrollment for fall of next year.”

The university is taking several actions in order to increase enrollment. This includes meeting with all of the deans and their graduate program department chairs specifically, then retaining Ruffalo Noel Levitz, an enrollment management consulting firm, to assist and identify potential growth for the graduate programs. The university also plans on emphasizing UHCL Online, which will represent all of the courses and programs that can be taken strictly online.

There were student concerns that these budget reductions would mean a decreased number of course offerings, but Dotter said that is not the case at this time.

“I don’t think there are less courses being offered yet; I think we are waiting to see what happens in the spring,” Dotter said. “I don’t think this is at a point where this impacts anything in terms of people trying to graduate or course offerings yet.”

Several factors are credited with causing this downward shift in enrollment numbers including the economy, the job market, NASA budget cuts and and the subsequent domino effect on surrounding community and businesses, and visa issues resulting in a decrease in international student enrollment.

“I don’t know for sure but I believe it is a collaboration of everything,” said Julie Edwards, director of academic business services. “I have been at the university for almost 25 years now and it seems like every 5 years or so something happens with the economy and we have to start over again, reduce the budget to make ends meet and then we try to build back.”

During the Oct. 20 SGA planning and budgeting committee meeting, committee members discussed the possibility that the Indian student graduate population is down because visas are harder to obtain. Members also speculated that the political climate in the United States may have influenced the drop in enrollment.

“They [the Indian student population] aren’t too sure how the environment is going to be for them here because of the whole political situation going on right now with Donald Trump and Hillary Clinton,” said SGA representative Jose Martinez.

Staples pointed out in his email that UHCL will be looking at both potential graduate and undergraduate growth in order to determine where to allocate/reallocate resources.

“The issue of graduate enrollment is critical not only for 2016-2017 but also for the future growth and development of UHCL,” Staples said. “It is an issue we can and must address.”

CORRECTION 11/17/2016: This article has been republished. An earlier version of the article was mistakenly published. Also, Julie Edwards’ title has been changed to read that she is the Director of Academic Business Services.