K-State proposed a $1 million student fee increase for the next school year at the Tuition and Fees Strategies Committee meeting Tuesday. The so-called academic building support fee was proposed to cover $15 million that the university committed for the College of Business building construction, according to Cindy Bontrager, committee member and vice president of administration and finance.
The business building construction totals $55 million, with $40 million coming from private donations and $15 million of university funds, according to Bontrager.
Bontrager said the construction cost is about $36 million, and the rest of the funds will go toward furnishing the building and outfitting it with technology, among other uses.
The $15 million was committed when the university planned for a 5 percent increase in tuition, which was the planned source of the funds.
When the Kansas Legislature and Board of Regents capped tuition increases last year at 3.6 percent, the university suggested a fee increase, Bontrager said. That plan was prevented when the Board decided for the first time that the tuition cap included university-wide fees.
The cap was put in place because the Legislature raised concerns that fees should be included in the total cost of attendance, Pat Bosco, committee member and dean of student life, said. The Legislature and Board agreed on the cap, Bontrager said, in exchange for the state not cutting funding to universities.
According to Bontrager, Shane Bangerter, chair of the Board, said at a recent meeting that “he would consider going over on fees the cap that’s set for tuition, but we better have really good justification.”
Bontrager said she thinks K-State has enough justification to increase fees above the cap. Individual college fee increases, such as the proposed Arts and Sciences fee increase, do not count toward the cap.
Kurt Lockwood, committee co-chair, SGA speaker of the senate and senior in agricultural economics, asked Bontrager why a student referendum was not proposed for a fee increase. He cited how a referendum was used before raising fees for the K-State Student Union renovation.
Bontrager said for a referendum to be required, an academic building must be built using bonding authority, meaning it would be built with debt. The Union renovation used debt; the business building did not.
“For me, it’s an unsettling feeling that students are going to be paying for a building that they did not have a say in and that, for me, is why the referendums are important,” Lockwood said. “It’s kind of a safeguard for students to have their voice heard. It’s always bothered me that students are paying $15 million. If I was around next year, I would be paying for a business building that I personally don’t feel like I should be paying for.”
Bosco said since the fee has not been approved by the Board, students are not paying for the construction yet.
“The university has a $15 million commitment, and (Bontrager) is trying to figure out a way to cover an obligation,” Bosco said. “This committee is a recommending body, and that’s your role, to recommend how we’re going to solve university-wide problems.”
Bosco said the university is trying to be transparent amid the difficulties plaguing the issue.
Bontrager also talked about the proposed budget for next year, which would include a tuition increase of 3.6 percent, or $3.6 million. She said the committee will have to determine recommendations for the uses of the funds.
K-State’s primary sources of revenue for the budget are state funds and tuition, Bontrager said. The roughly $160 million of general funds from the state will probably be frozen for next year, she said.
“Tuition is the resource that we have available to help fund some of these initiatives that we have going on,” Bontrager said.
The chilled plant expansion and Mid-Campus Drive work are two of the major money issues for the university, Bontrager said. Others, she said, were detailed in President Kirk Schulz’s Feb. 19 letter in K-State Today.
In his letter, Schulz announced that a “2 percent general use callback will be instituted for each administrative and academic unit at K-State for the remainder of fiscal year 2016.”
The 2 percent cut equates to about $6 million. This was due to, Schulz said, a stagnant state general fund budget, the legislative tuition cap, the decrease in institutional reserve fund balances, increased utility costs and university enrollment and credit hour decline.
Part of the difficulty, Bosco said, is due to the nature of planning a university budget.
“To maintain our quality, to keep prices down, to keep costs down, sometimes you have to make multi-year investments,” Bosco said. “We did the best job we could with the information we had available.”
Fred Guzek, committee member, Faculty Senate president and professor of business at K-State Polytechnic, put the effects of the tuition cap a different way.
“If you’re expecting a 5 percent increase, and you get a 3.6 percent increase, you have lost 28 percent of what you expected,” Guzek said.
He also compared K-State to a business.
“We’re a business that provides services,” Guzek said. “And you can’t fix a cash flow problem in a service business by cutting costs. Because when you cut costs, you cut service, which cuts your revenue, and you’re right back where you started.”
Enrollment at K-State has declined the past year. The drop in enrollment was a concern of Bosco’s.
“I lose sleep over the total cost of attendance,” Bosco said. “It’s the number one reason why students cannot continue their education.”
Trenton Kennedy, committee member, SGA senator and sophomore in entrepreneurship, asked if private donations could be used to fill in the gap.
“(It would require) educating donors that are compelled enough to want to give to the operating budget of the university,” Bosco said. “That’s not very sexy.”
Bontrager said the budget climate will make budget planning difficult for the university.
“We’re trying to plan and do the enhancements that we really think is going to bring value to our students’ degrees and for your experiences here,” Bontrager said.