published Sunday, July 24th, 2011

Georgia University spending soars during recession

By James Salzer and Laura Diamond/The Atlanta Journal-Constitution
University of Georgia students enter the main library building on the first day of UGA's fall semester Monday, Aug. 18, 2003, in Athens, Ga.  (AP Photo/University of Georgia, Paul Efland)
University of Georgia students enter the main library building on the first day of UGA's fall semester Monday, Aug. 18, 2003, in Athens, Ga. (AP Photo/University of Georgia, Paul Efland)
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While billions have been cut from state government’s budget during the Great Recession, the University System of Georgia has been on a comparative spending spree.

Spending has gone from $5.4 billion in 2007 to a projected $7 billion this year, as colleges built expensive buildings, hired high-priced administrators, bought top-of-the-line technology, added football teams and dozens of new academic programs and even bought a golf course.

To help pay the rising costs, the system raised tuition and fees. Tuition at the University of Georgia has increased by 50 percent since 2008, and student fees have increased 87 percent.

System officials say growing enrollment and cuts in state funding are to blame for students paying hundreds or thousands of dollars more annually.

But a monthlong Atlanta Journal-Constitution review of spending in Georgia’s 35-college University System found:

• The amount of money spent paying college deans, vice presidents and presidents increased up to 30 percent during the recession, from 2007 to 2010. Spending on top officials grew faster than salaries for professors.

• Dozens of degree programs graduated 10 or fewer students last year.

• Student fees — most of which are approved by students — have paid for hundreds of non-academic pursuits, including a golf course in Statesboro, concerts and climbing walls. Fees paid to field a new football team at Georgia State University and will help pay for one at Kennesaw State University.

• The University System added 40,000 student housing beds at a cost of $1.9 billion since 1991, most in the past decade. These are not your father’s dorm rooms. When Georgia Gwinnett College opened its dorms last year, students found 46-inch flat-screen HDTVs in living rooms.

Spreading and Spending

While the state technical college system consolidated campuses to cut costs, the University System expanded. It opened Georgia Gwinnett — at a cost of $200 million by the end of this year — just before the recession hit and recently allowed six two-year colleges to offer a limited number of bachelor’s degrees, including some programs already offered at campuses as close as five miles away.

As the AJC reported in May, the system has been paying hefty salaries to former chancellors and presidents. Former Chancellor Stephen Portch, for example, was paid $823,000 over nine years for consulting after he retired.

State lawmakers consider funding higher education a top priority, regularly borrowing hundreds of millions of dollars for construction projects on top of the more than $1.7 billion in taxpayer funding the state provides colleges.

But they have grown frustrated in recent years, arguing that the system — which is run by an independent Board of Regents appointed by the governor — isn’t sharing enough in spending cutbacks. The overall state budget is down about $3 billion since 2008. That includes a $1.2 billion reduction in state funding for K-12 schools.

Former University System Chancellor Erroll Davis, who left June 30, said colleges are putting public money to good use and have cut “hundreds of millions of dollars” in spending. This year, lawmakers reduced funding to the University System by about $170 million.

College officials note enrollment has risen more than 20 percent since 2007.

“What we don’t want to give up is our mission. Our mission is to create the future,” Davis said. “We don’t change our mission because of the economy.”

But how the system spends the money is often left up to schools, not the central office that receives state funding from the General Assembly.

The Board of Regents allocates lump sums of money to Georgia’s public colleges. The colleges decide how to spend the money. In some cases they compete for programs, students and money. Sometimes the result is seemingly duplicative spending.

Some parents and students wonder if all the money is going to the right place.

“At this point, the No. 1 thing they should be spending money on is ways to keep our kids in school,” said Gwinnett County parent Stephanie Kratofil, whose daughter attends Georgia Southern University. “I just don’t know if they are doing the right thing for our kids.”

Enrollment Rises

The skyrocketing cost of higher education is an issue across the country. Expenses were rising before the recession, but falling tax revenue in recent years meant states had less money to spend on colleges. Dozens of states have cut funding and raised tuition over the past five years.

A few states have capped enrollment to current funding levels, but Georgia has continued to increase enrollment. It has simply increased tuition and fees to help fill funding gaps.

A decade ago, the state paid 75 percent of the cost of educating a student. Today it is 54 percent, with students and their parents picking up most of the rest.

Rep. Bill Hembree, R-Winston, former chairman of the House Higher Education Committee, said he is amazed the University System has continued to spend more in the midst of the state’s fiscal crisis.

“It says to me that this system is out of control with no one leading,” Hembree said. “The system is so large now. ... Ultimately, the taxpayers and the kids trying to pay the tuition get stuck paying the price.”

Georgia Chancellor Hank Huckaby, a former legislator who took over July 1, said, “The growing consensus is we’ve got to step back and look at what we’re doing and what it’s costing.”

Huckaby said the University System is looking at multiple options to be more efficient. The system is projected to enroll 400,000 students within the next decade, and the new chancellor said colleges can’t afford to keep operating the same way they have in the past.

“There is no question that we cannot have 200 percent increases in tuition,” he said. “We must be creative and responsive.”

Still, in the end, Huckaby said the system will need more state funding. The state’s per pupil funding is about the same as it was in 1994.

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This article doesn't take into account that certain tax allocations have to be spent on specific things and if not then the money disappears. Construction of new buildings is usually a big part of this. Things get renovated, enlarged, or new buildings are built lest the money would be taken away.

July 25, 2011 at 9:36 p.m.
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