Editorial: Using reserve fund for UConn budget hopefully a short-term measure
Published: Sunday, September 8, 2013
Updated: Sunday, September 8, 2013 22:09
The university’s budget is typically not one of the more interesting or exciting news items, but this year it is perhaps unusual. Projected expenditures are far outpacing expected revenue, by $28.5 million to be exact, or around three percent of the total budget. As a result, UConn has to dip into our emergency reserve fund.
The emergency reserve fund will likely be at its lowest level in many years. Last year the university had $71.8 million in reserves. Assuming no more is withdrawn that the aforementioned $28.5 million – and that is of course only an assumption – the fund this year would be left with around $43 million, a level not seen in at least a decade. And back then, the university’s operating budget was much smaller than now.
It is less than ideal that we find ourselves in a position of coming so close to depleting the emergency fund. At the same time, this shows the prudence of keeping such money on standby. How else would we be able to cover the gap? Increasing tuition is hardly the most popular option. And it hardly seems likely that the state legislature would pitch in, given the budget deficits they are facing themselves.
Actually, some of the university’s financial troubles may be unforeseen consequences to what is largely a positive development. UConn’s rising national stature in combination with increased investments has made the university a much more attractive option for high school seniors. Freshman enrollment this year has surged 21 percent higher than last year alone. There are other reasons for the university’s expenditures, but that is certainly one.
There are other factors as well, not all of which were known long in advance. As detailed by the Connecticut Mirror, the budget was already $18.7 million in the red before June when the state began requiring UConn (as well as other public state agencies) to contribute more to employee’s pensions and health benefits.
It is a simple matter of common knowledge that surpluses are better to have than deficits. While UConn tries to get its financial house in the best condition, the emergency fund is an appropriate place to draw money from to cover an unprecedented budget gap. Let us hope that we learn from this situation and never have to use that much from the reserves again.