Less income from states, teaching hospitals, private sector spells cutbacks
Posted May 16, 2009
The recession's impact on veterinary schools and colleges can be seen in what isn't on those campuses. Mothballed teaching positions, delayed building projects and equipment purchases, and smaller endowments plague just about every institution, officials say. All this after many of them were required to return portions of state funding midyear and before they have had a chance to deal with the dramatic cuts expected for this coming fiscal year's budget.
Dr. H. Michael Chaddock, deputy executive director of the Association of American Veterinary Medical Colleges, said every veterinary college has been affected to some degree.
"The majority of them are state-funded institutions. Really, today, that is a misnomer. They're not state-funded but state-assisted," he said.
State funding accounts for 10 percent to 40 percent of veterinary colleges' budgets. The percentage has steadily decreased for the past decade, Dr. Chaddock said, forcing veterinary colleges to rely more on increased tuition or teaching hospital fees, private donations, grants, and research funding from the private sector. He says this also has caused institutions to be run increasingly like businesses.
"Deans operate more as a CEO, now. Certainly any dean would tell you more of his or her time is spent on economic issues, fundraising, and development," Dr. Chaddock said. "There are only 24 hours in a day, so whatever increased time the dean or associate dean is spending in those areas, that's time taken away from academics, research programs, and collaboration."
This year at the Washington State University College of Veterinary Medicine, Dean Bryan K. Slinker says he has dealt with proposed state budget cuts that he calls "unprecedented in magnitude."
At one point, the state House's budget proposal called for cuts of about 29 percent, or more than $151 million for Washington State's 2009-2011 budget. The state Senate called for a 20 percent cut, and Gov. Christine Gregoire proposed an approximately 12 percent budget cut in addition to a 14 percent tuition increase for the next two years.
Dr. Slinker worked with Provost Warwick M. Bayly to keep the college's tuition increase less than the governor's proposal, because veterinary college tuition is already three times the undergraduate tuition.
Dr. Slinker said, so far, he hasn't seen much change in the number of students admitted. Only one Washington resident who applied declined admission for next year for financial reasons.
"We are seeing some impact on Western states like Arizona and Montana. They're all having budget troubles and are not certain how many students they can sponsor (at Washington State)," Dr. Slinker said. "We're seeing a lag in decision making from those students on whether they'll come. It's just because states aren't sure how many spots they can fund."
Dr. Chaddock said his association won't know for a few months about the number of students applying to veterinary colleges. For the past few years, he said, the number has remained steady at approximately 6,000.
"In times of recession, the number of applicants for other health professions has gone up," but veterinary medicine has not seen that bump in the past, Dr. Chaddock said. "I'm not sure if we'll see that this year, either."
For current veterinary students, less funding for scholarships may have the greatest impact of all the cutbacks. Often they are reliant on endowments and private donations, Dr. Chaddock said, so if money isn't coming in from donors, or investment income is down, that can spell trouble.
"As we're getting to the end of the school year and we have all these honors banquets, and scholarships are doled out, it will be interesting to see if the numbers are down. I suspect they are overall," he said.
"Deans operate more as a CEO, now. Certainly any dean would tell you more of his or her time is spent on economic issues, fundraising, and development, There are only 24 hours in a day, so whatever increased time the dean or associate dean is spending in those areas, that's time taken away from academics, research programs, and collaboration."
— DR. H. MICHAEL CHADDOCK, DEPUTY EXECUTIVE DIRECTOR,
ASSOCIATION OF AMERICAN VETERINARY MEDICAL COLLEGES
Washington State University College of Veterinary Medicine is keeping a close eye on whether more
students are declining admission because of worsening financial circumstances.
Scrimping and saving
Even reaching out to alumni may be harder, as the University of California-Davis School of Veterinary Medicine has learned. To supplement its income, the school has focused on connecting with alumni and friends, "but the problem is (Bernie) Madoff made off with too much money," Dean Bennie I. Osburn said. "And most of the foundations we've gone to have told us revenues are way down and they won't have money this year, so that is a bit bothersome."
In the past two years, the 10-campus university system overall has seen a drop-off of $450 million in state funding. For the current fiscal year, the school received $41 million but was required to give back some of that money to the state. It doesn't look like things will be getting much better, either. Dr. Osburn estimates the school will see a cut in state funding of about $1.2 million this coming year, bringing the amount to $37.5 million. Anymore, the veterinary school's $155 million budget is hardly covered by state funding.
"If we look at where we were in 1991, before that budget shortfall came about, to now, we only have two-thirds of the funding, based on (the consumer price index)," Dr. Osburn said. "We haven't kept up with CPI, and there have been budget cuts every four to five years. We're out considerably from where we were in '91 in having core support (from the state)."
In fact, Dr. Osburn said the school never fully recovered from the early '90s cutbacks. To this day, 18 of the school's 28 vacant faculty positions have sat unfilled for nearly 20 years. Because of this chronic backlog, the school hasn't yet implemented a hiring freeze, Dr. Osburn said, but "we have slowed down and are pausing and being strategic in our hires."
The school has eliminated 45 staff positions, "And we're probably not through with that this year," Dr. Osburn said.
The biggest setback for UC-Davis, according to Dr. Osburn, is the likely delay in construction of a $92 million building that would house research and basic sciences activities for the school. The shovel-ready project was scheduled to move forward with leased revenue bonds, but the state cannot pay them anymore.
Dr. Chaddock said if specific money tied to a building has been raised, the project will still go forward. That's why some colleges, such as the Iowa State University College of Veterinary Medicine, are going forward with large-scale infrastructure projects, despite having to make cuts elsewhere.
Iowa State dedicated the Dr. W. Eugene and Linda Lloyd Veterinary Medical Center last fall. The $48 million project was the first of a two-phase expansion program to increase capabilities of the 32-year-old veterinary teaching hospital. Dean John U. Thomson said the project is still on budget and Phase II will start July 1. It will be a $45.1 million expansion and renovation for the companion animal teaching hospital.
Meanwhile, the college has delayed projects because of midyear funding reductions. For the next fiscal year, it expects to see its state funding cut by 8 percent, Dr. Thomson said.
Funding restrictions will force the college to reorganize and restructure, he said. The college made a one-time increase to its student numbers five years ago and has made tuition adjustments every year since then as part of its strategic plan. Because of this, Dr. Thomson remains optimistic.
"If we follow (the plan), we'll be able to weather this thing," Dr. Thomson said.
Students at the University of California-Davis School of Veterinary Medicine study bone structures.
The school estimates a $1.2 million drop in state funding for this coming fiscal year.
At the Kansas State University College of Veterinary Medicine, Dean Ralph C. Richardson also remains upbeat, but for a more unique reason—the Kansas City Animal Health Corridor and the selection of Kansas as the location of the federal government's National Bio and Agro-Defense Facility.
"There appears to be a greater buffering of economic impact in our state compared to what I have read about in other states. Clearly, there are job opportunities that are here ... my hope is our economy will stabilize so we can avoid furloughs and laying people off," Dr. Richardson said.
Kansas State also has implemented a soft hiring freeze, meaning it has eliminated a few vacant positions but continues to fill key positions, "particularly ones that would generate revenue," Dr. Richardson said—for example, at the college's Veterinary Medicine Teaching Hospital. There and at many other teaching hospitals, Dr. Richardson and other deans report flat or declining revenues as a result of seeing fewer patients, particularly patients that need more expensive care.
"We see clients more cautious of how they spend their funds, which causes us to work harder on communication and explanation of what we recommend," Dr. Richardson said. He noted that the teaching hospital has a satellite teaching hospital in Omaha, Neb., which provides diversification of income.
Kansas State University's Veterinary Medical Teaching Hospital may see lesser earnings than in
previous years, Dean Ralph C. Richardson said.
At Tufts University, Dean Deborah T. Kochevar said the downturn has caused the Cummings School of Veterinary to be not only more efficient but also more innovative and entrepreneurial.
For example, the school hopes to create a master's degree program in conservation medicine.
"For us, that type of program will broaden our presence in that arena and will be another area for tuition to be derived from," Dr. Kochevar said.
Tufts, one of two fully accredited private veterinary schools, receives about $5.5 million from Massachusetts annually. At about 8 percent of the school's budget, she said, that puts Tufts last in state appropriations among veterinary colleges. Also, with less state revenue, legislators had at one point proposed to cut off the school's funding entirely. Dr. Kochevar figures very limited state funding can be both a challenge and a blessing, because even if the school sees cuts, it's less difficult to make up the difference.
Cornell University's New York State College of Veterinary Medicine, which is both state-funded and privately endowed, has taken a hit on both fronts. Dean Michael I. Kotlikoff said the reductions (7 percent from the state and 15 percent from the endowment) are somewhere in the middle among other state public and private schools this year.
Commenting on those cuts in state funding and private endowments, Dr. Kotlikoff said, "It's a good thing in some ways that we can leverage those resources and fill in the gaps."
Besides short-term cost-saving measures, such as wage freezes and program reorganizations, Cornell has focused on long-term saving and revenue-generating initiatives.
Among them, the college hopes to grow its class size—from 86 to 120—within two years and form collaborative opportunities with international partners in Qatar and China.
In addition, Cornell has a plan to improve its primary care and teaching activities by partnering with the local chapter of the Society for the Prevention of Cruelty to Animals. Students would perform spays, neuters, and other primary care procedures, thereby lowering costs for the college.
Dr. Kotlikoff also mentioned the possibility of extending the college's clinical hospital presence in the New York metropolitan area. Doing so would not only provide students with a more comprehensive clinical caseload than at the college's referral facility in Ithaca, N.Y., but also provide a way to underwrite the cost for its residency program and provide greater exposure to more potential donors.
Dr. Kotlikoff said those partnerships are ways in which the college can fulfill its core missions while lowering its own costs and performing as effectively as possible.
"The bottom line is veterinary education is extremely expensive, and the profession is becoming more complex and larger, and state funding is not keeping up," Dr. Kotlikoff said. "In the future, it's only going to continue."