Dried-up stimulus funds could spell trouble
posted March 1, 2011
State funding levels for veterinary schools and colleges have decreased substantially in the past few years, and state legislatures have already indicated that trend will continue as they hash out the coming fiscal year's budget.
Thirty-two states reported declines in state support for higher education in 2010-2011, compared with the previous fiscal year, with drops ranging from 0.3 percent to 13.5 percent, according to a report released Jan. 24 by the Center for the Study of Education Policy at Illinois State University and the State Higher Education Executive Officers.
Six of the 32 states saw double-digit percentage losses: Missouri, down 13.5 percent; Delaware, 12.4 percent; Iowa, 12.2 percent; Minnesota, 11.7 percent; Arizona, 11.6 percent; and Oregon, 10.8 percent. Some 16 states did see gains, ranging from 0.2 percent to 24.7 percent, and two states saw no change. Total state spending on higher education was down less than 1 percent. Nevertheless, more than $2.5 billion of the total state spending of $79 billion spent on higher education in fiscal year 2010 came from the federal government in the form of stimulus funds that have now run out, according to the report.
Over two years, state support is down nearly 2 percent. At the same time, the economic downturn has left state coffers depleted, forcing plenty of states to consider additional cuts for 2011-2012.
Take Louisiana, for example; there, the situation appeared troubling enough that AVMA President Larry M. Kornegay sent a letter to Gov. Bobby Jindal Dec. 8. He requested that the Louisiana State University School of Veterinary Medicine be exempt from the state's requested 23 percent to 32 percent higher education budget reduction anticipated for fiscal year 2011, when federal stimulus dollars run dry.
"Nationally, LSU School of Veterinary Medicine graduates have contributed greatly in the areas of biomedical research, education, protection of the environment and, perhaps most notably, disaster preparedness planning," Dr. Kornegay wrote. "We urge you to maintain state funding levels for the LSU School of Veterinary Medicine that will ensure the current program's standing as one that is highly respected and worthy of national accreditation."
Ernie Tanoos, assistant dean for finance and administrative services at LSU's veterinary school, said while the school had discussed the more dire projections, as of February, they were working on a 10 percent scenario.
"Indications are cuts will not be as bad as previously thought, but it is too early to tell," Tanoos said.
Basically all areas are under consideration for reduced funding, Tanoos said, from administration to preclinical and clinical instruction to research to the Louisiana Animal Disease Diagnostic Laboratory.
At this time in 2010, the veterinary school was told to prepare for cuts in the range of 15 percent to 25 percent. It ended up seeing a 12.5 percent cut initially that year. But then in October 2010, the university announced the veterinary school would take a $510,000 midyear budget cut on top of the initial cut.
The half-million-dollar reduction specifically impacted the diagnostic laboratory and its Arbovirus Testing Program, where a clerical-administrative position was eliminated. The diagnostic laboratory announced Nov. 1, 2010, that a new processing fee would be charged for each submission, starting Dec. 1, 2010, because of the decline in state funding.
The veterinary school has increased tuition by 10 percent to make up for the lack of revenue, Tanoos said.
State located, not supported
Other states aren't faring much better.
California Gov. Jerry Brown plans to cut $12.5 billion from the state's budget, including $500 million from the University of California system and another $500 million from the California State University system.
Those cuts would be effective July 1 and would mean an additional $3 million less in funding for the University of California-Davis School of Veterinary Medicine.
"We're state-located rather than state-supported," said Dr. Bennie I. Osburn, outgoing dean of UC-Davis' veterinary school. "There's still some state support, but we're at a tipping point. We've been told to plan for maybe 6 percent to 10 percent in cuts, but now we're probably in the neighborhood of 20 percent."
The total budget for the veterinary school is greater than it was 20 years ago, but not the state funding. In fact, the veterinary school now is at 1997 funding levels from the state, or put another way, less than 50 percent of funding for the veterinary school comes from the state.
To make up for the shortfall, the school has made substantial reductions in the number of staff (140 positions). Further still, the veterinary school is holding open faculty positions vacated through retirement or resignation. Some faculty members have even put a portion of their salaries into grants, but Dean Osburn said the school can't depend on that for long, because the federal government is also cutting back, and it pays many of their salaries.
Another way of addressing this situation has been, as is common, raising tuition.
"It's really students who will have to pay out of pocket for their education, where in the past, the state did through tax revenues," Dean Osburn said. "There's been pressure against that, to hold student fees down, because the state has been cutting back its support, but tuition now provides funding for putting on the programs."
In-state tuition has gone up by about 16 percent in four years and out-of-state by about 19 percent. UC-Davis still awards scholarships, but not enough to keep up with rising fees. Veterinary students, on average, receive $5,000 in the form of scholarships or financial aid.
The school has brought in alternate revenue with two new endowed chairs. UC-Davis also had its best year in 2010 with philanthropy and endowments, but that money goes quickly, Dean Osburn pointed out.
Pounding the pavement
Texas A&M University College of Veterinary Medicine & Biomedical Sciences is one of the few veterinary colleges that has gotten by without raising tuition, but that might not last.
Charles Vrooman, assistant dean for finance and administration at TAMU's veterinary college, said permanent cuts were instituted in the most recent biennial budget, which covered fiscal years 2010 and 2011, of about 2.5 percent, which amounted to a loss of $825,000 in state support. Right now, state funding makes up less than 50 percent of the college's budget, with the rest coming mostly from tuition and fees.
For the biennial budget for fiscal 2012 and 2013, which begins Sept. 1, the veterinary school is anticipating a 10.57 percent cut, or $3.8 million.
"We haven't been able to increase revenue. The economy has not only had an impact on the pet-owning public, but also, it has had a decreasing effect on our hospital caseload. We're holding our own for the time being," Vrooman said. "We're out pounding the pavement for gifts and donations, but there's been limited success in this economic environment."
The veterinary college has submitted a request to increase tuition. It will first have to be approved by the university and then the Board of Regents.
"If we increase tuition, it will have to be in stages and be limited in scope initially," Vrooman said. "It's been a long time since we have had an increase. Our tuition and fees are substantially lower than veterinary colleges similar to Texas A&M's."
The veterinary college has considered reducing faculty appointments from 12 to nine months to save money. Already, the university has gone through an early retirement program, resulting in seven senior faculty members at the veterinary college receiving a buyout from the university. There have also been a few staff layoffs.
"Right now, I don't think we're considering furloughs, but we will abide by what we are asked to do by the state," Vrooman said.
Lack of depth
The University of Illinois College of Veterinary Medicine has become well-accustomed to the chopping block.
Dean Herbert E. Whiteley said for the past decade, the veterinary college has seen funding reductions every year. Just this past fiscal year, the veterinary college had a 10 percent decrease in general revenue funding, which translated to about $2 million. That's on top of the 3 percent to 8 percent reductions seen in the past eight years.
The veterinary college has two major sources of funds: taxes from the state, which come through the university, and tuition dollars, most of which come directly back to the college for its operating budget.
Of the veterinary college's total budget of $19 million, 49 percent is covered by state funds provide and 51 percent is covered by tuition.
"We've increased tuition to offset the loss in state funding. If you look at 10 years ago, general revenue funds provided 75 percent of our total budget, and tuition was about 25 percent," Dean Whiteley said.
Tuition increased 11 percent in 2009-2010, 10 percent in 2008-2009, and 9 percent in 2007-2008.
The veterinary college has decreased expenses as well by not filling faculty vacancies, letting some faculty go, reorganizing some college-wide staff for efficiency, and shutting down programs such as its agriculture facility and clinic in southern Illinois.
"We don't have faculty expertise and the depth in some areas, such as clinical neurology or cardiology. We used to be strong in toxicology but not any more. We have increased emphasis in some other areas, such as primary care, exotics, and emergency and critical care," he said.
The veterinary college has increased its revenue by slightly increasing enrollment and developing its service center, the Chicago Center for Veterinary Medicine.
"We're looking at increasing revenue from the veterinary teaching hospital, relying more on private funding, and we're working on conserving energy," Dean Whiteley said, as the university is making available a company that will help retrofit structures to be more green.
In the future, Dean Whiteley said the veterinary college will look to raising tuition, not filling faculty lines, and potentially laying off more staff.
"We haven't stopped doing things. We're going forward with the new curriculum. The area that gets decreased is our ability to fund research and research-only faculty positions," Dean Whiteley said.