State budget cuts continue with no end in sight

Veterinary colleges trying to do more with less
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Another year of large state budget gaps has further weakened organizations and institutions reliant on government funding, perhaps permanently. It comes as no surprise, then, that funding shortages have affected most U.S. veterinary schools and colleges.

Dr. Marguerite Pappaioanou, executive director of the Association of American Veterinary Medical Colleges, said the association estimates that $45 million to $50 million in public support has been pulled from the nation's 28 veterinary schools during the past two years.

Dr. Brown and former vet tech and vet students
Dr. Andrew J. Brown (left) and former veterinary technician students and veterinary students from Michigan State University work together in a clinical setting. MSU's College of Veterinary Medicine could potentially suspend its veterinary technology program because of budget constraints.

"State budgets and what (legislatures) can contribute are going through massive cuts, not just with veterinary schools, but all of higher education. All of the land-grant universities are undergoing major cuts from state legislatures," Dr. Pappaioanou said.

Michigan State University College of Veterinary Medicine, for example, has put an indefinite halt on its veterinary technology program because of financial constraints. The four-year program is one of only a few veterinary technology programs housed within a veterinary college. (Purdue University's program began not long after Michigan State's in the late '70s, and Mississippi State's program just started accepting students this academic year but has not yet applied for accreditation.)

The moratorium at MSU will take effect this fall. This means that no new students will be admitted into the program after this time. The moratorium allows the school four to six months to evaluate its options. The college is expected to make a final decision on whether it will permanently discontinue the program by this August.

Dean Christopher M. Brown said the moratorium decision was entirely based on current budget challenges. The overall budget shortfall in the college's general fund could be up to 20 percent, which represents about a $4 million shortfall in state appropriations.

"It's one of several options we're looking at to accommodate budget adjustments necessary over the next few years," he said. "We're not going to make a commitment to students that we can't fulfill."

Dr. Brown said the college is considering a variety of other measures, one of which is eliminating some jobs in the college's budget, potentially faculty or support positions. Faculty appointments may also be scaled back from an annual year (12 months) to an academic year (nine months).

"We're looking at creating ways of enhancing revenue from units, but in the current economy it's difficult to make extra income," Dr. Brown added.

Michigan State isn't the only veterinary college that has been forced by limited state funds to cut back its offerings. For the University of California-Davis School of Veterinary Medicine, the reduction in state funds, combined with a declining market for veterinary services at the William R. Pritchard Veterinary Medical Teaching Hospital, has resulted in a drop of $3 million in revenue for the past academic year and an additional $3 million funding gap for the current academic year.

Administrators have already had to eliminate 130 staff positions (more than 50 from the teaching hospital alone), close the Fresno branch of the California Animal Health and Food Safety Laboratory System, place 12 faculty recruitments on hold, reduce programs, and impose temporary pay cuts and work furloughs on all faculty and staff. The school continues to look at ways to restructure administrative activities and generate additional revenue.

"Despite these actions, we are not done yet. The furloughs are merely a stopgap to allow the university an opportunity to make permanent cuts, and projections for next year are equally as bad," Dean Bennie I. Osburn said in a statement to the AAVMC in January.

The teaching hospital's in-house food animal program was rumored to be closing because of a decline in caseload and revenues. Dr. Osburn denies that the program is closing and has made assurances it will remain open.

Annually, the in-house program averages a loss of more than $200,000, despite substantial teaching subsidy funding. The program staff sees about 1,200 animals, half of which are bovine, with the remainder made up of sheep, goats, and potbellied pigs.

The school is, however, looking at whether it could structure the program differently to provide an improved clinical instruction environment. Dr. Osburn has requested that the food animal faculty redesign the clinical instruction program to consider the resources available—personnel, regional caseload, and budget—to meet professional training objectives.

The school apparently will need to continue looking at more alternatives to how it does business, as it has recently been alerted that the next round of state funding reductions will be at least $2.6 million beginning in July.

The situation doesn't look much better out East, where it was announced in early February that state appropriations for the University of Pennsylvania School of Veterinary Medicine would be slashed 30 percent, from nearly $43 million to $30.5 million. The school receives about 35 percent of its funding from the state.

In the past year, the school's budget has dropped from about $96 million to $86 million, and 150 positions have been lost through layoffs and attrition, including veterinary hospital technician positions.

The most recent cuts will mean elimination of the Center for Infectious Disease Research and reduced financial aid. The school has historically provided $1,000 in scholarship money to each in-state second- and third-year student. This incentive will be eliminated next year, said Maureen Harrigan, Penn Vet's chief financial officer.

Also in jeopardy is the James M. Moran Jr., Critical Care Center, which is still under construction at the New Bolton Center campus in Kennett Square. The 18,540-square-foot facility will be the largest clinical addition to the hospital; however, there are doubts as to whether there is enough money to open the center as scheduled this summer.

In addition to cutting expenses, universities have looked to increasing revenues to balance their budgets.

Colorado State University administrators discussed plans in late January to hike undergraduate resident tuition by about 9 percent, or $434, for the coming academic year, while nonresidents would likely pay about 3 percent, or $622, more. Students at CSU's College of Veterinary Medicine and Biomedical Sciences may feel the impact of higher tuition as well. Plans are to have in-state graduate students pay an extra 15 percent, or $970.20, annually, while out-of-state graduate students would pay an extra 5 percent, or $905.45, annually.

Cornell University's board of trustees intends on upping tuition for its veterinary students starting with the 2010-2011 academic year, too. State residents in the New York State College of Veterinary Medicine will see a 4.5 percent increase in tuition, which means they will pay $27,000 annually. Tuition for nonresident veterinary students will increase by 5.6 percent to $41,700.

Dr. Pappaioanou said sources of financial support for veterinary schools are undergoing a major change.

"Colleges are starting to look at different ways of doing things to be more economical, more efficient. You do see a lot of creative, neat ideas emerge" during hard economic times, Dr. Pappaioanou said.

She compares the situation to society's shift from horses to cars for transportation. Back then, many thought the profession was done for, which clearly did not turn out to be the case.

"We'll get through this. We have a lot of good people in this profession," Dr. Pappaioanou said.

As most states can attest, the current recession has caused a steep decline in state tax receipts. This has resulted in dramatic cuts in funding for public services and deficit spending, which look to continue for the foreseeable future.

An increasing number of states are struggling to keep true to their 2010 budgets. Revenues falling short of projections have caused midyear shortfalls in 41 states—some of which have already been addressed—totaling $35 billion, or 6 percent, of these budgets.

These new shortfalls came after states closed gaps when adopting their 2010 budgets this past year. Counting both initial and midyear deficits, 48 states have addressed or still face shortfalls in their 2010 budgets totaling $194 billion, or 28 percent, of state budgets—the largest gaps on record.

In fiscal year 2011, projected deficits total $102 billion, or 17 percent, of budgets for 41 states. These totals are likely to grow as revenues continue to deteriorate.

When all is said and done, these numbers suggest that states will have dealt with a total budget shortfall of at least $350 billion for 2010 and 2011. (This includes both gaps already closed and gaps projected for the future.)

Source: Center on Budget and Policy Priorities

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