ASU System to hold tuition flat, cut costs

Measures will help avoid future strain, trustees told

The Welcome Center at Arkansas State University in Jonesboro is shown in this 2019 file photo.
The Welcome Center at Arkansas State University in Jonesboro is shown in this 2019 file photo.

Spending cuts approved Thursday across the Arkansas State University System are necessary but will avoid major financial disruptions to full-time employees, System President Chuck Welch told trustees.

Trustees decided Thursday to mostly keep tuition the same next year at ASU System schools while decreasing their expenditures in response to the coronavirus pandemic.

Those strategies are designed to avoid piling on to financial struggles of students and families because of the pandemic, and to account for a potential drop in state revenue appropriations and enrollment related to the economic downturn.

At the same time, the strategies present a challenge to institutions that, like nearly all nationwide, have relied on increasing tuition and fees to keep up with rising costs since the last recession.

"I would be remiss if I didn't point out that these spending cuts are appropriate, and they're necessary, but ... some of these cuts we can't expect to continue forever," Welch told trustees Thursday.

Trustees approved tuition and budgets in separate voice votes, both without opposition. Trustees voted on tuition, room and board and fees at only two of the campuses because the other four requested no changes.

Tuition for in-state and out-of-state students at Arkansas State University in Jonesboro's degree centers will decrease, while room and board rates will rise at the Jonesboro campus. The only other cost-of-attendance changes are reduced fees for specific technical programs at ASU Mid-South college in West Memphis.

Campuses also will collectively cut several million dollars from their budgets, with ASU in Jonesboro cutting the largest amount, nearly $6 million from its more than $200 million education and general and auxiliary budgets.

The biggest percentage cut was 8.3% at ASU-Newport, dropping $1.4 million to $16.9 million. There, leaders will halt promotions and cost-of-living adjustments for employees and reduce travel, supplies, services and advertising and promotion, among other things.

The cuts across system schools don't include layoffs, furloughs or payroll reductions to full-time employees, officials said.

The ASU System joins the University of Arkansas System and the University of Central Arkansas, which have kept tuition largely this same from this year to next. The University of Arkansas for Medical Sciences will charge tuition for the first time for two programs, and UCA increased mandatory fees to pay for a bond issue.

"To me, as a trustee, this is always kind of the hardest part of the year because it's never easy," ASU System Trustee Price Gardner said. "From a cost standpoint, so few of our costs are really truly variable. They're fixed."

Expenses don't become cheaper, he said.

Gardner said he would approve the budgets before him because he believed they were "good and sound" and worked well within the parameters of the coronavirus crisis.

"Usually balancing that budget, we're sitting here and struggling with what to do with tuition and fees," he said. "On the expense side of things here, we weren't able to do that."

Trustee Tim Langford also thanked system leaders before the votes and, like Gardner, noted his optimism for a system project expected to save money permanently: Enterprise Resource Planning.

In that process, the system is working on consolidating business operations among all of the system schools, eventually saving money for each institution. However, the upfront cost of that effort means additional spending now for expected savings later.

Along with flat tuition and reduced budgets, trustees approved Thursday giving the system the authority to seek a loan of up to $5.3 million at an interest rate not to exceed 4%, for up to five years to pay for the project.

ASU System schools plan to accommodate for reduced revenue, which also is expected at UA System schools and elsewhere, by halting capital projects, putting off planned deferred maintenance projects, cutting professional development and travel expenses, and freezing new hires.

ASU in Jonesboro anticipates $5.2 million less from state general revenue appropriations and $6.2 million less in tuition, according to the budget summary submitted to trustees. In addition to the other measures, the university plans to offer a voluntary retirement incentive and cut part-time labor, supplies and services by 20%. Officials also anticipate using reallocated resources generated from transitioning the Student Health Center to the New York Institute of Technology, which operates the School of Osteopathic Medicine with ASU at the Jonesboro campus.

ASU-Beebe plans to spend 7% less to coincide with an expected 7% fall-off in revenue. That puts the school's budget at about $27 million for education and general and auxiliary operations. Cuts will come from attrition and "rigorous review" of vacant positions, the college's budget summary states.

In West Memphis, ASU Mid-South will reduce its budget 4.8%, to about $13 million in education and general and auxiliary operations next year, by cutting classroom supplies, nonessential professional development, technical upgrades and allocations to some partners.

ASU-Mountain Home's budget will drop from about $11 million this year to about $10.7 million next year. The college will eliminate vacant positions and a custodial services contract and reduce travel and professional development. At the same time, the college will increase its institutional scholarships.

At the system's newest campus, ASU-Three Rivers in Malvern will budget about $8.6 million in education and general and auxiliary operations. Staff members won't get raises; faculty members won't get step increases; employees won't go to conferences or travel; many open positions will remain vacant; a campus security contract will be terminated; and the school's truck-driving program will be discontinued.

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Tuition and fees at ASU System campuses

Metro on 06/05/2020

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