In order to become less reliant on unstable state funds, Ohio State is looking to become more businesslike, which may call for another tuition hike.
“Our share of state funding is going down and it’s becoming a 20-year trend,” said William Shkurti, senior vice president for business and Finance at OSU. “Higher education is getting smaller and smaller portions of the state budget.”
State support has declined from 52 percent of OSU’s instruction budget in fiscal year 1983 to 37 percent in fiscal year 2003, said Shkurti.
To make up for the decrease in funding, Shkurti said OSU is looking into different ways to generate revenue – the most unsettling way being another increase in tuition.
“We are sensitive to the fact that we can’t depend on tuition increases alone to get us where we want to be,” Shkurti said. “Yet we may need to raise tuition more than we historically have in the past. It is still too premature to speculate how much, but we should know by early spring.”
Michael Goodman, Undergraduate Student Government president, said he feels the university needs to become more businesslike while not putting more stress on the students.
“Students are hard pressed for cash enough with the tuition increases each year,” Goodman said. “Though the most flexible component of the university is tuition, the university needs to look at how they can be more creative in coming up with other ways to be entrepreneurial without putting the burden on the students.”
Shkurti said OSU is looking at such alternative sources as private fundraising, sponsored research from both the government and private entities, more corporate sponsorships, and more entrepreneurial business programs which pay for themselves, such as the Schottenstein Center and The Blackwell Inn.
“The goal of The Blackwell is to be a self-supportive unit on campus,” said Doug KoyleKoyle, general manager of The Blackwell Inn. “We don’t want to burden the university, but at the same time, we support the academic mission and the conferences and guests of the university.”
Koyle said they are shooting to be totally self-supporting by fiscal year 2006.
Corporate sponsorships, such as the contract OSU has with Coke, could also help generate revenue.
“Coke is given exclusive rights to serve in our vending machines and residence halls, and in exchange, Coke will provide at least $12 million in additional funds for various student programs over the life of the contract,” Shkurti said.
According to the first quarter budget report, the Medical Center accounted for 34 percent of all Columbus campus revenues from all sources in fiscal year 2003.
The OSU Health System’s financial status also remained stable. Patient revenues grew by $120 million, and the Health System improved its net operations by $3.7 million over fiscal year 2002 to $8.1 million.
Lee Walker, budget director for OSU, said the university has the ability to rely less on the state.
“We’ve already begun to become more entrepreneurial, it has become the trend,” Walker said. “The challenge is to continue to develop these entrepreneurial ideas.”
One way Walker said OSU is trying to motivate departments to become more efficient is by a change in the budgeting process from the traditional budget to budget restructuring.
Traditional budgeting used to award departments a 3.5 percent increase, regardless of its quality.
“Now it ties the amount of budget increase a department gets with the quality of the department,” Walker said. “If students flock to the classes in a certain department, and this department does more research, that department will get more money.”
