UConn adopts budgets for fiscal year 2023

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UConn enters fiscal year 2023 with budgets that increase institution-funded financial aid for students and anticipate a largely normal post-pandemic academic year. The UConn Board of Trustees on Wednesday unanimously adopted the FY23 operating and capital budgets for UConn Storrs and regional campuses as well as UConn Health. The new fiscal year begins on Friday and […]

UConn enters fiscal year 2023 with budgets that increase institution-funded financial aid for students and anticipate a largely normal post-pandemic academic year.

The UConn Board of Trustees on Wednesday unanimously adopted the FY23 operating and capital budgets for UConn Storrs and regional campuses as well as UConn Health. The new fiscal year begins on Friday and ends on June 30, 2023.

However, the operating budgets have nuances that make it difficult to directly compare many items with those of last year. Indeed, the end of most federal COVID relief funds creates the incorrect appearance of a sharp drop in financial aid between FY22-23, and state aid to UConn appears to have increased significantly. because it includes reimbursements for salary increases negotiated for FY23.

Taking these changes into account, FY23 budget plans call for an academic year in which the state’s block grant to help support its operating expenses at UConn is essentially flat; UConn Increases Multimillion-Dollar University-Funded Financial Aid; and the University’s research enterprise and clinical operations continue to grow strongly.

The FY23 budgets include $1.7 billion for UConn Storrs and regional campuses, and nearly $1.6 billion for UConn Health’s clinical, research and academic operations.

In both budgets, the numbers were boosted by one-time state allocations to help cover the coming year’s expenses of collective bargaining wage increases, which a coalition of Connecticut public servants’ unions has negotiated with the state; ancillary costs inherited from the past; and the 27th additional pay period in calendar year 2022.

However, there remains uncertainty about how much the state will provide to UConn in FY24 to help cover salary increases negotiated that year. University budget officials say this remains a potential risk area they will be watching closely, along with rising benefit costs and other potential tax impacts in the coming years.

UConn’s FY23 budget also reflects emerging from the worst of the COVID-19 pandemic, which has forced the University to significantly reduce its on-campus population and absorb associated revenue losses. Several fee-based degree and certificate programs were also affected when many working professionals, with whom they are traditionally popular, were unable to enroll due to the pandemic.

“In FY23, we anticipate a post-COVID recovery in on-campus housing capacity and enrollment in entrepreneurship programs. While certain COVID protocols and precautions remain in place and student and employee safety remains a top priority, the budget impact will be significantly reduced,” said Lloyd Blanchard, Acting Vice President of Finance and Chief Financial Officer of UConn.

UConn continues to focus on safeguarding academic excellence and providing strong support for students, including with a FY23 financial aid budget of approximately $245 million.

This includes $165 million funded specifically by the University, a 7% increase over last year in this category, which uses a portion of dollars generated from tuition. The rest comes from state and federal sources and scholarships; in fact, about two-thirds of UConn undergraduates receive some form of gift aid that they don’t have to repay.

The state requires UConn to set aside at least 15% of tuition revenue for need-based aid, but the University exceeds that figure with nearly 17% set aside, along with other need-based aid. the merit it also offers. “It’s a commitment that the leadership of the University will maintain and continue,” Blanchard said Wednesday.

Overall, the state’s annual lump sum grant is expected to represent approximately 26% of Storrs/Regional revenue in FY23. It will be approximately $485 million, of which approximately $63.7 million include one-time allowances to help cover employee salary increases negotiated through collective bargaining, legacy social costs and the 27th pay period of calendar year 2022.

However, the University will have to go back to the General Assembly to request assistance to cover the collective bargaining increases for FY24, as the salary changes are permanent, but the FY23 allowance was not only a single amount. Blanchard said it’s not yet clear whether the state will fully cover those costs: “That’s a risk we’ll be keeping our eyes on,” he told trustees on Wednesday.

Fees and tuition will generate approximately 9% and 30%, respectively, for fiscal year 23 which begins Friday, with the remaining revenue coming from grants and contracts, business activities such as ancillary services and sales, and from related sources.

Fee and tuition categories include fee adjustments approved in April to help cover rising costs of delivering specific services; and the tuition rates set in the five-year tuition plan adopted in 2019 for the 2021-25 financial years.

Under the FY23 portion of this five-year plan, in-state tuition will increase by approximately 4.3%, or approximately $642. These figures have been calculated specifically to reflect the impact of state benefits and state aid costs at UConn, inflation in the higher education sector nationwide, and related tax measures. .

Like the Storrs and regional campuses, UConn Health enters FY23 with an operating budget impacted by rising benefit rates beyond its control, largely due to inherited obligations from the State pension and health care for state pensioners.

However, UConn Health continues to increase patient revenue, reversing the inevitable decline it experienced when it had to scale back many non-emergency business operations during the COVID pandemic. In FY23, it expects to generate approximately $752.2 million in net patient revenue, an increase of nearly $38 million from FY22.

“We expect greater patient flow across all of our entities for UConn Health,” Jeffrey Geoghegan, UConn Health’s chief financial officer, told the board on Wednesday.

UConn Health’s revenue forecast also includes an estimated $418.9 million in state funding, of which $115.5 million in one-time funding will help cover employee wage increases negotiated as part of the negotiation. collective, inherited incremental costs and the 27th pay period in calendar year 2022.

“We are grateful to the Governor and the General Assembly for their continued support of UConn Health and recognize the ongoing budget constraints on the State of Connecticut,” said Dr. Bruce Liang, MD, UConn Acting Chief Executive Officer. Health and Dean of UConn. Medicine School.

“UConn Health will continue to manage its budget by closely monitoring state support, clinical volume and benefit costs,” he said. “We will also continue to focus on providing excellent patient care, protecting academic excellence and supporting the research mission.”

Like the UConn Storrs and regional campus budget, UConn Health is monitoring certain unknowns that could affect FY23 and beyond, including whether new COVID variants or spikes in cases could impact patient volume. in hospitals, medical offices and dental clinics.

Like other medical institutions nationwide and throughout Connecticut, UConn Health is experiencing increased employee turnover, particularly in nursing positions, and is focused on recruiting and retaining employees to address the shortages.

UConn Health has also been impacted by global increases in the cost of goods and decreasing availability: “How we respond to and navigate this global supply chain shortage will be a priority for the next year,” said Geoghegan Wednesday.

Also on Wednesday, the board approved capital project budgets for UConn Storrs/regionals and UConn Health.

These budgets are distinct from operating funds, as they fund projects with long-term benefits, such as construction and renovation of buildings, overhaul of infrastructure, and similar initiatives. They are mainly financed by income from the sale of government bonds.

Some of the projects funded in this year’s capital budget include ongoing renovations at the Gant Science Complex, dredging and other improvements at Mirror Lake, several deferred maintenance projects at UConn Health, continued work on the hockey arena under construction in the athletics district, and others.

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