Thanks to nearly $30 million in extra, one-time funding from lawmakers, the Vermont State Colleges System is projecting it will end the year in the black. But if current conditions hold, very early predictions suggest a tough road ahead.
A pair of reports commissioned by lawmakers this summer predicted that the pandemic could cause a deficit of between $19 million and $46 million for the colleges this year. Between extra state and federal funds, the General Assembly ultimately approved an additional $28.8 million to keep the system afloat for now, and the colleges are expected to end the current fiscal year with a $2 million operating surplus.
The current reality falls squarely in the center of the outcomes projected by consultants in the summer, said Sharron Scott, the state college system’s chief financial officer.
“We’re actually really just about in the middle between the best and worst likely scenarios right here. But we didn’t arrive at it by being all best or all worst,” Scott told college trustees at a finance and facilities subcommittee meeting Thursday. “What it shows is the complexity and the uncertainty of the environment.”
Tuition and fees this year fell by about 10% system-wide, compared to what was initially budgeted. But room and board fees cratered, plummeting by about 51%. And different schools were affected differently.
The worst impact was on Vermont Technical College, where room and board fees dropped by 81% after it decided to allow only certain students to live on campus this fall under special circumstances as a safety precaution.
At Castleton University — which offered all classes in the fall online, but allowed students to live on campus — room and board revenues dropped 53%.
At Northern Vermont University — which offered students the chance to live on campus at either the Johnson or Lyndon branches, plus a mix of online and in-person classes — room and board revenues fell 30%.
As for tuition and fees, revenues dropped 6% at both Castleton and the Community College of Vermont, 12% at Vermont Tech, and by 16% at Northern Vermont University.
But without additional help, next year’s shortfall may approach the worst-case scenarios evaded this year only because of the state’s cash infusion.
“The current estimated range is between $42 million and $47 million,” Scott told trustees.
She emphasized that early estimates are extraordinarily uncertain, and based on a number of assumptions, including that tuition and fees not rise, and that pay and benefit costs go up 3.5%.
“Given the uncertainty, it’s possible that there could be a variance of up to 30% from the numbers that are shown here. If the variance is favorable to the estimates, even still, the estimated deficit would be between $30 million and $37 million,” she said.
The current estimates assume no added funding from either the state or the federal government, she said. But system leaders are in talks with both state officials and Vermont’s congressional delegation about the possibility of additional help.
Crucially, these early projections for next year also assume operations remain as-is, but multiple task forces are at work right now on a plan to overhaul the system. The colleges, which suffer from both chronic underfunding and sagging enrollment, have been on unsteady financial footing for years, and lawmakers have made clear they expected significant changes in exchange for this year’s bailout.
The Vermont State Colleges System must submit a request to the state for next year’s funding by Nov. 20, and trustees are scheduled to approve their proposal at a meeting on Nov. 16.
Budget development for the next fiscal year is already underway internally at each of the colleges. Trustees typically begin seeing drafts of a system-wide spending plan in January or February, and approve a final budget in June.
