University asked for early government funding
Halifax universities aren’t the only ones in trouble. Acadia University in Wolfville found itself in a predicament similar to NSCAD University earlier this year.
Both schools asked for and received the 2011/12 operating grants from the provincial government almost a year early, meaning they were unable to pay all their expenses with just one year’s budget. The Department of Labour and Advanced Education says the government made the early payments at the request of the two schools, citing unspecified cash flow issues.
But the two schools did not make those requests together, says Acadia’s director of communications Scott Roberts.
Acadia asked for early funding due to changes in the way universities are funded—changes that Acadia’s payment schedule did not accommodate, says Roberts.
Nova Scotia’s university funding has been irregular for two years. In the 2009/10 budget, a one-time payment of two rounds of funding was made to universities. In his most recent budget address, Premier Darrell Dexter said this left the government “with one payment to make in two years, and 2010/11 was the year in which no payment was made.”
In the 2010/11 fiscal year the province provided less than a quarter of the operating grants to all 11 universities than had been given in earlier year: $93.6 million, down from $450 million the year before and $485 million in 2008/09.
Of the $93.6 million distributed, 30 per cent was directed to Acadia and 14 per cent to NSCAD. The government found an additional $32.9 million for the 2010/11 budget to accommodate the universities’ request.
The government has budgeted $384 million in grants for 2011/12, but doesn’t intend to provide either Acadia or NSCAD with an operating grant.
Universities are looking to find new sources of revenue. The provincial government reduced general operating grants by four per cent this year; and revenue from tuition fees and ancillary fees remains frozen under the Memorandum of Understanding signed in 2008.
Combined, these three sources of revenue–funding, tuition fees and ancillary fees accounted for 62 per cent of Dalhousie’s net revenue in 2010, and 83 per cent of Acadia’s. Additionally, expenses are hard to decrease; universities are “by their very nature high fixed-cost entities,” says Roberts.
In their January 2011 newsletter, the president of the Acadia University Faculty Association said the “sorry state” of Acadia’s finances was the result of the university’s debt payments, which “eat up a significant portion” of the university’s revenue.
Although Acadia invested heavily in “residence modernization and other capital projects” in the early 2000s, it would “not be correct to characterize this as a reason for our arrangement earlier this year,” says Roberts.
“We have, since 2000, made considerable changes in our debt structure.” He says this is just one of the ways Acadia has “been able to manage some costs downward.” However, other costs, such as energy, “have increased at a rate much faster than inflation.”
The O’Neill Report, commissioned by the province in 2010, says “finding ways to sustain so many degree-granting institutions in a province with fewer than a million people
has long been a challenge.”
Roberts says Acadia continues to look toward New England, where it has drawn students “for all of our 173 years,” and has “well-established relationships with guidance counsellors and alumni.”
Kevin Finch, with the Department of Labour and Advanced Education says the “government stands by the commitment to provide universities one funding payment in a single year. The circumstances that lead to the advanced payment of the Acadia and NSCAD operating grants do not change this.”
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