Date: January 22, 2008
CONTACT: Jeffrey Gordon


Higher Education Initiatives to Help State Compete in the Innovation Economy

Governor Spitzer’s Executive Budget proposed a historic investment in higher education to help the State compete in the Innovation Economy.  His Executive Budget proposed the creation of a $4 billion Higher Education Endowment to fund improvements in New York’s colleges and universities, and an ambitious $9.3 billion, five-year Capital Plan for institutions in the State University of New York (SUNY) and the City University of New York (CUNY) systems.
“Excellence in higher education is the key to a better future for our State,” said Governor Spitzer. “If we want to create jobs statewide, and revitalize the Upstate region, we must ensure that our system of higher education is second-to-none.” 

In the Executive Budget, Governor Spitzer proposed creating an endowment that will serve as a permanent funding source for critical investments in New York’s colleges and universities. To finance this effort, the Governor has proposed unlocking some of the value of the New York State Lottery by partnering with a private investor.  The endowment would provide over $200 million in additional higher education operating aid every year, and investment returns and the endowment will increase substantially over time.

As possible approaches for funding the endowment are studied, the Governor will be guided by three core principles:  (1) Lottery proceeds must continue to provide increasing revenue for K-12 education; (2) all existing regulation of the Lottery must be maintained; and (3) the State will not increase Lottery revenue by exploiting or exacerbating gambling problems.  The Governor has also made it clear that the jobs of current Lottery employees must be protected. 

This new funding source will be critical to help the State finance several of the recommendations of the Commission on Higher Education, which the Governor convened last year. These include: hiring 2,000 new full-time faculty members for SUNY and CUNY – including 250 eminent scholars – within five years; and establishing an Innovation Fund for new research that will help create the technology of tomorrow and attract business growth.

The Executive Budget also initiates the first year of a historic five-year, $9.3 billion capital plan to rebuild the infrastructure of SUNY and CUNY institutions.  These capital funds will support critical maintenance, strategic initiative projects, hospitals and residence halls, and community colleges, as well as a pilot “Greening of SUNY” initiative to provide campuses with the ability to finance energy conservation projects that will yield long-term operational savings.   The Budget establishes a University Capital Projects Review Board to consider and approve $2.56 billion of investments in strategic initiatives submitted by the SUNY and CUNY Boards of Trustees.

Additional financial aid for higher education is also made available for veterans returning from combat. These individuals will be eligible for grants up to the value of SUNY in-state undergraduate tuition, which can be used at any public or private college, university or approved vocational program in New York.

Governor Spitzer is not recommending any increase in tuition for SUNY or CUNY in his Executive Budget. It is also anticipated that during the fiscal year, the state will cover an extra $200 million in salary increases and other benefits supported by Governor Spitzer during collective bargaining with SUNY and CUNY faculty and employees. These significant new resources will be added to SUNY and CUNY budgets following legislative action.

In order to deal with the difficult fiscal environment facing the State because of the subprime mortgage crisis and slowing national economy, however, the Executive Budget contains several savings initiatives in the area of higher education.

Budget Savings Initiatives Include:

Operating Efficiency: General Fund spending for SUNY and CUNY is reduced by 2.5 percent below the amount their 2008-09 budgets otherwise would have grown ($34.2 million for SUNY and $16.7 million for CUNY); this is similar to reductions in anticipated budget growth imposed on State agencies.  The university systems will manage this reduction in a manner that is responsive to student needs and system priorities. Consistent with recommendations of the Commission on Higher Education, legislation accompanying the budget will enhance the universities’ existing flexibility in procurement and construction to help facilitate cost savings efforts. 

Bundy Aid Reductions:  The Budget reduces State Aid to Independent Colleges and Universities (Bundy Aid) from $46.2 million to $41 million, applying the same 2.5% reduction that is required from SUNY and CUNY.

Reduced Base Aid for Community Colleges:  The Budget reduces student base operating aid for SUNY and CUNY community colleges by $50 per student, but still provides total State operating aid of $451.1 million for SUNY community colleges and $174.5 million for CUNY community colleges.