Adopting the tax-limitation measures would cripple Utah's system of higher education and the negative effects would spill over into the state's already struggling economy, the State Board of Regents heard Friday. (See related story on B1.)
Wm. Rolfe Kerr, Utah commissioner of higher education, reported that, depending upon which tax-rollback proposal passed in November, the state's higher education system could lose $25 million, $34 million or $52 million. The most likely figure is $34 million, he said."The only way for higher education to handle a $34 million appropriation cut would be a major reduction in the size and scope of Utah's colleges and universities. This would be a crippling blow to higher education's ability to meet the state's needs," Kerr said in a prepared statement. The regents, who met at Utah Valley Community College, voted to adopt the statement as their position on the tax-limitation effects on higher education.
The $34 million estimate assumes passage of both the People's Tax Reduction Act, which would repeal all increases passed by the 1987 Legislature on income, sales, gasoline and cigarette tax, and the People's Tax and Spending Limitation Amendments, which would limit property tax.
The property tax limitation would directly hit local school district property tax revenues. Kerr said the blows to higher education would still come, although indirectly. State analysts assume public education's cuts would be partially offset by revenues now available for higher education.
The $34 million cut would translate into a 13.1 percent cut in tax revenue and a 9.8 percent cut in total appropriations to higher education, the regents heard.
In the past 11 years, Utah's nine colleges and universities have already chosen the less painful options in trying to handle eight budget cuts, he reported.
In the most recent three budgets, higher education has absorbed $9 million in costs to accommodate 5,300 more students and $36.5 million in other cost increases. At the same time, the state appropriations have increased only $15.7 million.
Kerr said the result was reduced class offerings and core services, increased tuition, serious deficiencies in libraries and equipment and deferred maintenance.
The whopping $34 million cut makes the picture for Utah higher education even bleaker. Kerr said the overall effect would be widespread demoralization and "students would experience disruptions and delays in their progress toward graduation."
He said the additional appropriations cut would require:
-Trimming enrollment by 8,000 to 10,000 students at a time when an average of 2,000 additional students seek access to higher education annually.
-Raising tuition for enrolled students by 25 to 30 percent.
-Eliminating more instructional programs.
-Reducing research and public-service activities.
It might also be necessary to eliminate one or two schools, he said. He would not speculate about which schools or programs would be affected, saying it would be like speculating in advance on which child you would kick out of your house if your family income was drastically reduced.
"It would be quite damaging to the social fabric of higher education," he said.
The commissioner also projected that dozens of training and educational programs necessary to Utah's economy would be lost if voters backed the proposed tax limitations. "Universities would lose tens of millions of the over $150 million in research funding that now flows into Utah and multiplies 1.7 times in the state's economy," the position paper said.
The effect would be a negative message to out-of-state businesses and industries that Utah is a faltering state. "I cannot believe for a minute that the citizens of Utah would knowingly take such steps to destine the state to mediocrity," the commissioner said.
In a related matter, Kerr told the regents that higher education's long-term financial outlook is dismal even if the tax-limitation proposals fail.
"It is not business as usual. The system of higher education is not likely to remain the same, given the growth, the revenue and the demands of society," he said.
In the next six years, he reported, the revenue growth, depending on the projections, falls short of expenditure needs by $58.1 million ($9.7 million annually), $85.7 million ($14.3 million) or $113.3 million ($18.9 million).
There don't appear to be any easy answers to meet such projected shortfalls, Kerr said. Among the possible responses mentioned were tuition increases, reduction of enrollment, decreases in quality, elimination or reduction of programs.
The regents decided to expand their May meeting to two days to discuss higher education's financial future.