“Study all of our options”: Lassner talks about the impending budget cuts for UH

Although looming budget cuts will pose challenges for the University of Hawaii, President David Lassner said Monday that UH is considering its options and ways to deal with the cuts.

State lawmakers reduced the UH system’s overall fund budget by $ 47.9 million in FY 2021-22 and an additional $ 42.3 million in FY 2022-23, as part of a draft budget for the biennium, currently being submitted for consideration by Governor David Ige.

The budget also reduces UH-Hilo’s operating resources by $ 2.28 million each year of the biennium.

Lassner said during a live stream on Monday that the university administrations were “surprised” when the draft budget came out of the conference in the last days of the legislative period that ended in April.

Lassner said the UH faced a budget cut of $ 15 million over two years in a proposed budget that included general state funding and federal coronavirus aid funds, but a proposed Senate budget saw an increase from the university $ 12 million before.

“So, with the conference budget that has been released in the last few days (of the session), we were honestly surprised,” he said. “The building was closed. We didn’t have the usual conversations we would normally have … but we went from cutting $ 15 million to increasing $ 12 million to cutting over $ 85 million across the system. “

Lassner said he had discussed various ways the governor could help with Ige and would speak to the UH government council and lawmakers.

“We are reviewing all of our options.”

One hopes to avoid vacations and downsizing wherever the university can, said Lassner.

“But we don’t know whether this will be possible with this reduction. So I don’t want to pretend it’s easy, ”he said. “It’s certainly not what we expected in the spring as the economy improved and we saw what we thought was pretty good news based on the budgets.”

However, Lassner said that some of the cuts could be restored in the second year of the biennium.

“The governor may have access to other types of money to help, but we are not helpless,” he said. “We also want to review all of our funding sources. We need to be accountable and responsible, use all resources we have effectively and cut costs wherever we can. “

But most of the UH budget goes into payroll, said Lassner.

“So ways to contain our labor costs have to be part of that, and some of it involves reorganization and … we want to protect our current workforce as much as possible,” he said.

Lassner’s comments came a day after the University of Hawaii Economic Research Organization released a report on the economic impact of the UH system on the state’s economy.

According to UHERO, UH-related spending totaled $ 2.31 billion in fiscal 2020, of which more than $ 2 billion was spent on the local economy.

Those spending resulted in $ 3.66 billion in local store sales, $ 1.02 billion in employee revenue, $ 186 million in state tax revenue, and created more than 22,500 jobs, according to the report.

And due to the higher estimated lifetime earnings of graduates, UHERO also predicts that the 9,345 students who graduated in 2019-20 will earn more than $ 7 billion in “life earnings” over the next four to five decades.

“The total state funds spent on the UH system totaled $ 507.6 million in FY20,” wrote economists Kimberly Burnett and Christopher Wada in the report. “That means for every dollar the state spent, UH earned an additional $ 3.07 in spending in the local economy.

“Taking the multiplier effects into account, every dollar of government funds meant $ 7.21 in company sales, $ 2.01 in income, and $ 0.37 in state tax revenue for Hawaii,” they continued. “In addition, for every $ 1 million in generic funds spent on the UH system, 44 local jobs have been created.”

“So we are a huge industry in this state …” said Lassner during the live stream. “UH is bigger than agriculture, we’re bigger than the utilities, and people don’t think of us that way.”