Colleges and universities stand to reap the benefits of tens of billions of dollars in federal funding under the American Recovery and Reinvestment Act of 2009. The legislation will impact everything from student aid and research funding to technology investments and projects planning. Two experts, Kevin Hegarty, vice president and chief financial officer at University of Texas, Austin, and Lander Medlin, executive vice president of APPA, provide valuable insight about the stimulus package in this edited digest of our web seminar.
On behalf of my colleagues at GovConnection, I’d like to thank you for your continued interest in our series on the federal stimulus package and its impact on higher education.
We understand that colleges and universities face unprecedented fiscal challenges. For instance, with technology playing such a key role in every aspect of higher education, the need to maintain and improve your school’s technology infrastructure is more important than ever. Yet budgets are being constrained across the board. Well, we believe there is a solution?and it revolves around planning as much as it does pricing.
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Vice President and Chief Financial Officer
University of Texas, Austin
I suspect that every InstItution, whether public or private, is addressing some sort of budget challenge. Seeking monies available under the american recovery and reinvestment act of 2009 is one strategy that might be deployed by your campus. your focus in figuring out how to put the federal stimulus monies to work for you should be on the federal grants award process and/or the allocation process employed by your state. understand that in nearly every case, the federal government intended for the stimulus monies to be spent for capital spending and infrastructure, not for paying the operating cost of your institution. But remember, there are capital expenditures that you can make today that have an ongoing recurring benefit for your campus that can effectively reduce your recurring expenses.
A substantial amount of the stimulus monies have come through the federal grant award process. research universities will have a natural advantage in winning these monies because they have existing processes for writing grants. If you are not a research institution, my advice would be to partner with a research institution and attempt to win a share via collaborative grants as a subcontractor to the principal grantee.
At UT Austin, we have been successful in winning several million dollars of grants to purchase specialized equipment for our research labs. the companion effect has been a noticeable increase in our ability to attract some of the best graduate students from across the world. those graduate students teach thousands of credit hours, thus reducing the cost per hour taught.
Remember that the stimulus monies are not recurring. If you find your institution having to deal with what you believe may be a temporary deficit, the federal stimulus monies might be used to fund capital asset acquisitions that would otherwise have been funded from your recurring operating budget, if debt- or lease-financed. For example, some institutions might solve such a deficit by simply not replacing computers in their normal cycle. recognize however, that some federal stimulus monies might, in fact, be used for these acquisitions, providing the same relief to your operating budget, but having the companion effect of maintaining your computer refresh strategy.
So, how you put the stimulus monies to work on your campus depends, in large part, on your view of whether you are dealing with a temporary or a chronic deficit. the stimulus monies can be useful in either scenario, but you should be careful to understand the nature of the deficit that you’re trying to address.
You should consider ARRA as a partnership for economic renewal. speaking to colleges and universities about a stimulus package that hasn’t seemed to materialize is risky, but given today’s financial climate, it’s even risky to do nothing, so it’s very important that we think about the mantra: apply, apply, apply; no matter what. economically, the program is geared specifically for job generation. education has been tapped as the driver of economic development, growth and prosperity. Frankly, this is an historic bargain where expectations are very high and it will require our best collaborative efforts to get there.
Let me emphasize that the spending is targeted. For example, if you are at a community college, there is definitely new construction going on because the enrollments are huge. Also, spending on energy and the environment is up. And there is spending in classroom technology and A/V equipment. other targeted areas include facilities infrastructure and modernization and safety and security. Federal research is another huge area.
One of the guiding principles of the stimulus bill is that the money is supposed to be spent quickly to save and create jobs. We’re still not sure that it’s being disbursed as quickly as we would like it to, however that was one of the guiding principles. there are some rules. You cannot fund what we call the Jacuzzi U, meaning recreation facilities. it really has to be around instruction and research, and even student housing is included. some of the states have actually taken all of their allocations and given it to public safety, which was what California did.
Workforce reinvestment is one area that I think has missed the radar screen for many of us. if I am at a community college, i am definitely going to take advantage of the workforce investment job training. Go to the department of labor, look under etA, which is the employment and training Administration, and you will find grants that are available for worker preparation.
So, where do you apply? You can go to recovery.gov. Check out the department of labor’s employment and training Administration, your state’s energy office, your governor’s office. have you approached your local municipality to partner on a doe block grant for alternative fueled vehicles? have you approached your institution’s scientific researchers to submit a competitive grant in the areas of biomedical research, equipment and instrumentation, or any other research facility modernizations?
We have to think more like a business, more like entrepreneurs than ever before. We’ve got to learn to collaborate better, seek a seat at the table and really take a leadership role, and not just maintain the status quo. this is going to require real change and real leadership. Molly corbett Broad, of the American council on education said, “it will be tough, but remember, tough times don’t last, but tough institutions do.”