Smaller, tighter budgets could be a future challenge for University of Northern Colorado

A preliminary look at the fiscal near future of the University of Northern Colorado shows the Greeley school could be in for tighter budgets in the coming years.

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Bridging the gap between the upcoming fiscal year of 2025-26 and the opening of the proposed college of osteopathic medicine, when additional revenue is expected, will be key for the university later this decade, Chief Financial Officer Dale Pratt said last week.

“We’re not looking at the college of medicine as the ultimate savior for the institution,” said Pratt, who’s also the vice president for finance and administration. “But it will give us some degree of flexibility and additional ways to respond to the fiscal needs.”

Pratt and UNC President Andy Feinstein were among university leaders to meet with the board of trustees’ six-member finance and audit committee Thursday afternoon. The university is in the early stages of its budget process for the upcoming fiscal year. Fiscal years run from July 1-June 30 annually.

The lengthy meeting was held a day before the full nine-person board of trustees convened for its regular meeting. The university is celebrating fall commencement ceremonies this weekend on campus.

UNC is facing a few years of stable but not significant increases in student enrollment, along with the likelihood of no additional increase in state funding, Pratt said.

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Gov. Jared Polis’ 2025-26 budget proposes a $12.1 million increase for colleges and universities and for student financial aid. Representatives of higher education institutions have asked the Joint Budget Committee for an $80.2 million increase.

Polis’ budget also proposes a 2.3% increase for in-state tuition.

At UNC, student tuition, fees and money from housing and dining services are primary sources of revenue for the university. State funding is a secondary source.

An assumption made with the FY26 outlook during Thursday’s meeting indicates a possible 4% increase in state funding for UNC. Polis proposes a 1% increase in his FY26 budget, UNC said.

In addition to lower revenue surrounding student enrollment and state contribution, there are expenses for the university to consider in drafting a cautious approach to finances in the coming years. Add in expense increases for maintenance, the effects of inflation and the costs of health care, personnel and capital projects, and the university will have to figure how to best manage its funds with limitations.

The university is looking at about $4.4 million less in operating cash for FY26.

“None of them are easy fixes, and none of them will solve the problem on a sustainable basis,” Pratt said. “But if we use them all in combination to the degree that we can do that without doing significant, harm right to the overall success of our institution, which we would never do, then we’ll be fine.”

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Pratt said more information on the budget outlook will be available in the coming months, giving UNC, other institutions of higher education and state-funded entities clearer vision on their economic picture.

The UNC Board of Trustees will receive a preliminary budget in May and vote on the budget in June.

The FY26 budget could include tuition and fee-rate increases for undergraduate and graduates to balance out the limitations on incoming funding. This move could be considered along with deeper cuts in places such as university travel, hiring and personnel expenses.

An assumption made in a forecast and outlook document Pratt navigated for the board Thursday indicated the undergraduate increase could be 2.7% with a 3% increase for graduate students.

“There’s a point at which students don’t want to pay the increased tuition,” Pratt said. “If we push too far, it’s not a successful strategy.”

The FY 26 outlook also assumed:

• A 4.5% increase in room and board rates
• A 1% increase in undergraduate enrollment
• A 4.5% increase in room & board rates
• Personnel expense increases totaling $5.4 million, an estimate including fringe benefits
• A 2.7% increase in non-personnel expenses.

Originally Published: December 13, 2024 at 6:00 PM MST