ESU, PSU and FHSU make bold pitch for special $3 million bailouts
TOPEKA — The Kansas House’s budget committee delivered bipartisan condemnation Monday of unusual $3 million payouts to Emporia State University, Fort Hays State University and Pittsburg State University intended to stabilize campus operating budgets during a period of enrollment decline and rising costs.
The funding request, which had been previously rejected by Gov. Laura Kelly, was submitted by the Kansas Board of Regents’ three smaller-sized universities. Those campus leaders were emboldened by the 2023 Legislature’s decision to write ESU an extraordinary $9 million check amid a nearly 20% enrollment drop over five years. ESU had been in the spotlight for using a COVID-19-era emergency policy to jettison tenured faculty, slash core academic programs and impose a new business “model” of higher education.
Rep. Brenda Landwehr, a Wichita Republican, proposed a budget amendment during the House Appropriations Committee meeting to delete the $3 million gratuities to ESU, FHSU and PSU. Landwehr’s motion failed along with a more modest “parachute” amendment from Rep. Henry Helgerson, a Wichita Democrat. He wanted to link $1.5 million payments to the three universities to a demand that administrators outline a plan for what was to be accomplished with the cash.
“We plugged a hole with Emporia State last year,” said Landwehr, referring to the $9 million presented to ESU. “Now, we’re back because all the others are like, ‘Hey, if Emporia State can get this, then we should get something too to help right-size us or stabilize us.’ It’s a slippery slope.”
Helgerson’s blunt inquiry: “How long do we subsidize them?”
Rep. Steven Howe, the Salina Republican who chaired the House’s Higher Education Budget Committee, said the state’s six public universities were working to find a balance between academic offerings, student enrollment and workplace demands. He said the state invested heavily over the generations to create quality public universities, but those institutions needed time to hit reorganizational targets.
“I would hate to just pull out the rug, per se, and not give them the fighting chance,” Howe said. “We have good leadership amongst our institutions and I feel like they’re willing to make the difficult decisions ahead.”
The House Appropriations Committee decided to leave in place — for now — another $9 million installment of the subsidy to ESU. The committee also — for now — chose not to derail the $3 million supplemental payments to ESU, FHSU and PSU.
‘Somewhat hypocritical’
The budget committee postponed until end of the 2024 legislative session a recommendation to devote $15 million for renovation of a FHSU building to accommodate more nursing students. Questions were raised about whether student demand for Kansas nursing degrees warranted the project.
The budget blueprint for higher education, which will continue to take shape Tuesday in the appropriations committee, included $75 million in state support for the University of Kansas Medical Center’s plan to build a cancer research and treatment building. The half-billion-dollar project on the KUMC campus in Kansas City, Kansas, previously received a $100 million private donation and $43 million in federal funding.
In addition, the committee voted to delete ESU’s request for $4.6 million to pay off an “internal” university loan made in 2015 for residence hall construction. In 2018, ESU issued bonds for more housing projects. The steep decline in student enrollment and shrinking demand for on-campus housing meant the loan obligation couldn’t be repaid unless housing rates were increased to unreasonable levels.
Rep. Troy Waymaster, a Bunker Hill Republican and chairman of the House Appropriations Committee, said it didn’t make sense ESU expected state taxpayers to pay a price for the university’s mistakes in the student housing market at the same time ESU asked the Legislature to approve $10.2 million in new bonds for energy efficiency projects in campus buildings.
His ire was directed at ESU’s assumption the Legislature would let the university dump bad debt on taxpayers.
“I found it somewhat hypocritical,” Waymaster said. “If this is an internal loan, why are we paying it off with state general fund? It’s a valid question. Why are we paying it off with state general fund dollars?”
The ESU bubble
In September 2022, the Kansas Board of Regents approved ESU’s “model” for restructuring the university and delivering stability to the university’s budget. The authority was relied upon by President Ken Hush when dismissing 30 tenured or tenure-track faculty. The university gutted English, journalism, history and debate programs, but expanded from four academic schools to seven schools and invested in programs in nursing, computer science, art, music and cybersecurity.
The policy used by ESU to initiate the transformation didn’t speak to the necessity of multimillion-dollar bailouts by the Republican-controlled Legislature and the state’s Democratic governor. At conclusion of the 2023 session, however, House Speaker Dan Hawkins, R-Wichita, lauded the Legislature’s decision to earmark $9 million for ESU. He said management changes at ESU were “the way forward for all higher education institutions in our state.”
Rep. Stephen Owens, a Hesston Republican, challenged the $3 million handouts to ESU, PSU and FHSU.
“I just don’t know that it’s our responsibility to stabilize these universities,” he said. “We like to have conversations around here, but sometimes we don’t like to have the really hard conversations that exist. Nobody wants to make the hard decisions to say, ‘Well, we have X amount of universities and maybe we need one less because of declining population.’”
He said there was no motivation for government-funded entities to find the sweet spot in terms of budgeting, because the system allowed each to simply demand more from taxpayers.
Landwehr, who unsuccessfully sought deletion of the $3 million tips, said she was perplexed that the $9 million earmark last year for ESU didn’t appear to have made a difference. Originally, ESU said it would need $9 million infusions of cash in three consecutive years.
“You can’t keep cherry picking different universities on what we’re going to come in and do special things for,” Landwehrs said. “They’re not adjusting to what the market.”
Crayons, and the amused
The supplemental earmarks of $3 million, or at least half that amount, had defenders on both sides of the aisle during the House committee debate on higher education spending.
Rep. Ken Rahjas, a Republican from Agra, said regional universities had plans for working through budget challenges even if the full scope of those strategies weren’t presented to the House Higher Education Budget Committee chaired by Howe.
“Did they write it in Crayon? Did they print it out for us? There was a plan.” Rahjes said. “I trust the system. I trust the process. I trust my chairman.”
Democratic Rep. Barbara Ballard of Lawrence said larger universities, such as Kansas State University or University of Kansas, had substantial budgets and more wiggle room to reimagine themselves when money got tight. Ballard, currently the longest-serving House member, said she recalled a time when the Legislature provided nearly half of state university budgets, but that measure had fallen to about one-fourth.
“I don’t know what the answer is, but whenever we don’t like something or we can’t understand it, we just pull the funding,” Ballard said.
Rep. Bill Sutton, R-Gardner, said he found it somewhat amusing House legislators were castigating universities for not preparing for difficulties consistent with the anticipated decline in the college-age population.
He asked peers on the House committee whether the Legislature prepared for disruption of COVID-19, which he referred to as a flu, by setting aside significant cash reserves.
“We did not and we gladly accepted … $34 billion from the federal government to bail us out because we didn’t have a rainy-day fund,” Sutton said.
Kansas Reflector is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Kansas Reflector maintains editorial independence. Contact Editor Sherman Smith for questions: info@kansasreflector.com. Follow Kansas Reflector on Facebook and Twitter.
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