The University of Alaska has taken steps to reduce administrative and operating costs, freeing up funds for investment in high priority programs and services to better meet the future needs of Alaska and its students. The university continues to mitigate state funding decreases by increasing alternative revenue sources.
UA Needs a Stable Budget
UA needs stable state funding. The budget reductions have put extreme pressure on the university. Coupled with the hard hit from COVID-related expenses and lost tuition revenue from declining enrollment, the university needs time to adjust. Predictable budgets from the state will allow UA to regain its stability, work to grow enrollment, maintain research excellence, and increase external partnerships and private giving.
Managing in a smaller footprint
The FY23 budget demonstrates that the university system is turning the corner on financial stability in requesting a modest operating increase, after seven of the last eight years have included state budget reductions. UA has received successive budget cuts exceeding $100 million since 2014 — 30 percent of its unrestricted general fund budget. The COVID pandemic magnified the impact of the state reductions.
The UA system is smaller, but maintains a solid core foundation and high-quality programs on which the state and industries can depend on to educate Alaskans for jobs in Alaska that lead to the diversification and growth of the economy.
UA’s Physical Assets Need Care and Attention
The FY23 capital funding request includes $50 million for critical deferred maintenance, and $20 million for the modernization of student IT systems originally designed in the 1990s. This one-time investment would allow UA to transition to a cloud-based, modern student information system to remain competitive in the marketplace. UA’s deferred maintenance backlog, valued at $1.4 billion in FY21, is increasing annually. Aging facilities and functional obsolescence detract from student recruitment and retention. Capital funding is a top priority and critical need.
Strategic investments in Alaska’s economy
UA is also looking to partner with state agencies on key economic recovery investments in health, critical minerals, oil and gas recovery, unmanned aerial vehicles, mariculture, and alternative energy -- areas in which the university system has a deep base of expertise and the state has identified as priorities. UA requested state discretionary funding available through federal economic recovery funds for these efforts. $50 million/year to cover our maintenance backlog. During that time period, we received only $18 million. In FY21 and FY17 we received zero funding in the capital budget.