The Florida Legislature currently owes the State University System (SUS) close to $500M in unpaid funds for the matching gift program. Now, the Senate is asking public universities to start spending their reserve money in exchange for more IOUs.Florida senators tore into the SUS with a nonrecurring general revenue cut of $373M. A press release from the Senate says that the money “will be restored in 2013-14.” Until then, the senators expect public universities to “use a portion of their $859 million fund balance to maintain full operations.”
Universities are required by law to maintain a five percent fund balance.
The SUS is still waiting on the legislature to repay the nearly half billion dollars it owes to the University Major Gifts Program. Last year, lawmakers suspended the program effective July 1, 2011. The law that implemented the freeze says the program might be restarted after legislators find $200M for the current backlog of unmatched private gifts to the SUS.
The state of the matching gift program shows that Florida’s public universities cannot afford make long-term commitments based upon more IOUs from the legislature.
SUS institutions are also faced with another problem. Their reserves are not as flexible as the Florida Senate seems to think. Many currently use excess reserve money for a variety of temporary expenses such as summer school operations or faculty research. Florida Atlantic University, for example, has already committed $50M of its $66M reserve for the 2012-2013 fiscal year. That is not enough to absorb the $23.1M to $27.2M cut it might face next year.
FAMU President James H. Ammons recently told the Faculty Senate that the university has about $40M in reserve funds. He did not comment about how much of FAMU’s reserve money is already committed for the 2012-2013 fiscal year.
Reserve money will not carry the SUS through 12 months. The SUS needs lawmakers to put away the knife and find new streams of tax revenue.