Face the Facts: How CSCU plans to address a $140 million deficit

Connecticut's community college system seems to be on life support lately. That's despite consolidating some services in recent years to save money, and also trying to create incentives to entice more students to attend.

Leaders in the system are continuing to struggle to fill a $140 million budget gap. So how did we get here? And what's next?

NBC Connecticut's Mike Hydeck spoke with Connecticut State Colleges and Universities Chancellor Terrence Cheng.

Mike Hydeck: First and foremost, this week you announced retirement packages are going to be available for some longtime teachers and other staff. How much can that, depending on how many accept it, affect the bottom line?

Terrence Cheng: If all of our collective bargaining units were to partake in this program, on the low end, we anticipate that we could save approximately $10 million a year. On the higher end, we could save potentially $20 million or more per year.

Mike Hydeck: So if they all took advantage, that's 20. So that's still not quite the 140 you're trying to make up. But that's a start, is your point.

Terrence Cheng: That's correct.

Mike Hydeck: So there was an article in the Connecticut Mirror talking about look, this is a short-term fix. Keith Phaneuf, the budget guy there, says this is gonna end up hurting the deficit, or the unpaid liabilities that we have in Connecticut in the long run. Is that a concern or you really just have to take care of the budget right now?

Terrence Cheng: Well, we have to work with the budget that we've been given. And where we are right now, we have $140 million projected deficit for fiscal year '25. And we've been working incredibly hard to try to close that budget gap. There have been massive reductions already. Obviously, there's been a very painful tuition increase that we had to vote on. But ultimately, we're trying to do best with the budget that we've been given. And we need to pull all the levers at our disposal.

Mike Hydeck: So let's talk a little bit about the tuition increase. That was, you know, an emotional issue for everybody, the board, the students, the teachers, the unions, they all came forward to say, 'look, we can't have this on our backs.' When you have, and do you calculate this, when you have a tuition increase, do you calculate the fact that if you raise the tuition, fewer students will come in, and then overall, the balance sheet's just gonna be lower anyway. Do you have to do a a risk versus reward scenario there?

Terrence Cheng: Sure. Well, first, let me say this, okay. As a system that serves over 80,000 students here in the state of Connecticut, our students come from Connecticut, they're educated and trained in Connecticut, they stay to live and work in Connecticut. They are the lifeblood, they are the workforce, and they are the folks that oftentimes cannot afford to go to the state flagship or to a private university. So we are incredibly sensitive to tuition. We want to keep it as low as possible. No one wants to increase tuition, not administrators, not board members. So of course, we are always doing that calculus, that calibration. If we increase tuition, what is the potential impact on our students. We don't want an extra nickel or an extra dime going on them if we can help it. But we're really in a position right now where if we don't take that into consideration, the possibility of what kind of revenue we could generate, without really damaging the spirit and the potential for our students then, you know, we need to always take that into consideration.

Mike Hydeck: One of the things in recent years, and I know this didn't feel incredibly good. But the governor says, 'Look, our university system needs to live within their means.' And they he didn't think everybody was until recently. How do you feel about that? Are there ways to cut around the edges other than tuition? Or do you think, you know, some critics say, 'Look, we changed to this consolidation system, but we just added more mid-level managers.'

Terrence Cheng: Yeah, we can't cut our way to success. I'll put it that way. When you invest in the state system, you're investing in the state. You're investing in the workforce; the teachers, the nurses, the medical assistants, all the people in your offices, those are the people that you're investing in. Of course, as an organization it's incumbent upon us to constantly evolve. We have to look at how we do our business; we have to look at emerging technologies. We're always looking at ways to improve and become more efficient. But the way things are calculated right now, we are actually suffering a large portion of our deficit because of things that are outside of our control, in terms of how the state calculates fringe, that is a big hit on our budget. So we're doing the best that we can. We do not begrudge the work of the state leadership. It's hard to put together a state budget and all of the causes are worthy. But we believe that ours is absolutely up there when it comes to making the state strong.

Mike Hydeck: For people who don't know, define fringe. What's fringe?

Terrence Cheng: Fringe is your healthcare benefits and you know, your retirement benefits.

Mike Hydeck: So how they help fund that. And so that's a big nut for any program to try to do that. What people hear and have heard, 'Hey, it's free community college for everybody.' What does that do to the impact of your budget? Are people looking at that wrong? Because it was sold as anybody could go to you know, you heard the commercials, anybody can go to community college for free. Well, that can't help the budget, for people who don't know who it actually works.

Terrence Cheng: Actually, the PACT program, that is the free community college program for our state, it is a wonderful program. And it is actually an example of when powerful, thoughtful, intentional state investment helps Connecticut's residents go to the next level with a degree and really advance in their careers. So we're very thankful to the governor and to the legislature for creating the PACT program and for continuing to fund that because without the PACT program, our community college enrollments would be in even more dire conditions.

Mike Hydeck: So that doesn't affect your bottom line? That's taken care of by the state? Or it does affect the bottom line?

Terrence Cheng: The PACT program is funded by the state and it is an absolutely instrumental part.

Mike Hydeck: So last question. We have by some estimates 80,000 open jobs. EB needs welders. We need childcare providers. Pick the industry. Are we training our students and population ready to go to those jobs? Because it seems if we tapped into that, more students would be flooding towards community colleges. Is there a disconnect there? Or how do you feel about how we're training our students to be welders, to be childcare providers, to be nurses?

Terrence Cheng: We have some of the best programs out there for the state. They are affordable, they're high quality, they are directly connected to workforce. And that's why I say investing in us is investing in the workforce. And I think the disconnect that we're experiencing right now is that our funding is not sufficient to continue to drive the workforce development that our state really needs. That is something we want to do, but we really need the help and the resources to continue to do it at the level.