Outrageous Debt: The University System of NH has a serious problem

By Lawrence Warhall

This week, the New Hampshire Senate will hold begin holding budget hearings. Last week, budget legislation for state was “laid on the table” because some Republicans refused to pass a budget that increased spending by such a large amount. Part of the budget is funding for the University System of New Hampshire (USNH). The public universities came to the taxpayers with their hands out asking for a combined request of $182 million over the two-year budget period. But there’s an issue not being discussed; records show that USNH has a serious debt problem, especially when compared to an equivalent system.

As of June 30, 2016, the University System of New Hampshire’s long-term debt obligation is $737,140,000; as of the same date, the University of Maine System’s (UMES) debt is $204,480,000. USNH’s debt is 260 percent or one half a billion dollars more than UMES’s debt. The States of New Hampshire and Maine are equivalent both in population and size of their public-university systems; a difference of 10 or 20 percent in university system debt may be reasonable due to differences in State funding and other factors; but, a difference of 260 percent is outrageous.

Currently, future budget funding for USNH is being discussed by New Hampshire’s government; to date, 81 million dollars per year is proposed to be allocated to USNH over the next two years. As outrageous as USNH’s debt is, not a penny of taxpayer funds should be committed until USNH explains both the origins of this debt and how they are going to reduce it to a reasonable level.

The following presents a comparison of USNH’s to UMES’s debt for the period of 2001 through 2016:

Report Year                     UMES                                      USNH                        Percent increase

2000                            NA                                           $104,282,000

2001                            $143,858,711                           $203,458,000                           41%

2002                            $197,437,000                           $377,778,000                           91%

2003                            $178,785,000                           $367,181,000                           105%

2004                            $220,016,000                           $382,777,000                           74%

2005                            $207,896,000                           $477,701,000                           130%

2006                            $302,925,000                           $706,489,000                           133%

2007                            $345,484,000                           $694,654,000                           101%

2008                            $328,877,000                           $740,875,000                           125%

2009                            $312,093,000                           $734,665,000                           137%

2010                            $294,476,000                           $706,605,000                           140%

2011                            $276,719,000                           $682,487,000                           147%

2012                            $273,816,000                           $650,788,000                           138%

2013                            $242,641,000                           $622,387,000                           157%

2014                            $219,694,000                           $593,852,000                           170%

2015                            $217,753,000                           $709,121,000                           225%

2016                            $204,480,000                           $737,140,000                           260%

Notably, UMES steadily reduced their system debt by 40 percent from a high of $345,484,000 in 2007 to $204,480,000 in 2016. In comparison and in contrast, USNH’s debt has steadily grown from 41 percent more than UMES’s debt in 2001 to 260 percent more than UMES’s debt in 2016.

Per the U.S. Census 2015, New Hampshire has a population of 1.331 million, and Maine has a population of 1.329 million; thus, New Hampshire and Maine are equivalent in population. For Fall 2015, USNH reports an enrollment (headcount) of 28,117 students and that 55 percent of its full-time equivalent students are New Hampshire residents, in its Annual Report for 2016.

For Fall 2015, UMES reports an enrollment of 28,994 students and that 80 percent of its full-time equivalent students are Maine residents, in its Annual Report for 2016. Thus, while USNH and UMES are equivalent in headcount enrollment, USNH serves 25 percent fewer residents than the UMES, and USNH has amassed 260 percent more debt than the UMES.

Two states in the same geographical area, with equivalent populations and university system enrollments; one system serves 25 percent fewer of its state’s residents and has amassed 260 percent more debt. Outrageous.

The State of New Hampshire considers itself to be both financially conservative and responsible in its allocation of taxpayer-dollars. Currently, it is considering budgeting and allocating 81 million dollars per year for the next two years to USNH, which has amassed 260 percent more debt and serves 25 percent fewer residents than an equivalent state’s university system.

Without an explanation of both the origins of this debt and how USNH is going to reduce it to a reasonable level, any further allocation of taxpayer-dollars to USNH would be reckless, as their outrageous debt accumulation seems unstoppable.

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