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University finance report: revenues up, hazard-pay debate exposes tuition-fund trade-offs
Summary
University finance officers reported higher year‑to‑date revenues through Dec. 31 but noted timing issues and emerging federal risks; Regents pressed administration about $43.7 million in temporary hazard-pay payments and how $4.6 million of that came from the Tuition and Fee Special Fund.
University finance officials told the Institutional Success Committee that through Dec. 31 of fiscal year 2025 the system is in a generally strong fiscal position, but the report flagged timing quirks, a $43.7 million total temporary hazard-pay obligation for the fiscal year and new federal-policy risks that could affect grant funding.
VP Young presented the second-quarter financial update and said total revenues for the first six months were about $1.1 billion, roughly $218 million higher than the comparable period the prior year; the staff explained much of the variance stems from timing differences between quarters. Young said expenditures are also higher, principally from variable costs such as utilities and scheduled labor increases. "Overall, through December of 2024, the numbers look pretty good overall," Young said.
A large focus of the discussion was the temporary hazard-pay settlement tied to the COVID period. Young reported total temporary hazard-pay for the fiscal year is about $43,700,000; of that, roughly $30.1 million was provided from general funds under a legislative appropriation and an executive memorandum, while $13.6 million comes from non‑general funds. Committee members asked how much of the non‑general funds portion was charged to the Tuition and Fee Special Fund; Young replied that roughly $4,600,000 of the $43.7 million came from the Tuition and Fee Special Fund.
Regents pressed the administration on what the Tuition and Fee Special Fund balance is and whether the board could deploy those reserves for student supports. Young said the board receives an unaudited balance at fiscal-year end and that the Tuition and Fee Special Fund is "the second most flexible" fund after general funds and may be used for operations as determined by the board; Young added the balance is a point-in-time figure and varies daily because of tuition prepayments.
Regent Abercrombie repeatedly pressed the point that the hazard-pay settlement for HGEA employees was paid in part from special funds that students ultimately fund through tuition receipts, arguing students were not consulted and urging examination of whether tuition reserves could instead be used to expand Promise-type programs or direct student assistance. Other Regents cautioned the committee to separate questions about union settlements from policy decisions about fund use and requested an itemized breakdown of Tuition and Fee Special Fund balances and authorized uses.
Young warned of new federal risks: she said rapid developments at the federal level regarding grants and programs could suspend or reduce funding and that the next quarterly update, running through March 31, would show early signs of those risks. The committee requested further information about the Tuition and Fee Special Fund's composition and donor-restricted items, and Young agreed to provide additional detail in follow-up materials.
No formal votes were taken; the discussion concluded with a request for more detailed reporting on Tuition and Fee Special Fund balances, reserve policy, and donor-restricted categories.
