UConn reports favorable midyear revenues but projects $84M shortfall in governor's biennial budget proposal

Jeff Gagan, EVP and chief financial officer, told trustees that both the university and UConn Health are favorable to the board-approved FY25 budget through the first six months and that some of that positive variance is expected to hold to year end.

What drove FY25 results: Gagan said tuition, fees and auxiliary revenues are higher than budgeted — citing nearly $41.3 million in six-month revenue that he said projects to about $76.6 million through year end — and federal research spending is higher than expected in the university accounts. He warned, however, that federal policy changes remain a risk to research-funded revenue and that the vice president for research is monitoring grant impacts closely.

UConn Health: Gagan said UConn Health also finished the first six months favorable to budget (about $6 million favorable) driven by higher net patient revenue and pharmacy activity. Trustees and hospital leaders discussed the recently approved 23 additional hospital beds; leaders said adding beds will reduce diversion, increase throughput and is expected to be financially positive overall because it shifts patients back to UConn Health instead of other hospitals.

Biennium outlook: On the state budget for fiscal 2026–27, Gagan explained that the administration requested a roll-forward of FY25 support plus increases to cover wage and cost changes. The governor’s proposed budget removes one-time funds and provides a smaller block-grant increase; Gagan said the difference between the university’s request and the governor’s proposal produces a shortfall of roughly $84.1 million in FY26 (and about $82.5 million in FY27) that the university will address during the legislative process.

Other points: Trustees discussed payer mix; leaders said roughly a quarter of UConn Health patients are on Medicaid and that specialty care at UConn Health draws Medicaid patients statewide. Legal and contracting staff are pursuing remediation and potential recovery related to recent humidity/HVAC issues at the Wirth building; general counsel is working with outside counsel to assess claims against the design-build team.

Why it matters: The midyear positive results give the university some near-term breathing room, but the governor’s proposed biennial budget would leave a sizable funding gap. That gap, together with wage negotiations and potential federal changes to federal grants and student aid, will frame discussions for the next legislative months.

Ending: Trustees were urged to follow the appropriations process closely; leadership said teams will continue to meet with legislators and update the board as the budget and negotiations progress.