University System warns deep House cuts would force program, staffing changes

Catherine Provencher, chancellor of the University System of New Hampshire, told the Senate Finance Committee that the House budget’s reduction of roughly $57.6 million over the biennium would be “unsustainable” for the system and would force “massive restructuring” if enacted.

Provencher and Mike Pilati, chair of the Board of Trustees, told senators the university system already faces a structural budget gap driven by a long-term enrollment decline and changing market conditions. The university system’s current operating picture, they said, depends on state support that offsets in‑state tuition; the governor’s budget proposed a modest reduction the system could manage but the House’s adopted budget would cut state investment by about 30% from the current biennium, they said.

The university system receives roughly $95 million in state support this year, Provencher said; about $81 million of that directly subsidizes in‑state tuition (about $7,300 per resident student). Pilati said the House cut would reduce the state investment to levels the board believes would require “deep changes” to preserve quality and access.

“We cannot generate the revenue needed by raising tuition at the levels that would be required,” Provencher said, noting the system raised tuition by 19.5% and 13.5% in prior years when faced with similar cuts and that such increases are not feasible today. The trustees project enrollment declines tied to demographics and a “discounting” arms race among competing institutions; the system projects an additional 12% drop by 2030 under current trends.

Pilati and Provencher presented economic impact figures the system uses to justify state investment: about $3.7 billion in annual economic impact, tens of thousands of alumni living in New Hampshire, and roughly 3,000 recent alumni entering the New Hampshire workforce in the year referenced. Pilati said research expansion at the University of New Hampshire (now classified R1) drives business partnerships and that capital projects such as the Spalding Life Sciences Building are examples of the system’s return on state investment.

Trustees said they have already taken cost containment steps—fewer employees, early retirement incentives, centralized administrative functions, and an ERP investment to reduce duplication—but said those measures will not be sufficient under the House’s proposed reductions. They outlined a multi‑year structural plan that could include program rationalization across campuses, administrative consolidation, and targeted tuition increases to maintain a minimal operating margin; Pilati said the board manages institutions to about a 1% operating margin to protect reserves for innovation and resilience.

Senators pressed on specifics, including the projected effect on statutory programs and the share of operating expenses that relate to state funding (trustees said roughly $556 million of operating expenses are related tangentially to state dollars, after excluding dorm/room and board and grants). Provencher and Pilati asked for ongoing dialogue and recommended restoring funding to the governor’s level to preserve the system’s workforce pipeline role.

Background: trustees said the system has cut positions and centralized services and that enrollment fell from about 30,400 in 2019 to about 26,440 in the current academic year. They described a multi‑pronged plan—program clustering, shared online courses and administrative efficiencies—to align capacity with projected lower enrollments while preserving student access.