Chancellor Lisonbee Perdue told the House Appropriations Subcommittee on Higher Education on Nov. 8 that the University System of Georgia (USG) is projecting record enrollment this fall and a stronger-than-expected retention and graduation rate, even as the system faces a persistent maintenance-and-operations (M&O) funding shortfall.

Perdue said the systemxpects continued flattening of enrollment rather than a steep demographic "cliff," and pointed to internal projections showing the system meeting or exceeding prior forecasts. "We have record enrollment again this next this fall," Perdue said during his presentation.

The immediate budgetary pressure, Perdue told the committee, is a gap between the statutory M&O formula and actual spending. "The formula calls for $8.28 per square foot," Perdue said, but recent spending averages about "$16.37 per square foot." He urged the committee to consider reexamining the formula to reflect rising energy, labor and materials costs and to make data-driven adjustments.

Why it matters: M&O funding affects campus heating, cooling, custodial services and routine repairs. Perdue and members cautioned that a static per-square-foot rate treats older buildings the same as new construction and does not reflect modern analytics that can differentiate costs by age, usage and building type.

Perdue also summarized a long-term capital strategy that emphasizes renovation and rehabilitation over new square-footage growth. He walked the committee through slides showing a shift from new construction (2004orward) to a heavier focus on refurbishment in recent planning cycles. He said the Board of Regents and the Technical College Board vet requests before the executive branch proposes them to ensure project readiness.

On project cost control, Perdue said the system has tightened design-to-budget expectations and brought architects and contractors into earlier phases to avoid repeated scope increases. "Only 5.1% of the 58 state-funded projects required budget adjustments," he said, crediting stronger vetting and value engineering for reducing historic overruns.

Committee members raised questions about whether the M&O shortfall has been covered by internal efficiencies or reallocated funds. Perdue said colleges have used internal funds and efficiency measures, and he highlighted recent affordability measures that reduced net student costs in some cases.

Members also asked about administrative staffing and space utilization. Perdue said the system tracks space use and asked institutions to justify new space with program-level demand, and pointed to recent consolidations as examples (he described transferring East Georgia College oversight to Georgia Southern to reduce duplication and improve local service).

On workforce alignment and degree ROI, Perdue said USG is working with the private sector and data firms to provide more transparent return-on-investment information to students and families, and referenced Georgia Degrees Pay and partnerships to expand short-term credentialing.

What to watch next: Perdue noted some federal research funding risks tied to possible federal funding disruptions; he said some federally funded programs could experience interruptions if a shutdown continues. He also encouraged the committee to consider targeted adjustments to the M&O formula using modern data analytics rather than a simple across-the-board increase.

Ending: Perdue closed by urging the committee to review the system ata and renovation-first approach, and members thanked him and his staff for the packet of materials provided for follow-up questions.