UH Facing Fiscal Crossroads With Expected $100M Revenue Shortfall

Aug 28, 2020

Higher education is just one of the state functions about to be hit by budget shortfalls. The University of Hawai‘i Board of Regents is raising alarms about a nearly $100 million expected loss in revenue, possibly starting this November.  One critical piece of information is still needed for detailed planning. 

UH Board of Regents Chair Ben Kudo says the magnitude and urgency of this pandemic prompted the regents to call for a plan of action.


"The worst thing you can do in a crisis like this is not be proactive and plan, and make decisions.," says Kudo. "You can always adjust in the future, but if you sit hoping, then your options get reduced when it's time to make a decision, and we don't want that to be the situation."


Benjamin Kudo is a lawyer with Ashford and Wriston, LLP. A UH alumnus, he was re-elected in July 2020 for his second term as chair of the UH Board of Regents. His term expires in 2022.
Credit Ben Kudo

  The regents have asked the UH administration for both a two-year and 10-year plan going forward.  


"And we know that because of the measures we potentially might be taking, the vision of what our university will be 10 years from now is going to be different than what it is today."


Kudo says more federal aid is under discussion in Washington, but it may not be coming soon.


"We have reserves we can dig into that would cover us depending on our burn rate per month, which varies depending on how we can reduce our expenditures -- that would last us about a year or less.  Once those reserves are gone, we have nothing left. So we are keeping reserves to be used strategically for those types of expenditures we need absolutely."  


Planning for this crisis follows a major humanities reorganization at UH Manoa.


The new College of Arts, Languages and Letters, or CALL, combines 17 departments, and around 300 permanent faculty. It's the largest college at Manoa with 3,200 students enrolled in arts, languages, literature, and Pacific and Asian studies.


On word of the regents' request for a budget cutting plan, more than 800 people signed a petition calling for deliberation and transparency.


"We didn't think the resolution was necessary because a lot of what they're stating is already in place," says Christian Fern, executive director of the UH Professional Assembly, UHPA, which represents faculty members. 


"They've been talking about retirement incentives, I think they're considering possibly what a furlough would look like. The difficult thing is to know exactly what dollar amount is there. Then I think we can start looking at specific proposals to come up with that dollar amount." 


UHPA's contract negotiations, as with other public unions, take place directly with the governor's office.  Fern says they have not met since April.


The university administration's plan, based on UH figures, is expected in November or December.


"The sooner the better, because that $100 million gap is coming on us in November this year," Kudo said. "Every month that goes by that we don't implement the cost-cutting measures, means that savings is reduced. That means your bogey, or the target, now becomes $110 million. If your burn rate is $50 million a month, one month of not implementing something is very significant. We need to move with all due speed, because it is urgent." 


About 10,000 people work inside the UH system on 10 campuses across the islands.