LITTLE ROCK — Four of the state’s 10 public universities funded more than 20 percent of their athletic programs with state revenue and student tuition in the 2009-2010 academic year, according to a report compiled by the Department of Higher Education.
Athletic spending at the state’s two-year colleges and four-year universities grew 11 percent from the previous year to $116,793,347 and exceeded budget projections by 12.5 percent, the report also showed.
The Higher Education Coordinating Board will review the report at a regularly scheduled meeting Friday in Jonesboro before sending it to the Legislative Joint Auditing Committee as required by state law.
Sen. Jimmy Jeffress, D-Crossett, chairman of the Senate Education Committee, said the report is “closely watched,” particularly in tight budget years.
“Athletics serve an important role,” he said. “But when it gets to the point where fees and tuition become a primary method of keeping them running, you have to question that.”
Jeffress stopped short of questioning the funding practices of individual universities, noting that each institution “has varying circumstances.”
The report comes at a time when colleges and universities are facing financial difficulty as states tighten budgets in the wake of drops in revenue, forcing athletic program cuts in some areas. The University of California at Berkeley recently announced plans to cut baseball, lacrosse and gymnastics at the end of the 2010-2011 school year.
Arkansas colleges and universities, currently under a salary freeze for most employees, made two unexpected budget cuts in the middle of the 2010 fiscal year, which ended June 30.
Leaders of colleges that pull a majority of their athletics funding from tuition, fees and state appropriations say the programs help support the overall mission of their institutions, justifying the cost.
“There is a lot of benefit to a university to having an athletic program that makes sense to your institution, and one that you can afford,” said David F. Rankin, president of Southern Arkansas University at Magnolia.
The Magnolia school derived 40 percent of its athletic budget from tuition and state support, a higher portion than any other four-year university.
FUNDING LIMITS
The publicly funded portion of a university budget, known as its Education and General Fund, is made up of state funding, tuition and certain student fees. It is intended largely for instructional and operational purposes, such as faculty salaries and building maintenance.
Arkansas Code Annotated 6-62-801 directs the Higher Education Coordinating Board to limit the amount of Education and General Fund money directed to athletics budgets, adjusting the limit to allow for inflation.
Five of Arkansas’ four year universities spent the maximum of $1,124,720 from the Education and General Fund budgets on athletics in the 2009-2010 school year, according to the report.
Schools with relatively small athletics programs composed the highest percentage of their athletics budgets with the public funding.
Southern Arkansas University’s athletics revenue, the second-smallest in the state, totaled $2.8 million.
“Part of it is simply mathematics,” Rankin said.
Channeling general funds toward athletics helps support about $861,000 in scholarships and bolster support for the university, Rankin said. He estimated the university’s 300 student athletes amount to about 500 students by bringing siblings and high school classmates along with them.
Educational and General funds made up 35.4 percent of the athletics budget at Henderson State University, 28.7 percent at Arkansas Tech University and 22.7 percent at the University of Arkansas at Monticello.
The University of Arkansas at Fayetteville, which derived most of its $69 million in athletic funding from ticket sales, tournament agreements and private foundation funding, used none of its public fund to support athletics.
ATHLETIC FEES
The University of Arkansas at Fort Smith was the only other university to spend no Educational and General funding on athletics.
“We have looked at athletics to be treated as a total auxiliary expense,” said Mark Horn, vice chancellor for finance and administration. “That E and G money needs to be kept on the instructional support side.”
Instead, 78 percent of UAFS’ $2.9 million athletics budget was made up of a per hour student athletics fee. The fee, charged to all students, increased from $12 to $13 per credit hour this year, Horn said. A portion of an activities fee, also set at $13 per credit hour, is directed into athletics, he said.
The fees would add $390 a semester for a student taking 15 credit hours, the average full-time course load.
“From the student’s point of view, they’re not going to care if a dollar goes to auxiliary funds or to E and G dollars,” Horn said. “It’s still a dollar from their pocket.”
Despite growth in student fees, the Fort Smith campus’ cost for a semester of full time coursework remains lower than any other fouryear school in the state, he said.
Fort Smith pulled the highest percentage of its athletic funding from student athletic fees, followed by Arkansas Tech at 60 percent, the University of Arkansas at Little Rock at 58 percent and the University of Central Arkansas at 48 percent.
Campuses are looking for alternative sources of revenue.
UCA, for example, this year asked its student government association to spend $30,000 to become a corporate sponsor of the school’s athleticgames, a move senators rejected.
The Echo, UCA’s student newspaper, had editorialized against the proposal.
“The athletic department has discovered a new opportunity to squeeze money out of students, as if the athletic fee isn’t high enough already,” the editorial began.
In May, UCA’s board of trustees approved a $3-per credit-hour increase in athletic fees. As a result, the mandatory charge for students rose to $17 per credit hour, meaning the total per semester impact went from $210 to $255 for a student taking 15 hours.
SPENDING GROWTH
Most of the growth in athletic spending came at the Fayetteville campus, where ticket sales make up 48 percent of the athletics budget, the expenditure report said.
While expenditures rose past budget projections, each campus generated enough revenue to cover them.
State law requires institutions to balance athletic budgets, drawing money to compensate for revenue shortfalls from auxiliary funds, which are drawn from sources such as parking fees and bookstore profits, said Jackie Holloway, senior associate director of finance for the higher education department.
Amy Perko, executive director of the Knight Commission on Intercollegiate Athletics, said the public is generally unaware of the extent intercollegiate athletics rely on taxpayer and student support to survive.
“There is a misperception that many of these programs are self-sufficient,” she said. “Frankly, many of the smaller programs wouldn’t survive without university support.”
The commission’s goal is encouraging intercollegiate athletic programs to balance competitive goals with the academic missions of their institutions.
A Knight Commission report, released over the summer, encouraged rules to slow the growth of athletic spending, which has outpaced the growth of academic spending, even as a recession hampered state budgets.
The report’s recommendations included tying a team’s funding to academic measures, such as retention and graduation rates, and increasing awareness of where athletic funding comes from.
“There needs to be some balance,” Perko said.
Information for this article was contributed by Debra Hale-Shelton of the Arkansas Democrat-Gazette.
Front Section, Pages 1 on 10/25/2010