College building boom puts Indiana in tough situation

A building boom at Indiana colleges is causing concern for Gov. Mitch Daniels’ administration as it tries to shore up
the state’s finances.

The state has approved more than $1 billion in university projects in the last 18 months. The
spending is a sharp contrast to universities nationally, which have seen construction spending drop from more than $15 billion
in 2006 to $13.3 billion last year.

But the projects also increase universities’ debt loads. The state expects to
spend $177 million in 2011 on university debt payments, a 67-percent increase from 10 years ago.

State Budget Director
Chris Ruhl says that’s money that can’t be spent on faculty, staff and other university operations.

"The question
is: Are we putting an inordinate amount of resources into construction at the expense of instruction?" Ruhl said. "We’ve
tried to observe to the universities that every dollar that’s tied up in fixed costs like debt service is not available
for something else."

The General Assembly authorized 29 university construction projects in the two-year budget
cycle that began July 1. Money for about half the projects has already been released by the state budget committee.

Republican
Sen. Luke Kenley of Noblesville, the committee’s chairman, says the projects support construction jobs at a time when they
are needed most.

Much of the money has been spent on the rapidly growing Ivy Tech Community College system.

Many
of Ivy Tech’s campuses are experiencing significant growth since shifting from technical schools to the community college
system. But Indiana Higher Education Commission Chairwoman Teresa Lubbers said she expects capital spending for the community
college to slow in the near future.

Rep. Ed Clere, R-New Albany, said lawmakers should make sure they leave money
for operating costs so that universities aren’t forced to raise tuition because of construction debt.

"If we
have great buildings and families can’t afford to send their children to college in those great buildings, then why have
great buildings at all? There does need to be a balance," he said.

Kenley agreed and cautioned lawmakers against
seeking pet projects in their districts. Clere, for instance, helped insert $22 million for an Indiana University Southeast
building into the budget in the final days, even though it had not been recommended by the education commission.

"Legislators
have a little bit too much of a penchant for trying to get a project in their area. It’s a badge of honor, a sign that you’re
getting things accomplished," Kenley said. "But I expect the project demand and the evaluation to be a little
tighter in the future."