Put down the trowel, step away from the bricks and mortar

Critics attack campus building frenzy in the midst of swingeing budget cuts. Jon Marcus reports

December 15, 2011

Credit: Getty
Boom and bust: cash spent on estates 'is different money' from institutions' squeezed operating budgets, administrators contend

The campus of the University of California, Riverside features many gleaming, brand-new buildings. Among them is a state-of-the-art biomedical research complex that was completed in March, and a medical education centre that will be finished early in the new year.

Part of a $750 million (£480 million) programme of ongoing or recently completed construction on the campus east of Los Angeles, the buildings were designed to house a new medical school.

But at the moment, only a few administrators work in them.

That is because the public university does not have enough money to open the school, which was due to start accepting students next year.

California, in common with many US states, has slashed spending on public higher education; meanwhile, at private institutions, sluggish returns on investment have taken a comparable toll on operating budgets.

Enrolments have been cut. Employees have been laid off and furloughed. Class sizes have swelled. Tuition fees have risen dramatically. But US universities keep building.

"People who run universities want to leave a legacy. You can leave a legacy in terms of improved rankings; you can leave a legacy by winning national football championships; or you can leave a legacy by building a lot of buildings," said Richard Vedder, director of the Center for College Affordability and Productivity.

So US higher education institutions keep on building despite huge budget cuts, drawing on money from separate capital accounts, private contributions or higher student fees to do so.

Collectively, they spent $11 billion on construction in each of the past two years (the depths of the economic downturn), more than double their expenditure in 2000, according to market research firm McGraw-Hill Construction.

And the spending has continued at the same rate this year.

"You can go into any community and talk to somebody whose son or daughter either can't get in or can't finish [university] because they can't get this or that course," said David Wolf, co-founder of the Campaign for College Opportunity, which lobbies for the Californian academy. "Meanwhile, they go on campus and there's all that fresh cement. That's embarrassing and it's wrong."

Our hands are tied

University officials say the critics are missing the point, which is that money from capital accounts - much of it allocated before the downturn - can be used only for buildings, not for operating expenses.

"It's a common misperception," said Steve Springer, spokesman for the Los Angeles Community College District, which has halted $5.7 billion of construction to review, among other things, whether it can afford to operate the buildings once they are finished. "People say: 'Instead of putting the money into all these buildings, put it into hiring more faculty or increasing enrolment.' But it's different money."

But students also help to pay for the construction spree through increased fees for new dormitories and gyms, Dr Vedder said.

"The notion that this is somehow being financed in some way that is not costing students or taxpayers money is disingenuous in the extreme," he added.

The biggest problem is that the universities are having trouble finding the money to clean, heat, light, cool and maintain the new buildings - cash that has to come out of already overstretched operating budgets.

Construction accounts for only a third of what a building costs over its lifetime, according to APPA (previously known as the Association of Physical Plant Administrators), whose members oversee campus buildings. The price triples when maintenance and repairs are added.

New campus buildings are "the gifts that keep on taking", quipped the association's executive vice-president, Lander Medlin.

Dr Vedder argued that the building boom is evidence that universities need more business savvy.

"There's no bottom line in higher education," he said. "The private sector has a bottom line. So a business person says: 'Do we really have to build this building?'"

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