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Commission on Higher Education approves $2.12 billion budget

This approval marks a substantial increase of $135.81 million, or 6.84 percent, from the previous fiscal year.

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In a pivotal move, the Alabama Commission on Higher Education (ACHE) has approved a robust $2.12 billion budget for the state’s public higher education institutions for the fiscal year 2024-25. This approval, which occurred during the commission’s recent quarterly meeting, marks a substantial increase of $135.81 million, or 6.84 percent, from the previous fiscal year.

The ACHE’s legal mandate includes presenting an annual Consolidated Budget Recommendation (CBR) for Alabama’s two- and four-year institutions to both the governor and the state Legislature. Prior to this meeting, ACHE’s finance committee conducted budget hearings, offering a platform for institutional representatives to voice their financial needs and challenges.

The primary concerns highlighted during these hearings included escalating inflationary pressures, challenges in maintaining competitive employee salaries, and the need to address ongoing deferred maintenance issues. This year’s discussions also emphasized the growing mandatory costs related to insurance premiums and retirement contributions. A notable factor contributing to financial strain has been the significant rise in property insurance premiums, driven by higher construction costs and ongoing supply chain difficulties.

Jim Purcell, ACHE Executive Director, underscored the impact of inflation on campus operations across the state’s colleges and universities. Stan Nelson, Chairman of the ACHE Finance Committee, echoed these sentiments, noting that the annual budget hearings consistently reveal common financial themes, with increasing mandatory costs being a recurrent topic this year.

The institutions have projected their capital project needs for FY 2024-25 to surpass $3.24 billion, with a significant portion allocated towards new construction, renovation, and deferred maintenance. The aging infrastructure of the campuses, with over 37 percent of the buildings constructed between 1960 and 1989, further underscores the urgency of these capital requirements.

In addition to budgetary discussions, the commissioners approved several new academic programs for various universities across the state. These programs range from advanced degrees in social psychology, human rights, and artificial intelligence to undergraduate offerings in parks and recreation management, nutrition, and sports coaching. The University of Alabama at Birmingham notably introduced multiple new programs in areas such as construction engineering management, applied developmental psychology, behavioral neuroscience, and medical/clinical psychology.

The ACHE’s budget approval and the introduction of new academic programs reflect a comprehensive approach to addressing the evolving educational and infrastructural needs of Alabama’s public higher education institutions. This strategic financial planning aims to ensure that these institutions continue to provide quality education and remain competitive in an increasingly challenging economic environment.

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