The University of Connecticut’s payments toward unfunded state employee pensions amounts to $1,000 per student, according to a recent presentation to UConn’s Board of Trustees, as the school’s tuition prices continue to rise.

Noting that the state generously increased its funding of UConn in 2022 to help mitigate the costs of state employee raises, Lloyd Blanchard, interim executive vice president for finance and chief financial officer for UConn, went on to say that Connecticut’s unfunded pension liabilities continue to be a burden on the state’s premier public university.

“The state fringe benefits continue to rise in their cost, and it’s gotten to a point where UConn spends about a thousand dollars per student, in terms of the tuition and fees that they pay. Those tuition and fees are going to pay for retiree liability and not for their education,” Blanchard said during an August 3 meeting to approve UConn’s budget request to the state.

“We continue to beat that drum with the state to help them understand that some of the costs that are imposed on us by the state are being covered by the students, inappropriately in our view,” Blanchard said.

Blanchard then went on to say that UConn’s tuition cost is approaching the high end of other similar institutions and is now being marked as a potential “risk” for the future.

“The in-state tuition rates are getting to a point where they’re being as close to other tuition rates for the highest of our peers,” Blanchard said. “As the rates go up, students are more sensitive to those numbers and could potentially make different choices about where they go to college.”

Blanchard added that demand for UConn, however, remains strong with the university receiving 40,000 applications for between 2,000 and 3,000 seats.

The fringe benefit costs for faculty and staff at UConn, which include payments toward the state’s unfunded pension debt, have risen steadily over the last decade and have impacted the university’s ability to obtain research grants, as well as helping drive up tuition costs.

According to UConn’s 2021 financial statement, the university paid out $685.1 million in fringe benefits, an increase of $87.4 million over 2020, making up 14.6 percent of the university’s expenses that year.

Looking forward to 2023, however, the fringe benefit cost will top out at over 21 percent of expenses, according to UConn’s biennium request presentation for fiscal years 2024 and 2025.

Meanwhile, tuition costs for the university have been rising steadily over the last decade as well. Tuition and fees for a 12-credit semester in 2012 was as $5,335 for in-state students and $13,783 for out of state students, according to UConn’s Office of the Bursar. For 2022, the cost had grown to $9,262 for in-state and $20,596 for out-of-state.

But Connecticut has also begun to pay down some of that pension debt through the state’s volatility cap. Budget surpluses during 2021 and 2022, meant a payoff of more than $5.2 billion toward pension debt for state employees and retired teachers.

That payoff means a lower annual contribution for the state, with Gov. Ned Lamont saying it will save roughly $400 million per year in annual payments.

The State of Connecticut funded UConn to the tune of $293 million for fiscal year 2023. UConn is preparing to ask the state for further assistance over the next two years, amounting to $338 million and $340.3 million in fiscal years 2024 and 2025, including an additional $42.3 million for legacy costs.

Blanchard said the increases will help offset increased salaries negotiated as part of the latest wage agreements between Gov. Lamont and the State Employees Bargaining Agent Coalition approved in 2022.

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