New laws bring changes to UA System schools

MORRILTON — Colleges and universities in the University of Arkansas System will have more automated external defibrillators and opioid overdose kits on campuses this year, students accused of serious disciplinary infractions will have expanded access to legal counsel, and students will be able to use scholarship funds for summer courses.

Those are just some of the changes following a raft of new legislation passed earlier this year by the Arkansas Legislature that affects the state’s higher education institutions. Ben Beaumont, UA System senior director of Policy and Public Affairs, and Melissa Rust, UA System vice president for University Relations, briefed the UA System board of trustees on the new laws during the trustees annual retreat at the Winthrop Rockefeller Institute

recently.

Act 737 of 2023 mandates that automated external defibrillators — or AEDs — be available at certain school-sponsored sporting events and on higher education campuses, said Rust. Act 811 of 2023 mandates opioid overdose rescue kits be located on each campus of public high schools and state-supported institution of higher education — such as the UA System schools — and “folks will have to be trained” to use both the kits and AEDs.

Act 470 of 2023 concerns student conduct disciplinary proceedings at the state’s public colleges and universities and emphasizes “due process,” she said. For example, each side can have an attorney or advocate “fully participate in proceedings,” including cross-examination of witnesses.

There’s also an appeals process, she said. In addition,

the chancellor or vice president of student services must sign a document acknowledging all elements of due process were followed.

The act applies to “serious violations,” those that could result in suspension or expulsion, according to the state of Arkansas. These do not include academic dishonesty.

Act 614 of 2023 strengthens freedom of speech and expression protections on campus, Beaumont said.

Perhaps the most notable addition is that campus forums that had traditionally been outdoors can move inside to any non-academic and publicly open portion of a facility that has traditionally been available to members of the campus community for expressive purposes — such as a Student Union building — and “we supported this” legislation.

Act 542 of 2023 prohibits requiring employees and faculty of public schools and universities to use a student’s preferred pronouns without parental consent, he said. Act 413 of 2023 requires the Arkansas Department of Higher Education to allow scholarship funds for summer courses.

Act 511 of 2023 permits implicit bias training to be offered, but staff can’t be compelled to attend, nor can they be punished for declining, Rust said.

It’s only permitted if at least 95% of the implicit bias training is required by an accreditor, grantor, or licensor.

Act 514 of 2023 establishes the Creating a Respectful and Open World for Natural Hair (CROWN) Act, which bans hair discrimination in public schools and the state’s colleges and universities. Act 880 of 2023 prevents state-funded medical schools from spending state general revenue funds from tax dollars on the name, image, and likeness (NIL deals) of a student-athlete under the Arkansas Student-Athlete Publicity Rights Act.

“We weren’t doing that anyway,” but now it’s explicitly prohibited, Beaumont said of Act 880.

Though student-athletes from the University of Arkansas, Fayetteville have been in ads for the University of Arkansas for Medical Sciences, for example, no public funds were ever used.

FUNDING

Also during this year’s state legislative session, UAMS received a $5 million increase in base appropriations — for the first time in years — for the fiscal year that started July 1, said Rust.

In terms of appropriations, UAMS is considered a “non-formula entity,” like the UA System’s Division of Agriculture, the Criminal Justice Institute, and Clinton School of Public Service, among others.

“Non-formula entity” appropriations differ from the system’s other institutions, which are subject to productivity funding, a mechanism to align institutional funding with statewide priorities for higher education by incentivizing progress toward statewide goals in the areas of efficiency, effectiveness, affordability, and adjustments. Institutions cannot lose or gain more than 2% in base appropriations year to year based on their productivity scores.

Half of the UA System’s institutions will increase their appropriations this fiscal year, while the other six will see a decrease, Rust said. Most in the latter category had been in the former designation in recent years, but “this ebbs” year to year.

UA-Fayetteville has historically performed very well in this metric, and this year was no exception, receiving $6.4 million total for the fiscal year that began July 1, she said. They “did extremely well.”

Productivity funding began in fiscal year 2019, and the University of Arkansas-Pulaski Technical College had never received an increase, she said. That changes this year, with a roughly $345,000 increase.

The University of Arkansas at Pine Bluff and the University of Arkansas at Fort Smith were the UA System schools with the largest decrease this year, losing more than $450,000 and more than $400,000 in appropriations, respectively, from the prior year.

UAMS FINANCES

UAMS received $30 million from the state’s Budget Stabilization Trust Fund, which “is more of an advance than a loan,” UAMS Chancellor Cam Patterson told the trustees.

UAMS will pay the $30 million back over 10 months, beginning in September, as the standard for loans from the Budget Stabilization Trust Fund is to repay them by the end of the fiscal year, said Amanda George, UAMS chief financial officer and vice chancellor for finance. The state will simply hold back $3 million of the medical center’s funding each month as repayment.

UAMS had an operating loss of $30 million for its 2023 fiscal year — July 1, 2022-May 31, 2023 — and is laying off 51 positions effective Sept. 7. Another 183 open positions will not be filled; UAMS currently has more than 11,000 employees.

UAMS expects to receive another $30 million in January as part of a recent settlement with the Centers for Medicare & Medicaid Services, which had been underpaying myriad hospitals for a certain prescription drug program, George said. UAMS has also undertaken several measures to reduce expenses, including “a hard hiring freeze” that is currently slated to be in effect until October 1.

Though UAMS had been in a hiring “frost” for months, the more dramatic measure freezes hiring in all-but a few essential areas, such as nursing, she said. There’s a state and national nursing shortage from which UAMS has not been exempt, and limited nursing staff reduces the amount of beds UAMS can make available for patients.

The most immediate need for UAMS is cash on hand, George said. UAMS had roughly 30 days cash on hand.

The UA System recommends double that for cash on hand, said Tara Smith, the system’s chief financial officer. In 2022, cash on hand for UAMS was 55 days.

George believes “we will be cash flow positive in August,” even without accounting for the $30 million from the state, after “a rough June and July.”

Though UAMS also faced headwinds the past couple of years, those struggles were offset by funds from the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act and American Rescue Plan, she said. However, those funds are no longer available in fiscal year 2024.

It’s not unusual to be short on cash and need to access the Budget Stabilization Loan Fund, but it’s typically smaller institutions, not one as large as UAMS, said Morril Harriman, chairman of the UA System board of trustees. The amount of this loan is also larger than usual.

Patterson, George, and others “jumped on this problem and addressed it as soon as it was recognized,” said Sheffield Nelson, vice chairman of the board. They “couldn’t be much better [positioned now] considering where they found themselves.”

Trustee Ed Fryar expressed similar sentiments, saying “it sounds like a good plan.”

UAMS has expanded recently, opening an $85 million surgical facility dedicated to treating orthopedic and spine patients in May and a $65 million, 58,000-squarefoot Radiation Oncology Center in Little Rock this summer — the second floor of which will house the 9,000-squarefoot Proton Center of Arkansas, slated to open in October. UAMS is also working to become a National Cancer Institute.

NCI designation is the country’s most distinguished status for cancer centers, and there are 71 NCI-designated cancer centers in the country, but none in Arkansas, according to UAMS. More than two-thirds of funds awarded by NCI for research and clinical trials go to NCI-designated centers, and many NCI community outreach and program grants are only offered to NCI-designated cancer centers.

UAMS projects that NCI Designation would have an economic impact of $72 million to the state annually.

Overall, the UA System’s bond credit rating from Moody’s remains Aa2, with a “stable outlook,” as it has for at least the past decade, Smith said. The system has “strong credit quality.”

The system’s net position is also increasing annually, she said. Core revenues remain ahead of core expenses.