State colleges and universities granted higher level of financial flexibility

by | May 18, 2023

  • Gov. Ron DeSantis signed a bill this week aimed at giving budget flexibility to Florida universities and colleges.
  • The legislation removes fiscal caps on facility projects and allows the use of excess funds for various purposes.
  • Compensation limits for state university employees have been raised, and universities have more negotiating power in construction procurement.

Gov. Ron DeSantis signed a bill into law this week aimed at providing greater budget flexibility to universities and colleges in Florida by introducing financial regulation changes in areas including the use of carry forward fund balances, procurement processes, and compensation limitations.

Under the legislation, Senate Bill 7026, higher education institutions will no longer face fiscal caps on facility maintenance and remodeling projects, allowing them to utilize excess carry forward funds for a broader range of purposes. Presently, each state university is mandated to maintain a minimum carry forward balance of at least 7 percent of its state operating budget.

Moreover, compensation limitations for state university employees have been revised, with the measure raising the limit of how much state funding can be used to pay staff members, with the previous cap of $200,000 increasing to $250,000 per person. The bill also authorizes state universities to waive out-of-state fees for students receiving athletic scholarships.

The bill also proposes enhancements to the construction procurement process for universities, granting them increased negotiating power over project costs. Currently, when an institution plans to build a facility, it must request bids from firms based solely on their qualifications, disregarding cost. The university then evaluates and ranks the firms according to preference and enters into price negotiations. Should an agreement fail to be reached with the first choice, the university moves on to the second option. If no agreement is reached among the top three choices, the entire process must be restarted.

“What we’re seeing is a delay of time, and in construction, time is money,” said State University System Chancellor Ray Rodrigues, who spoke in favor of the legislation. “It delays the process and adds expense. We could be more efficient and less expensive if we were to adopt the change recommended in this bill.”

The bill garnered widespread bipartisan support, receiving unanimous endorsement in each of its committee stops and the floor vote in both chambers of The Capitol.


%d bloggers like this: