Georgia Tech athletics sweating budget cuts

Dan Radakovich wasn't at the State Capitol last week while students from public universities around the state protested the possibility of excessive tuition increases for next school year. But Georgia Tech's athletics director would have fit right in among those concerned.

If those fees rise substantially as the state legislature recently has suggested, the cash-strapped Georgia Tech Athletic Association (GTAA), as well as other Georgia public university and college athletic departments, will have to pony up. They are tasked with paying tuition to their respective schools on behalf of scholarship student-athletes.

“We in the Athletic Association are the biggest parent on campus," Radakovich said. "We have 375 student-athletes and about 220 full scholarships and we are the chief financial resource for most of them. It creates an awful lot of obligation on our part to pay the Institute."

Tuition increase ahead

The GTAA has already projected a $200,000 increase in tuition expenses over last year and that's based on a whopping 20 percent predicted tuition increase, according to GTAA chief financial officer Frank Hardymon. GTAA officials sought guidance from school officials in forecasting for the 2010-11 school year. Hardymon said tuition costs historically rise 6 to 8 percent per year.

“It was a combination of reading the tea leaves a little and knowing the state isn't out of the woods financially and it was very likely that one of the tools they were going to look at would be increasing tuition," he said. "It was communicated from the Institute's finance office. They were just ball-parking it and they came back with that 20 percent."

Radakovich is paying close attention as members of the legislature look for ways to cut more than $300 million in state-wide education funding for the next fiscal year. There has been speculation that tuition could go up even more than 20 percent.

GTAA officials have budgeted about $8 million in scholarship expenses for fiscal year 2011 (which includes the 2010-11 school year), or about $400,000 more than the previous year. Of that expense, approximately $4.1 million goes to tuition fees. Tuition this year at Tech is about $6,000 for in-state students and approximately $21,000 for out-of-state students.

The GTAA's projected revenues are expected to be down roughly $2.5 million over the previous fiscal year, prompting a reduction of some $3 million in expenses over the past year or so. Those cuts have been made through a staff reduction of 16 (mostly in marketing, ticket sales and maintenance; some of that work is now out-sourced) and measures like modest travel reductions by some teams.

While additional limitations on travel might be considered if tuition costs rises more than expected, the idea of reducing sports programs, which would be difficult if Tech intends to remain a Division I school, is not likely.

Asked if Tech might scale back on scholarships -- the athletics department currently funds the maximum number allowable by the NCAA in each of its 15 sports -- Radakovich said, "For me to say no or yes, either one could be a lie. We think we have pegged a number ... here's where our scholarship budget will be.

“But over the next several weeks, if that number changes, we'll have to go back in and try to mitigate it."

Tech grants the GTAA 60 out-of-state tuition waivers, meaning the GTAA pays in-state tuition rates for 60 of its 91 out-of-state scholarship student-athletes and the full rate on the others.

Forty one percent of Tech's current scholarship student-athletes are from out of state. Radakovich said advising coaches to recruit fewer out-of-state athletes "really hasn't been something that we've talked about. We want to be competitive. We need to figure out how to make it work without putting that type of declaration on our coaches."

Money in, money out

Tech's $8-million scholarship budget is to be funded several ways: $2 million through endowments; $1.3 million through the out-of-state waivers; $1.7 million through unrestricted gifts such as the Alexander-Tharpe fund, which accepts donations from the public; and $3 million from the general operations fund.

Radakovich said the GTAA also has about $3.6 million in "savings" to be used for emergencies.