State: State lags on promised funding

State lags on promised funding

After promising to match gifts to Florida universities, the state has failed to come through with $105.2-million.

By ANITA KUMAR, Times Staff Writer

Kay Ustler donated $2.25-million to her alma mater, the University of Florida, in March 2000 to renovate one of the campus' original Tudor buildings.

The state promised to match the gift dollar-for-dollar to foot the $4.5-million renovation for new classrooms, offices and a library.

But the state hasn't kept its promise.

Nearly three years later, Ustler's contribution is in limbo along with the renovation.

"It's just gotten so frustrating because I went into this thing with so much excitement," said Ustler, 63, of Orlando. "If it doesn't happen this year, then I think my excitement will become disappointment. I just don't understand. You just think you wouldn't look a gift horse in the mouth."

Ustler is not alone. The Florida Legislature owes its 11 public universities more than $100-million to match about 500 donations for scholarships, faculty and research programs. It owes at least $25-million to the state's 28 community colleges.

And that doesn't include 35 construction projects -- like Ustler's -- that the schools can't start until the state puts up its $79-million share.

Now, universities are scrambling to keep crucial private money rolling in and contributors from asking for their donations back. Some donors are making their gifts contingent on a written agreement that the state provide a match by a certain date.

Gov. Jeb Bush's proposed budget unveiled last week includes just $1.7-million toward the $105.2-million backlog for scholarships, faculty and research. It does, however, include the $79-million needed for construction projects, including Ustler's. He recommends that $61.5-million of that come from a special lottery and the rest from general revenue.

That proposal is just a starting point. A long and contentious debate in the Legislature lies ahead.

Sen. Ken Pruitt, the Port St. Lucie Republican who chairs the budget committee, said he supported the program but didn't know whether the Legislature would have the money after it funded costly programs such as the one to reduce class sizes in public schools.

"It was a big mistake not to do it last year," he said. "It sends a terrible signal to private donors out there."

Rep. David Simmons, a Longwood Republican who heads the House Education Appropriations Committee, said lawmakers would do their best to fund the program.

"We're going to look at it very closely," he said. "We are going to work diligently to provide some -- if not all -- of the backlog."

University leaders hope so.

"People in good faith gave money to higher education institutions, and they will be upset, feel betrayed if the match isn't made," said University of South Florida president Judy Genshaft. "These are critical programs. I hope they don't go away."

The situation is the worst in the 23 years since the state began the matching gift program.

In 2000, the state gave $50.1-million for nonconstruction projects. In 2001, it dropped to $22.2-million. Last year, it was $12.4-million.

"There is certainly uneasiness," said Leslie Bram, associate vice president at the University of Florida Foundation, the fundraising arm of the school.

"Everybody asks us, and we're very up front about it. For the most part, people are frustrated but willing to wait."

Acquiring the matching gift money is among the universities' top priorities for the 60-day legislative session that begins March 4.

"I think people will realize how important this is," said Gus Stavros, a Pinellas County philanthropist waiting for two $600,000 donations -- one to USF and one to FSU -- to be matched. "We have good universities. We just need to fund them."

Education Commissioner Jim Horne said he didn't recommend funding the programs because he didn't have the money, but he acknowledges the strain the backlog puts on fundraising.

"Donors are frustrated," he said. "The word will be on the street that Florida doesn't put up its share."

There is also talk about making changes to the programs.

"We're trying to work toward a solution that's agreeble to everyone," said Jeff Robison, president of the Florida State University Foundation.

University officials said they could accept a cap on state matches that would pay up to $3-million a year on any project, not to exceed $15-million over five years. And they're also asking the state to borrow $125-million to make good on the backlog owed to universities and community colleges for nonconstruction projects. The annual cost of about $8-million would be paid from lottery money.

"We've gotten to the point where we have to look at changes," said Kathleen Daly, an FSU lobbyist. "We have to look at alternatives."

Gifts from major donors are crucial to university fundraising, especially now that economic times are tight and the state budget is stretched. But acquiring matching gifts has become more difficult, both because of the economy and the growth of the state university system.

"Donors understand the present state of the economy," said Howard Lipman, vice president of university advancement at Florida International University. "We try not to lead people on."

A 1979 Florida law requires the state to match large gifts to universities -- often dollar for dollar -- to convince potential donors that they are getting a maximum bang for their bucks. Other states have similar programs, but most aren't as generous as Florida's.

The minimum gift that qualifies for a match is $100,000, with the state contributing 50 percent, or $50,000. The bigger the gift, the bigger the match, with 100 percent matching on gifts of more than $2-million.

"It's one of the most effective programs the state has ever had," said St. Petersburg donor Bill Emerson, 81, who retired as senior vice president and national sales director from Merrill Lynch. "You think people aren't attracted by that kind of bargain?"

The program with the $105.2-million backlog of projects dating back to 1998 uses donations for scholarships, faculty chairs and research. Interest generated from investing the money -- not the principal -- is used to pay for programs.

The interest from the private money can be used while schools wait for a match.

The second matching gift program in need of $79-million for construction projects uses all the money it's given -- not just the interest -- but doesn't allow for private donations to be used until after the state money comes in.

Some of the more than 500 projects waiting for matches: An expansion of the Tampa Bay History Center in conjunction with USF. Scholarships at the FIU College of Health and Urban Affairs. A new science and engineering building at the University of North Florida. A radiation oncology professorship at UF.

Emerson and his wife, Jane, gave $3-million toward a 61,000-square-foot, three-story alumni building at UF that opened in August and bears their name. But they declined to have the state match the gift, allowing the building to be constructed without delay.

"The building wouldn't have been built," Emerson said. "Now, it's been built, dedicated and in use."

-- Times researchers Kitty Bennett, Caryn Baird and Cathy Wos contributed to this report.