Live Blogging of the Apr 23 Meet & Confer

5:15PM That is it. No more information today.

5:15PM So, to summarize, nobody is safe, but some people are less unsafe? Chuckles, then yes.

5:14PM More Q&A: but, sorry, I missed most of it. VP Academic commented that Iris Gill is very aware of the limitations of the data. The 75% is being used to determine which programs will get a very, very detailed analysis of budgets. At this point does each of the Deans understand that there are specific programs under 75% and that the Deans are working with the departments and that the deans will notify those departments, but that President continues to examine programs and may ask for addtional information and discussion? Hard question; President is not plannign to go looking for programs to get at but is trying to be conciensous about looking for cases where expensive programs may not have yet been broken out separately. Are chairs being asked to prepare reports, or all members of department? President: presumed chairs would speak with departments, and will not interfere in department governance. IFO: Expectation is that all faculty in departments will be involved. Is lost revenue due to cuts being included in models? Yes, and looking for one-time money to help with some of that. Under contract chairs are coordinators so shouldn't faculty be consulted according to contract? [Followed up by another question] Doesn't "departments" mean all faculty in department not with "department chairs"? President: Intent is fofr departments to respond.

5:01PM IFO is summarizing: President has reviewed budget and formally announced that there will be retrenchments. The President will continue to gather data and wants reports from the under 75% departments to fully understand the situation. Will seek input on academic side primarily from AABAC by reacting to proposed budgets.

5:00PM Can program curricular changes be considered over the summer? Maybe. What is role of AABAC? They will react to President's proposals and act as a sounding board. [Missed another question.] Is out of state tuition being considered? Yes, for international students. [Missed another question, answer was that she is looking for least terrible solution.]

4:53PM Are programs that draw students being given recognition for that? Yes, but need to look at how many students are being attracted. Is impact of the loss of students in a low recovery program on other departments being considered? Yes, but it has been hard to unravel this. Can any of the under 75% programs survive? Most will probably survive, but we do need to come up with $3.43 in cuts. [Missed a question, sorry] Will department budget cuts from this year be restored? Sounds like budgets are being rebuilt from the ground up, and the immediate goal in any event is to get through the immediate crisis. Why 75%? Think of the state appropriation of overhead. 75% means you are supporting 74% of your direct costs, but someone else is subsidizing the other 25% with their tuition revenue. Another thing to consider is whether differential tuition is appropriate.

4:49PM Q&A: Are you safe if you are above 75% cost recovery? No, not necessarily, but less likely to be cut.

4:48PM More Q&A: Can departments challenge data they believe to be incorrect or only propose cuts or more revenue? Numbers for low programs are being scrutinized. Graduate programs? Only those that are sustainable (from their own tuition revenue) will be kept; graduation education for its own sake will not. How much money in personnel cuts? Worst case, hopefully, $3.43M, but don't know. Cost recovery ratio doesn't indicate absolute amount of money saved--a low recovery ratio could still be a small expense and a high ratio might not be lots of money--is this being taken into account? Yes. How are department staff being included? Included in program cost recovery ratio. Are administrative/nonacademic cuts being considered? Yes, but need to know more before deciding. What about proposed department mergers (specifically History and Political Science)? President: good idea, VP Academic: need some clarification from those departments.

4:40PM Q&A: IFO asked if reaching the cost recovery goals means a department is safe. The answer is no, that alone may not do it because cuts will need to be made. IFO asks what is meant by program given that retrenchment happens within seniority rosters. The answer was unclear; basically I think it was that distinct programs (meaning cost centers or package of courses) would be studied, but no answer on how that relates to rosters.

4:35PM IFO expressed desire to extend timeline for departments to reach the tuition cost recovery goals, especially because this benchmark was new to departments to which the President responded that a fiscal emergency requires a fiscal criteria.

4:31PM The President's demeanor was serious, almost shaken at times, but confident. It is clear to me she is working to do the best that can be done and is reluctantly going this route.

4:31PM Looks like no announcement of specific programs today.

4:30PM More dates: June 3-4 meet with AABAC to discuss reports on low tuition recovery programs, from June 24th, July 8th&9th all VPs present plans to UPB, on July 15 present final plan to UPB, July 16 meet bargaining units in the morning, then M&C with IFO in the afternoon.

4:26PM Memo of retrenchment, first some genrealities: Frozen faculty positions are all positions for which funding exists at this time (not sure what that means). Tuition shortfall this year is $800k, total deficit is $8.5M. Salary freeze saves 1.2M and 1.4 in frozen positions but probably drops to 0.7M when critical positions unfrozen. Other savings were listed in detail, see the mid-March budget remarks. Operating budget cuts add up to $o.4-0.5M. This still doesn't fully plug the hole. Some positions being searched: director of housing and one other funded by fees and looking for a marketing director, recruiter, and data manager for enrollment.

4:22PM Some dates: July 16 budget presentation to bargaining unit leaders, followed by July 21, 22 MnSCU Board meeting, then lay off notices sent out after July 27th M&C with IFO if requested.

4:20PM The President seems clearly

4:17PM President thanked faculty for their participation in the process so far and indicated the reports were read and will be included in decision making. Then described some history: The perfect storm: structural shortfall ($4.95M, up by $800k) and economic recession leading to reduction in base (estimated $3.8M I think). Student credit hour generation has decreased steadily over the last 5 years, and decisions made to hold tuition low.

4:12PM President will present formal memorandum of intent to retrench after discussion background.

4:10PM Now the President is up to talk about retrenchment...

4:09PM IFO raised a question about MSUM participation in a program funded by the Lumina Foundation to "tune" programs to standardize outcomes so that employers know exactly what graduates will know. Translation: make programs standard rather than allowing variation (my translation). The Biosciences chair described faculty participation in this project so far after VP Academic explained that the conversation began with a call from MnSCU that some of this grant money was available. IFO strongly objects that this is a violation of contract because when faculty represent faculty it is to go through IFO. VP Academic responded that admin did not forward names, merely let faculty know that MnSCU was soliciting, and that she assumed it had been discussed at statwide Meet&Confer. In response to a question VP Academic indicated all travel has been paid for by Lumina.

4:00PM Now the first job-related issue...IFO mentioned chatter that some deans were recommending adjunct over overload. VP Academic said that is not the admin position, but that she has been advising deans not to make any offers of overload or adjunct until we know for sure what the funding situation is. IFO and Bette agree that when it gets to that point additional consultation will be needed.

3:56PM Information was just shared. No idea what because it was hardcopy, but you can contact IFO if you want to know what.

3:55PM Email discussion is done, nothing will be done until more planning is completed, this was just a first mention.

3:44PM I finally asked my first question, about transitioning email addresses. Not a stunning question, and in retrospect these questions just delay the time it takes to get to the part we are interested in...retrenchment.

3:33PM Looks like it will be a while until we get to the big stuff. Dan Heckaman, CIO, is talking about the feasibility of changing our web address/email to msum.edu. CIO indicated that would be hard, then discussed changing email addresses to first.last name (like matt.craig). Mike McCord asked how much it would cost...the answer is 2.5-3 months full time for 6 people. Ouch. Mike Ruth pointed out that lots of printed material will have to be tossed out.

3:32PM Hockey committee...IFO and the President appointed people.

3:28PM Some good news....summer school will pull in at least $500k profit.

3:21PM On to the Mission Statement, which the MnSCU Board wants Real Soon Now. If I were more interested in the mission statement I'd tell you more. The proposed statement:

Minnesota State University Moorhead is a caring community promising all students the opportunity to discover their passions, the rigor to develop intellectually[,] and the versatility to shape a changing world.

Debate almost erupted over the comma in brackets above, but was truncated by a question about whether ours is really any different than other MnSCU statements.

3:11PM Military withdrawals...the 100 or so people here are too interested. Send military students to Registrar, faculty do have freedom to work out an incomplete if they want to, or may decline to work that out and refer student to Registrar for other options. Not that many people really care right now.

3:09PM And so it begins...starting with military withdrawals and other run-of-the-mill stuff.

3:06PM People are still coming in, nothing happening yet.

Comparison of MN House and Senate Higher Ed Bills

The most noticeable (and noted) difference between the higher education bills in the House (HF 869) and Senate (SF2083) is the level of funding.

The details of the bills also differ in a number of ways that will impact our situation at MSUM. A list of points on which the bills differ is below. Follow the links to read the comparisons, or get a PDF copy of the whole shebang.

1. Total funding (base and stimulus).
2. Base funding level for next biennium FY2012-13 (determines funding level used in planning).
3. Limits on MnSCU central funding.
4. Restrictions on use of stimulus funds.
5. Caps on tuition increases.

The information in this comparison is based in part on information from Russ Stanton, IFO Legislative Liason, and from the education bills themselves.

House/Senate comparison: Total funds (base plus stimulus)

For FY 2010:
Senate: $675.4M = $615.3M base + $60M stimulus
House: $665,8M = $600.6M base + $65.2M stimulus (but MnSCU central takes the big hit)
Governor: same as House, but no restrictions on how much MnSCU central gets

For FY 2011:
Senate: $644M = $644M base + no stimulus
House: $$665,8M = $600.6M base + $65.2M stimulus (same as FY2010 above)
Governor: same as House, but no restrictions on how much MnSCU central gets

Implications for MSUM: The base matters. Of the three, we probably get the most base money from the House bill because it directs the base reduction at MnSCU, though the Senate bill has more base money each year of the biennium.

House/Senate comparison: Base funding level for next biennium FY2012-13

Senate: Base funding for FY2012 and FY2013 is $627,849,000, a reduction of about 8% from the FY2009 base of $682,417,000 (my FY2009 number does not include the Governor's unallotment; the Senate's goal was a 7% reduction across the board in state funding).

House: Base funding for FY2012 and 2013 is a bit more complicated because funding for MnSCU central and the campuses are separated. For the campuses the base for FY2012-13 is $609,631,000, and:

8.8 (b) Allocations to campuses from
8.9 appropriations under this section must
8.10 not be reduced below the allocations for
8.11 the biennium ending June 30, 2009, after
8.12 deducting any amount unallotted in the
8.13 biennium.

The total MnSCU base for FY2012/2013 is $654.5M, a reduction of 4%, but MnSCU central is forced to take the reduction.

Implications for MSUM: The FY2012-2013 numbers matter because they drive the decisions being made now about how much to cut. The House language is clearly better for us. Our funding will still go down because of the enrollment issues the President has discussed, but not as much as if the Senate bill passes.

House/Senate higher ed: Restrictions on use of stimulus funds.

Senate: Emphasizes using the money to hold down tuition increases. From the bill:

10.28 This appropriation must be allocated to
10.29 mitigate the need to raise tuition and
10.30 fees for Minnesota resident students.

The Senate also requires MnSCU to submit a detailed plan describing how stimulus funds will be allocated, the effects on the amount of proposed tuition increases, and must describe any amounts allocated to other education and general purposes, including how those purposes mitigate the need to raise tuition. The plan is due to the director of the Office of Higher Education by June 1, 2009, who must approve the plan by June 15, 2009, and the director has the power to require changes. The director must confer with the legislature before approving the plan.

House: Places less emphasis on tuition reduction. From the House bill:

11.1 Appropriations under this subdivision
11.2 must be used as a bridge for budget
11.3 reductions in the biennium ending June 30,
11.4 2013, and may be used to retain faculty
11.5 and staff jobs, to provide severance and for
11.6 early retirement incentives, and to mitigate
11.7 the rising costs of attendance through
11.8 minimizing tuition increases and the support
11.9 of student employment opportunities.

In addition, the House imposes a cap on tuition increases.

Implications for MSUM: The House version seems to allow more flexibility in using the funds, and explicitly allows the kinds of things being discussed on our campus. The Senate's focus on tuition may reduce flexibility, though it ought to be fairly easy to argue that if you don't reduce staff tuition would have to increase even more. The requirement for a plan seems like a good accountability measure for MnSCU, though the timeline seems pretty tight. I don't know if our campus will know how it wants to use the money by then.

House/Senate higher ed comparison: Limits on MnSCU central funding.

Senate: No firm restrictions, though the Chancellor is directed to review "institutional priority allocations" (centers of excellence, competitive salaries, community energy pilots, e-folio upgrade) and make a recommendation to the board as to whether they are important to "advancing the educational mission and priorities of the system," and the Board can discontinue funding.

House: Limits central office funding to $47M each year, decreasing to $44M in FY2012-13; forbids filling any currently open administrative or managerial positions (even on campuses), institutes a pay freeze for admin, and forbids the use of search firms in hiring; eliminates centers of excellence and other MnSCU priorities and directs that the money go to campuses; limits funding for technology initiatives to $40M.

Implications for MSUM: The provisions in the House bill, with the potential exception of the limitation on filling admin/managerial positions, are all beneficial to MSUM. The House directs as much money as possible to campuses, which is particularly important in a time of decreasing overall funding.

House/Senate higher ed bill comparison: Caps on tuition increases

Senate: no caps on tuition increases, and an amendment on the Senate floor to add a cap failed. Stimulus money must be used to minimize tuition increases.

House: caps resident tuition increases at 5% and requires stimulus money be used to buy the increase down to 2%.

Implications for MSUM: Tuition caps written in as a percentage put us at a disadvantage compared to other state universities because our tuition is relatively low, so a 5% increase here doesn't generate as much money as 5% elsewhere, and institutions vary in the ratio of tuition to fees. Language which allowed the flexibility to accomodate those institutional variations while preserving the spirit of keeping costs low would be helpful.

News from the All Chairs Meeting--delay in prioritization process?

President Edna said at the Chairs meeting on Wed, Apr 15, that she thinks the prioritization process needs more time, and mentioned bringing AABAC and UPB back in June. There would be some logistical issues I assume in finding a way to continue to get broad faculty feedback into the summer, but stretching it somewhat would make the process a process.

She also said that main criteria for which programs will be "under the microscope" is those with a 4 year tuition cost recovery of roughly 75% or less, though she acknowledged that the data is incomplete.

Personally I think the clarity about the benchmark and an extension of the process are both good.

You may feel differently, which is why it is very important to make your feelings known. Let IFO know what you think (ifo@mnstate.edu), ask President Edna questions if you have them (szymanski@mnstate.edu), and/or come to the April 23 Meet & Confer, at which the IFO will confer with the president regarding the change in timeline and probably other issues.

You can make a difference in this process, but not by keeping your thoughts to yourself.

Right now that M&C is scheduled for 3PM at the Gaede Stage (it was supposed to be the first announcement of programs in jeopardy), though you should watch your email for the agenda/location.

The case that lay offs now save jobs later

To be perfectly clear, this is my argument. I believe it follows the President's argument closely but I don't want to misrepresent my words as being hers. I found the summary President Edna presented at the April 9 Meet&Confer very helpful.

Stimulus money lasts only one biennium...use it for one-time costs or for ongoing costs?

The stimulus money is definitely only around for FY2010 and 2011. The Governor, Senate and House all plan to cut state money for higher ed this biennium, in part because the stimulus bill says they only need to provide state funds at the FY2006 level.

So, spend stimulus on one-time costs or for ongoing costs?

The answer depends on what the state will do in two years.

If, two years from now, state higher ed funding is going to go back up to the FY2009 level, use the stimulus to pay for operating expenses likes salaries and lay off few people now, because the dip in state funding is a temporary drop caused by a bad recession.

If, two years from now, state higher ed funding stays at the dismal FY2006 level, then use the stimulus only for one-time costs, because after the stimulus runs out the budget drops to the 2006 level.

The 2006 level would require layoffs, and layoffs have one-time costs, so laying off now cuts fewer jobs than laying off in two years.

Deciding which course of action is reasonable depends on estimating what the state budget will be like in two years, so...

What will the state budget be in two years?

The short answer is nobody knows with 100% certainty. Nobody knows what river levels will do either, but we still pay attention to flood forecasts; what we need here is the Minnesota budget forecast.

It is bad. The gap between tax revenue and spending is projected at roughly $5B for the FY2012-13 biennium, even after an improving economy is taken into account.

I wrote a longer a post about just how bad it is.

The choice to be made

I think the choices boil down to:

1. Use the stimulus money to minimize the number of layoffs now, but at the risk of having to make many more layoffs in two years if state higher ed funding is still bad.
2. Use stimulus money to reduce the number of layoffs by paying for one-time costs of those layoffs, at the risk of finding in two years that the state higher ed budget isn't so bad and some of the layoffs were unnecessary.
3. Do some combination of 1 and 2.
   

What would I do? Honestly, I am not sure.

The other bit of useful info is that the forecast seems to indicate an 80% chance that revenue is as bad or worse than the forecast and only 20% chance it is better. That makes option 1 risky.

Ideally I would wait until the Legislature passes a budget that the Governor signs, but I fully understand the President does not have that luxury because if layoffs are necessary the planning has to start now given the notification deadlines in the IFO contract.

Why I was Confused

First some background to explain why I got so worked up over all of this in the first place. In January I understood the two problems MSUM faced:

• structural deficit (too little tuition, enrollment not keeping up with system)
• cut to base budget because state budget forecast for the next biennium was terrible.

Then one day I got email saying the stimulus bill had passed and that it would guarantee funding at the FY2008 or 2009 level, and I thought "Yippee! The base budget cut is gone, we can do a gentle adjustment to the size of the institution!" I might even have done a happy dance.

Then I went to the President's open forum in March and was confused--the level of personnel cuts was the same as before stimulus, the stimulus was going to be used to pay the one-time costs of layoffs and early retirements, and we were now looking ahead 4 years rather than 2.

When asked about the stimulus money, the President said the one time costs were previously going to be paid out of reserves, and that we would likely need the reserves in two years.

I left very confused, and came out of the April open forum with the impression that MnSCU was asserting that stimulus money could not be used for ongoing costs.

I am now a lot less confused, though ultimately also less happy.

Just how bad is Minnesota's budget forecast?

Short answer: bad. Every one is St. Paul seems to agree on that.

Why, and how bad? The gory details are in the Minnesota Management and Budget's latest forecast. It isn't enjoyable reading, but it is largely written in plain English.

Here is my very quick take:

Under current law and a reasonable budget prediction Minnesota plans to spend more than it takes in over each of the next 4 years. That is not allowed, so either we spend less, tax more, or a combination.

The gap is projected at roughly $5B for the FY2012-13 biennium, even after an improving economy is taken into account.

How bad the problem will actually be depends on how the state fixes the gap in 2010-2011. Right now the Governor refuses to consider raising any taxes and the Senate refuses to only cut spending. Sounds like a good time to contact your elected officials and make your mind known...readers of any political inclination ought to be able to find something to dislike.

Result? No budget for 2010-11 for a while yet, so no firm idea of exactly how bad 2012-13 will be.

Here is a longer take:

The forecast predicts tax revenues for FY2010-11 are about $30B, down by $2B from 2008-09, and up to $34B in FY2012-13, up by $2B from 08-09. Sounds great, for FY2012, right? The state will have more money in FY2012-13 than in the biennium just ending.

Sounds great, but it isn't good enough. The state projects that expenses will be up $5B, so the state projects it would spend $3B more than it takes in, which sounds bad.

It is actually worse because the gap for the biennium just ending was $2B, so by 2012 the projected gap between spending and revenue is actually $5B, the sum of the current gap and gap that develops between now and then.

Of course, this is a forecast. The discussion above makes no attempt to judge whether the forecast numbers are reasonable, but I could see the argument that the forecast actually downplays the gap.

The numbers above don't include inflation. With inflation the gap for FY2012-13 jumps by an estimated $1.36B, for a grand total of $6.26B.

Unfortunately, inflation will probably pick up when the wider economy picks up. So there seem to be two likely possibilities:

1. the economy picks up, lifting tax revenues by $2B from the past biennium, but inflation also picks up by $1.36B, just about wiping out the increase in revenue.
2. the economy does not pick up, so there is little or no inflation, but also no increase in tax revenue from current levels.

It does seem hard to see a scenario in which the overall state budget situation is a lot better than expected in FY2012-13.

That does not have to imply that the higher ed budget picture is bad. How the state closes the gap is a political question that will be hashed out by our Legislators and Governor, and in principle higher ed could not be cut at all.

But the only thing less predictable than budgets and river levels is probably politicians.

I hate the taste of crow, or, How Using Stimulus for Layoffs Can Save Jobs

One of the claims I made was that it makes no sense to take stimulus money intended to save and use it to pay for layoffs.

Now I've learned more, and the argument that it makes sense is not so hard.

Suppose we need to cut $1M for the biennium, and that I make $50,000 per year. Cutting me saves $100,000 for the biennium, but there is a one-time cost of $50,000 for laying me off. The faculty contract says I get to work next year even though I've been laid off, but you could think of this as a severance cost if you want.

So cutting me only save $50,000 if there is no stimulus money, and to get the $1M in cuts you need to lay off 20 people like me (because 20x$50,000 = $1M).

If there is stimulus then cutting me saves $100,000 because the stimulus money pays for the severance costs. To get the $1M in cuts you need to lay off 10 people like me, because 10x$100,000=$1M.

So using to the stimulus pay for the one-time lay off costs saves 10 jobs.

The same kind of argument would work for early retirement. The university gets the savings, the federal government pays the costs.

News from M&C

I think all of the questions I raised in the email I sent out Thursday morning were addressed at M&C today.

I need to get some rest and mull over what was said.

I do think the questions elicited the clearest explanation from the President of the budget decisions she has made and how the stimulus money affects those decisions.

I have not thought it through enough to figure out if I agree with it--and whether I personally agree with it or not is not really the point--but for the first time I think I understand the reasoning.

But I have to get sleep before I try explaining what I think I understand.

What MnSCU says seems, um, contradictory: stimulus can pay for operating costs

Warning: this is a rant. Read it for entertainment if you want, but the other posts have more info.

It didn't seem right to me that the stimulus money wouldn't reduce layoffs at MSUM. As a co-worker put it, MnSCU's position is: we should take money that was meant to prevent job loss and use it to make sure we can lay people off without digging into reserves.

Brilliant. Stimulate the economy by taking federal money, putting it in the bank, and firing people.

I thought it would be hard to find evidence that MnSCU was misleading in saying the stimulus is "one-time" money that cannot be used for routine expenses like paying salaries.

Then I read this in Gov. Pawlenty's revised MnSCU budget:

The small – 2.6% – operating reduction in FY 2010 and FY 2011 should be manageable. The FY 2012 and 2013 reduction of 10.7% of forecast base will provide significant challenge to the system... (Page 9, "Relationship to Base Budget")

So MnSCU goes down 2.6% and we go down 10%? Why? The Gov says:

The Governor recommends that MnSCU focus its federal stabilization funding on minimizing tuition increases in these two years [FY2010 and 2011], and focus its general fund appropriation on maintaining its highest priority services and reducing
duplication among programs where possible. (Page 9, Recommendation, last paragraph)

Translation: Gov. Pawlenty recommends all stabilization money be used to minimize tuition increase. OK, fine. How is MnSCU proposing we do that? By paying for the costs of downsizing. Why? So we can reduce duplication among programs.

That is not a legal requirement or a condition of using the money. It is a policy decision by MnSCU or the Board.

Still not convinced? Go to the MnSCU stimulus website and look at the Meeting Materials, specifically the Overview of Funding Opportunities, and read slide 12:

Stabilization Fund (cont.)

• Uses of Funds
• Education and general expenditures [emphasis added]
  
• Mitigate the need to raise tuition and fees
• Modernization, renovation or repair of facilities used for instruction, research or student housing

What wouldn't count as education and general expenditures? Wait, I know...salary!

Finally, read the stimulus bill yourself. I'll have an excerpt posted in a bit.

What the Stimulus bill says about Higher Ed

sta·bi·lize (stb-lz):

1. To make stable or steadfast.

2. To maintain the stability of (an airplane or ship, for example) by means of a stabilizer.

3. To keep from fluctuating; fix the level of: stabilize prices.

The Federal stimulus bill includes a "STATE FISCAL STABILIZATION FUND" that includes money for higher education. The meaning of stabilize is clear: to keep from fluctuating. Common sense indicates the intent of the Federal money is to keep higher education budgets (like that of MnSCU) from fluctuating wildly in this recession.

Reading the actual law confirms that (the Higher Ed stuff is on pages 165-168) . The bill states that:

A public institution of higher education that receives funds under this title shall use the funds for education and general expenditures, and in such a way as to mitigate the need to raise tuition and fees for in-State students, or for modernization, renovation, or repair of institution of higher education facilities... (Sec. 14004 (a))

"education and general expenditures" seems pretty broad to me. The bill also clearly calls for minimizing tuition increases.

Are there any restrictions or strings? Yes, in three ways.

The first is an explicit list of no-nos: no maintenance of equipment, no endowments, no stadiums and no religion (Sec. 14004 (b) and (c)).

The second is that the Federal government provides money only if the State provides money at the FY2006 level or higher (Sec. 14005 (d)(1)(B)).

Third is that the first priority for use of the money for higher ed must be:

to provide...the amount of funds to public institutions of higher education in the State that is needed to restore State support for such institutions (excluding tuition and fees paid by students) to the greater of the fiscal year 2008 or fiscal year 2009 level. (Sec. 14002 (a)(2)(A)(ii))

In other words, use the money so that the budgets of state colleges and universities do not have to be cut below the FY2008 or FY2009 level.

There is a caveat that comes later and only affects how much stimulus money there is, not how it can be used. If there isn't enough money to restore both Higher Ed and K-12 to FY2008/2009 the Governor is to make the two share the shortfall proportionately.