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No More University Buildings, Says Indiana Governor

More bad news for architecture firms and construction companies hurt by canceled and postponed building projects. Gov. Mitch Daniels of Indiana has called for a two-year moratorium on university construction — a proposal that could affect $200-million in projects in the current state budget, according to The Courier-Journal. The governor also proposed stopping most other state construction projects, with the exception of two prisons.

“State Budget Director Chris Ruhl said growing payments on bonds issued for past university construction projects are eating up dollars that could be spent on other higher-education priorities,” the paper reported. “Indiana has $1.2-billion in outstanding, state-funded university debt — more than one-fourth of the state’s total debt load. That will require the state to spend $176-million this year on bond payments, a 35 percent increase from 2007.”

The Courier-Journal says that the moratorium would not stop projects already underway. It could, however, affect engineering and design work on a planned medical building at Indiana University Southeast.

Democrats in the state called the moratorium “short-sighted” and “anti-stimulus.”

The news from Indiana stands in contrast to news from Michigan, where the University of Michigan at Ann Arbor has $1.5-billion in construction underway and another $500-million in construction planned, effectively propping up the struggling local construction industry.

Scott Carlson | Friday January 9, 2009 | Permalink | Contact us

Comments

  1. Why in the world are colleges building more and more buildings in this age. And the idea of building multimillion dollar recreation centers is stupid. We are not in the entertainment or construction business. Why not put basic education first and foremost. America has to get out of the rut of living on the edge and that includes colleges and universities and especially their athletic programs.

    — russell james    Jan 9, 02:58 PM    #

  2. A recreation building is STILL in the works at SUNY Cortland. $50 mil. With all of the cuts in the SUNY system, it seems like someone needs to reset their priorities.

    — cortland    Jan 9, 03:18 PM    #

  3. Students need outlets for their stress. While I think there’s room for discussions about common ground vis-a-vis $50 million dollar rec centers vs less expensive options, exercise is a great stress-reducing activity. In addition, the more early positive habits students get into with regards to their wellness, the less the burden will be for all of us in the future.

    — Matthew    Jan 9, 03:41 PM    #

  4. Actually, for universities that still have some money, this is a good time to build. In most places, construction businesses are struggling, property prices are low, and if schools manage to grow now, the competition will have a hard time keeping up later. This is esp. the case at Michigan (where the U bought former Pfizer labs for cheap and is making the most of their budget), which makes makes the news from Indiana all the worse for Bloomington in the long term.

    — t-law    Jan 9, 05:37 PM    #

  5. Although not all construction projects are created equal, it seems like the more government agencies, universities and other large organizations simply stop capital projects and instead operate from a paradigm of fear, we will see an even greater amplification of confidence erosion for the economy.

    We need more progressive solutions and people to provide some leadership and courage in these times.

    — Eric    Jan 9, 07:12 PM    #

  6. How much are those overpaid NFL athletes that got there via a University kicking back a few of their bucks to help out alma mater instead of living quite so much high life?
    Yes it may be a good time to contract construction with the industry really hurting but no more damn and athletic complexes?

    — AW Emeritus    Jan 10, 10:58 AM    #

  7. Most campus recreation buildings are paid for by student fees, not by the government (state/federal) nor by tuition income.

    While I don’t disagree with AW’s suggestion about NFL athletes kicking back some money, the question begs – do you think they’ll really give money to ACADEMIC endeavors or to campus athletics…?

    This is a good time to build – both for the institution and local economies.

    — SMF    Jan 10, 11:20 AM    #

  8. Many state and smaller universities have to compete for students with all the other universities in a particular region. The amenities available to them on campuses effect their decision as to where they will want to go.

    I know some universities are plowing ahead with construction because they already have the money locked up in the construction contracts, some of which are partway through completion.

    — SW    Jan 10, 04:30 PM    #

  9. Does no one here detect a certain small irony in Indiana’s proceeding with prison construction while stopping construction for education?

    — Donald Mintz    Jan 11, 12:09 PM    #

  10. Building has two functions. The first, and easiest to understand is that we actually do something with the buildings that we have – work in them, play in them, live in them, etc. The second function of buildings is that they are part of the economy. It makes sense now for colleges and universities to be building now is to support the local economy. Yes, academic institutions are part of larger economic world. State institutions, in particular, are thinking no only about whether or not they can use the building, but also what the economic impact of the building project will be.

    Look at the big picture. The issues aren’t always as simple as they seem. From my perspective, with the economy in the toilet, it makes great sense to be building.

    — the old guy who likes coffee    Jan 12, 09:04 AM    #

  11. Too bad they can’t pull the money from the Athletic Department. Alas, that department is usually separate from the university’s regular budget, so while the buildings crumble and the professors can’t be paid, the football team goes forward with the latest in equipment, technology, and multimillion dollar salaries for coaches. Talk about loss of priorities!

    — R Sevart    Jan 12, 11:58 AM    #

  12. Might not Gov. Daniels distaste for building at universities be somehow related to the overwhelming support for the Democrats in recent elections on college campuses throughout Indiana? Look at support for Democrats in Monroe County for example, home of Indiana University, Bloomington where Daniels lost to Long Thompson in the race for governor while Obama won by a rather large margin (66% to 33%) in the presidential race.

    Also, if we’re talking about saving money in these difficult times, it’s worth keeping in mind that Daniels, in 2002, estimated that the Iraq War would cost between $50-60 billion. As of 2007, the war had already cost at the very least $400 billion. So, I’m not quite sure Daniels is always on the mark when he talks about budgets. Nice guy but I would take what he says with a grain of salt.

    Numbers cited for the war were taken from Wolk, Martin (2006-05-17). “Cost of Iraq war could surpass $1 trillion”. MSNBC.

    — John    Jan 12, 12:24 PM    #

  13. This is move is simply a cynical political ploy by the Gov. Goes who will be first in line with this project when it is time to line up for the “shovel ready project” Federal stimulus project hand outs? Why have the State pay when you can get it free from the Feds?

    — ct_woods    Jan 12, 03:52 PM    #

  14. I think many are missing the point. There aren’t many fitness centers in the works in the state of Indiana. The the vast majority of the planned building is going towards research, science, and technology buildings. To stop these is bad for the economy and the University. Governor Daniels’ decision is shortsighted at best.

    — rg    Jan 16, 12:12 PM    #